PRESS RELEASE – Lacking absolute emissions reduction by 2030, BP’s decarbonisation plan is not Paris-aligned.
BP’s transition strategy will not deliver emissions reduction by 2030 and therefore falls short of Paris-alignment, concludes in-depth research by Global Climate Insights (GCI) published today (page 36).
“We are seeing a trend in the [fossil fuel] sector where ‘net zero’ strategies are completely detached from real business strategies and outcomes,” GCI Lead Analyst Shu Ling Liauw said.
“This report highlights the need for investors to vote in favour of the Follow This climate resolution on the ballot at BP’s AGM on May 12,” responds Mark van Baal, founder of Follow This.
BP not Paris-aligned, despite cuts in production by 2030 and net zero by 2050
The findings of GCI which show no emission reductions for 2030 contradict with the IEA and the IPCC, which call for deep emission reductions this decade to achieve the goal of the Paris Climate Agreement. According to IPCC, global absolute emissions need to go down by 45% by 2030 (compared to 2010). According to the IEA Net Zero Emissions by 2050 Scenario, to stay within a 1.5°C pathway’ absolute emissions of oil and gas companies should be reduced by 36% by 2030 (compared to 2019).
“BP still doesn’t plan to decrease emissions until 2030, even though they are claiming to be aligned with Paris,” responds Mark van Baal.
BP’s production cuts undone by increased trade
GCI shows that the emissions reduction achieved by divestment of BP’s own production assets (40% excl. Rosneft) will be undone by an increase in third-party fossil fuel sales. Moreover, since the divested assets will continue to produce fossil fuels, BP’s strategy will result in an increase of GHG emissions of 6% by 2030 (compared to 2019).
BP also expects emissions to grow
GCI’s conclusion is consistent with BP’s own statement “We do expect the absolute level of emissions associated with our marketed products to grow out to 2030, even as the carbon intensity covered by Aim 3 falls.” (Reimagining Energy, September 2020, page 11).
Global Climate Insights (GCI)
This in-depth research project by the Australian research institute Global Climate Insights (GCI) follows a report about Shell’s decarbonisation strategy that showed that Shell’s emissions would increase by 4% by 2030.
Follow This climate resolution
At BP’s AGM on May 12, a climate resolution that requests Paris-aligned emissions reduction targets will come to a vote for the third time (resolution 24). The resolution was filed by Follow This, a group of green shareholders in Big Oil.
BP advises shareholders to vote against the resolution “because it is unclear, generic, disruptive and would create confusion as to board and shareholder accountabilities” in the notice of meeting.
In 2021, the shareholder resolution received 21% of the votes (up from 8% in 2019).
BP hides behind closed doors engagement meetings to claim investors’ support
In response to the 21% of votes in 2021, required by the UK corporate governance code, BP has “heard clear support for [its] strategy” during “extensive engagement with investors after the vote”.
“It is in the best interest of investors and BP, that BP becomes part of the solution in the fight against the climate crisis. The future of investors’ entire portfolio is at risk because of catastrophic climate change.”
Oil and gas remains core strategy
“BP is relying on divestment of production assets, a strategy that will not lead to a global reduction in emissions. If BP was using the proceeds of divestments to fund their transition activities, one could argue that this would help the global energy transition. However, this is not the case. It is currently being used to pay off debt and to fund share buybacks.”
“While investments in renewables should be increased to drive the energy transition, BP’s prominent driver of energy remains oil and gas,” says Mark van Baal. GCI forecasts show that BP’s annual energy fuel by oil and gas will entail 92% and just 2% in renewables by 2030 (page 26).
“BP remains addicted to turning hydrocarbons into petrodollars, they seem blind to the opportunities in renewables.”
“Absolute emission reductions within this decade are crucial to have any chance to achieve the Paris Accord.”
“More and more investors recognise that reaching the goal of the Paris Climate Agreement is essential to protect all of their assets in the global economy from devastating climate change.”
“Big Oil can no longer dismiss the crucial role it has to play in the fight against climate change.”
For more information, read the report written by Shu Ling Liauw, Lead Analyst, Rohan Bowater, Analyst, Marina Lou, Climate Communications, Dimitri Lafleur, Carbon Analyst, or contact [email protected].