BP plc shareholders on Tuesday overwhelmingly approved a resolution to align the business strategy with the 2015 United Nations climate change accord, aka the Paris Agreement, but they rejected implementing a more harsh recommendation.
At the annual meeting held in Aberdeen, Scotland, 99% voted to accept a resolution drafted by Climate Action 100+, a group of about 300 investors with more than $33 trillion in assets under management. BP had supported the resolution, aka Resolution 22.
Shareholders also resoundingly rejected by almost 92% a resolution by Dutch-based Follow This that would have required BP to reduce customer emissions.
BP’s Dominic Emery, vice president of group strategic planning, said “shareholders have shown their support for the approach we are taking to advance the energy transition and help address the climate challenge. We are pleased that investors have overwhelmingly approved the Climate Action 100+ resolution we supported while also rejecting one from Follow This that would have restricted our flexibility to manage the uncertainties of the energy transition.
“To be successful in this critical area, we must continue our engagement with shareholders and other stakeholders and we are committed to doing so.”
Resolution 22, said Emery, “was described as ”a blueprint for others to follow’ by Bruce Duguid, head of stewardship for Hermes Investment Management, writing on behalf of Climate Action 100+ in The Telegraph.
The success of Resolution 22 “will continue the momentum of a new era of collaboration between investors and companies, working together to find long-term solutions to one of the most challenging and urgent problems for mankind.”
The investor initiative, presented to all oil and gas majors, wants the world’s “largest corporate greenhouse gas emitters” to take “necessary action on climate change.” The companies include 100 “systemically important emitters,” that Climate Action 100+ said account for two-thirds of annual global industrial emissions and more than 60 others that could drive the “clean energy” transition.
Investor representatives from AustralianSuper, California Public Employees’ Retirement System, HSBC Global Asset Management, Ircantec and Manulife Asset Management have helped to lead the design and development of Climate Action 100+.
Chairman Helge Lund, who took over in January, said BP could not set emissions targets for things not under its control. Group CEO Bob Dudley also has opposed setting reduction targets for emissions beyond BP’s control.
Lund told investors on Tuesday “the energy transition must happen and is already underway. People around the world need more energy to improve their lives, but carbon emissions have to come down at a much faster pace than we are seeing now.
“BP is a big company which carries great responsibility. We can play an important role. We want BP to advance the energy transition while remaining a good investment case.”
Dudley also shared compensation bonus plans, which will be linked to emissions reduction targets for around 36,000 employees to guarantee they are met.
BP, he said, has reduced its greenhouse gas emissions by about 2.5 million metric tons a year (mmty) since the beginning of 2016, which should allow the company to hit a target of 3.5 mmty by 2025.
Shareholders supported all other 21 resolutions at the meeting, including the election and re-election of BP’s board members.
Protestors attempted to shout down Dudley as he began to speak, but they were escorted from the meeting. Members of Greenpeace also had briefly blockaded London headquarters on Monday.
BP said it welcomed “discussion, debate, even peaceful protest on the important matter of how we must all work together to address the climate challenge, but impeding safe entry and exit from an office building in this way is dangerous and clearly a matter for the police to resolve as swiftly as possible.”
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