Next week, on April 27th at BP, the crucial 2023 AGM season at Big Oil kicks off.
Five climate resolutions, co-filed by institutional investors, will be put to a vote at the AGMs of Shell, BP, TotalEnergies, ExxonMobil, and Chevron.
Before you cast your votes for the BP AGM, please consider the following:
- BP “anticipates” its absolute Scope 3 emissions of marketed products to increase by 2030 with its current strategy #
- It is unclear whether or not BP’s absolute total Scope 3 emissions (marketed and traded) will increase by 2030
- BP justifies not advancing its strategy by claiming the support of shareholders who vote against the Follow This climate resolutions.*
- The Follow This Climate resolution (Resolution 25) supports BP to align its 2030 Scope 3 emissions reduction aims with the goal of the Paris Climate Agreement
A vote in favour of shareholder resolution 25 is the only way to urge BP to reduce overall emissions this decade; voting against will enable the company to persist in delaying emission reductions by 2030 and endanger the overall value of your portfolio.
Consult this fact sheet for all you need to know about Bp’s aims covering scope 3
# “We anticipate that the absolute level of emissions associated with our marketed products will grow up to 2030, even as the carbon intensity covered by aim 3 falls.” – BP sustainability Report 2020, page -page 31
* “We are grateful to shareholders for their support in voting with the board’s recommendation and rejecting [Follow This] resolutions in previous years. […] Your support has further increased the confidence we have that the strategy bp set out in 2020 is working.” – bp-agm-notice-of-meeting-2023, page 1
INVESTOR BRIEFING
With 2030 closing in, the final year of the crucial decade in which emissions must nearly be halved, the fact remains that so far, no oil and gas company has set targets to reduce emissions in line with Paris. Shareholders, through the power of the vote, can compel Big Oil to finally set course for Paris alignment.
AGM season kicks off at BP
BP’s annual general meeting (AGM) on the 27th of April is the first of five AGMs in 2023 where Follow This and institutional investors have filed a resolution requesting medium-term Scope 3 emission reduction targets. It will be a contentious meeting, as BP, rolled back emission reduction targets earlier this year in the wake of record profits and high shareholder support for progress made against previous climate commitments.
In this brief we lay out why we believe it is in the best interest of the company and its investors to use your shareholder voting power next week to give BP a clear signal there is no time to further delay emission reductions this decade.
BP has not set targets in line with Paris
In our resolution (resolution 25), we explain that the aims the company had set in 2020 would not lead to large-scale (net) reductions in absolute emissions by 2030 because:
- BP’s total absolute Scope 3 emissions (including emissions from third party sales) are three times higher than what is covered under its absolute emission reduction aim (Aim 2)
- BP’s (intensity) aim 3 covering its total emissions does not necessarily lead to absolute emission reductions
BP’s sustainability Report 2020 confirms this by stating: “We anticipate that the absolute level of emissions associated with our marketed products will grow up to 2030, even as the carbon intensity covered by aim 3 falls.”
ACCR: Voting for the Follow This climate resolution on scope 3 and 2030 targets is an efficient way for investors to give voice t
A briefing from the Australasian Centre for Corporate Responsibility (ACCR) provides investors with clarity among BP’s plethora of aims that are distracting from BP’s strategy of not driving down emissions by 2030. Important conclusions:
- BP has not yet established absolute targets for third-party oil and gas emissions, which BP has indicated may grow until 2030
- BP’s cumulative emissions between FY19-21 constituted 4% of global emissions
Read the resolution and supporting statement
Before casting your votes for the BP AGM, please also considers the following facts:
- BP justifies not advancing its strategy by claiming the support of shareholders who vote against the Follow This climate resolutions.
- The Follow This Climate resolution supports BP to align its existing 2030 Scope 3 emissions reduction aims with the goal of the Paris Climate Agreement.
Consult this fact sheet for all you need to know about Bp’s aims covering scope 3
BP rolls back climate targets is a governance risk
Investors are rightfully concerned about BP rolling back its climate aims. The company changed its ‘Aim 2’ to reduce the Scope 3 (product) emissions from its own oil and gas production to 20-30% by 2030 (from 35-40%). Holding an advisory vote to rubber stamp climate plans and subsequently backtracking from those plans sets a dangerous corporate governance precedent.
But investors should worry more about what this action represents. According to the CA100+ assessment, BP rolled back climate aims which were already not in line with Paris. The company did so amid an ever-worsening global climate crisis, thereby putting the long-term value of diversified investor’s portfolios at an even greater risk.
Some investors have expressed they consider BP ahead of its peers and would therefore prefer to focus on engagement. However, being the best in a class where no one passes the bar is insufficient when emissions must be reduced this decade.
Proxy advisors ignore climate risk and advise against Paris
Last Friday, proxy advisors ISS and Glass Lewis recommended shareholders to vote against the Follow This resolution at BP (Reuters). The resolution would present “a change in strategy” and “fail to acknowledge the significant uncertainty and complexity in managing and measuring Scope 3 emissions” the two advisors told investors respectively. Over the years, more and more investors have disregarded proxy advice, with 30% and 20% voting in favor of the resolution at Shell in 2021 and 2022 respectively.
Responsible investors lead by pre-declaring votes
Responsible investors, such as Britain’s Local Authority Pension Fund Forum (LAPFF, members hold assets worth more than 350 billion pounds ($431.13 billion) and PMT have already indicated they will support the resolution. We thank these investors for taking the lead on climate action by pre-declaring votes at key climate resolutions.
Voting this season – starting with bp
It is not too late to send companies a clear signal that all companies need to drive down emissions this decade. Clear investor support for the climate resolution at the BP 2023 AGM will create clarity on which investors prioritize Paris alignment, challenge the management’s backtrack, and will provide the company with a clear mandate to align its climate aims accordingly.
A vote in favour of shareholder resolution 25 is the only way to urge BP to reduce overall emissions this decade; voting against will enable the company to persist in delaying emission reductions by 2030 and endanger the overall value of your portfolio.
