BP announced that it will support a call from a group of institutional investors for the company to broaden its corporate reporting to describe how its strategy is consistent with the goals of the Paris Agreement.
Investor participants of the Climate Action 100+ initiative have proposed a resolution to be put to shareholders at the company’s annual general meeting in May 2019. Following constructive engagement between BP and the investors, the BP Board has decided to support the proposed resolution.
BP has supported the aim of the Paris Agreement, with its call to rapidly reduce greenhouse gas emissions in the context of sustainable development and eradicating poverty, since it was agreed in 2015.
In accordance with the proposed resolution, BP will describe how its strategy is consistent with the Paris goals, as well as setting out a range of additional related reporting. The process to formally submit the resolution is being finalized and BP intends to provide shareholders with a more detailed explanation of its support for the resolution in the notice of meeting ahead of the AGM.
“BP is committed to helping solve the dual challenge of providing more energy with fewer emissions,” Helge Lund, BP’s Chairman, said. “We are determined to advance the energy transition while also growing shareholder value. We believe our strategy is consistent with the Paris goals. The additional reporting specified in the resolution will build on BP’s history of progressive action in this area. We welcome the constructive engagement with Climate Action 100+ and, after careful consideration, have decided to support this resolution.”
Advancing BP’s approach
BP’s approach to the energy transition is grounded in the experience it has gained since it first called for action on the threat of climate change over 20 years ago. In 2017 it set out a strategy designed to grow shareholder value under a range of scenarios while also helping to meet the dual challenge of providing more energy with fewer emissions. Last year, BP introduced the reduce-improve-create framework, through which it intends to deliver its low carbon ambitions, including clear near-term targets for emissions from operations.
“This additional reporting will give investors better clarity about how BP can continue to deliver value through the energy transition in a way consistent with the Paris goals,” Mr Lund added. “We will be open and transparent about our ambitions and targets as well as our progress against them. We recognize that the trust of our shareholders, and society more widely, is essential to BP remaining an attractive and reliable long-term investment. And only by remaining a world-class investment can we most effectively play our part in advancing a low carbon future.”
If the resolution is approved at the AGM, BP will introduce these changes into its reporting for 2019 onwards. BP and institutional investors supporting Climate Action 100+ will continue their dialogue and revisit the resolution every three to five years, to allow the company and its shareholders to take account of the experience gained and changes in circumstances.
Emissions reductions included in employee reward worldwide
Separately, BP also announced that greenhouse gas (GHG) emissions reductions have now been included as a factor in the reward of 36,000 employees across the group and around the world, including executive directors.
In 2018, BP introduced a target to achieve 3.5 million tonnes of sustainable GHG emissions reductions in its operations worldwide by 2025. Progress towards this target has now been incorporated into the assessment of the group’s performance that is a factor in determining annual bonuses for BP staff worldwide. This will apply to the assessment of BP’s performance in 2019.
“Meeting the world’s growing demands for energy while also greatly reducing emissions will require more than rapidly growing renewables – all forms of energy must be made cleaner, better and kinder to the planet. This is why our people are already in action across BP, seeking opportunities to reduce our emissions, improve our products and create new low carbon businesses,” Bob Dudley, BP Group Chief Executive, said.
“Building an emissions reduction target into the reward of people throughout BP further underlines the importance we place on this work. We expect it will catalyze even more ideas and activity and support BP playing our part in addressing the dual challenge,” Mr Dudley concluded.