LETTER TO INVESTORS IN BP
Response to BP’s climate strategy reversal without seeking shareholder approval
We write shareholders in BP to advise a vote against the chair. This stems from the board’s decision to step back from previous climate commitments without holding a formal vote, a move that has triggered significant governance questions.
Shareholders denied a vote
In 2022, BP held a vote on its energy transition plan *, which passed with a majority. In 2023, 17% of shareholders backed a resolution from Follow This supporting stronger targets aligned with the Paris Accord. On February 26, BP abandoned key climate pledges and boosted investment in fossil fuels. On March 6, BP published the notice of meeting of its AGM on April 17 without allowing a vote on the new strategy.
Shareholder concerns
Some investors emphasize that bypassing a shareholder vote undermines confidence in the board. Others highlight potential financial risks if oil and gas demand declines after 2029, as forecast by the International Energy Agency. BP’s own outlook anticipates a possible peak in oil demand by this year. Expanded investment in fossil fuels could expose the company to stranded assets and climate-related liabilities.
Reasons for a vote against the chair
- Provide a clear signal that major strategic changes requires shareholder approval.
- Restore confidence in the company’s commitment to robust governance.
- Safeguard the long-term interests of all investors.
A Vote Against the Chair as a Clear Signal
BP’s decision to sidestep shareholder approval has frustrated both climate-conscious investors and those who prioritize corporate governance.
A significant vote against Helge Lund’s re-election will send a clear message: BP’s leadership must listen to all shareholders, not just one, alleged short-term activist investor. Activist investor Elliott took a small stake in BP and allegedly pressures the company to focus on oil and gas.
This vote is an opportunity to push back against the rising anti-climate sentiment in both politics and investment circles.
We don’t want the chair to resign. We want him to heed the message that he has crossed a governance line and retrace his steps by offering shareholders a vote.
BP’s Leadership Risks the Company’s Future
Follow This warns that BP’s decision to increase fossil fuel investments puts the company at financial risk. The International Energy Agency (IEA) forecasts a decline in oil and gas demand after 2029. BP’s own Energy Outlook 2024 predicts peak oil demand as early as 2025 (left graph on page 30).
The board is ignoring these warnings for a decline in fossil fuel demand, investing in what could become stranded assets, and even betting against its own analysts’ forecasts. Even shareholders who don’t prioritize climate risk should be concerned about BP’s financial stability.
BP could face a sharp drop in share value as markets adjust to the realities of disruptive innovation, stranded assets, and climate-related liabilities. Sooner or later, oil companies will be held accountable for climate damage costs.
History of engagement
- 2020: Follow This withdrew its climate resolution after BP pledged to introduce emissions reduction targets.
- 2021–2023: Shareholder support for proposals urging Paris-aligned targets reached up to 20% at BP.
- 2024–2025: No resolution was filed due to a lack of investor appetite before BP’s U-turn. BP was seen as a leader in the energy transition, but in reality, BP never made a serious effort to transition.
Looking ahead
Follow This encourages investors to consider the possible ramifications of steering BP away from climate targets. Energy market shifts and impending regulation could affect share value more quickly than anticipated. Shareholder signals can push for a balanced investment strategy that accounts for both near-term returns and evolving energy demands.
Kind regards,
Tarek Bouhouch and McKenzie Ursch, Follow This
* BP’s 2022 notice of meeting about resolution 3: “The intent of this resolution is to provide you, as the company’s shareholders, with an opportunity to express your view on the destination we have set and the path we are charting towards it. We ask for your support.”
“We intend […] to offer a further shareholder vote if we believe it is in the company’s interests to do so – potentially in 2025.”
