hareAction says that BP has fallen well short of the environmental commitments it made at last year’s meeting
ShareAction said BP’s chief executive Bob Dudley was paid almost $20m last year based on incentives that continue to encourage fossil fuel exploration. Photograph: Savostyanov Sergei/Corbis
Sean Farrell
Sunday 10 April 2016 16.13 BSTLast modified on Monday 11 April 201600.40 BST
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Campaigners claim BP has failed to do enough on environmental pledges made at last year’s annual general meeting (AGM) and will hold bosses to account at the oil company’s shareholder gathering.
At last year’s AGM, BP worked with groups under the “Aiming for A” banner on a resolution committing it to greater openness about its impact on climate change. The resolution, supported by the board, received 98% shareholder approval and the company’s new environmental awareness won wide praise.
BP promised to reveal more about: the impact of carbon emission limits on the value of its oil and gas reserves; its investments in low-carbon technology; carbon dioxide emissions from its operations; linking executive pay to greenhouse gas reduction; and its lobbying on climate change.
But ShareAction, the responsible investment group, says in the year since the resolution was passed BP has fallen well short of the commitments it made. In particular the company has failed to make the shift needed to align itself with atarget set in Paris in December to limit global temperature increases to 2C with an aspiration of 1.5C.
In a report to be published on Monday, ShareAction says:
BP continues to question the likelihood of a 2C scenario coming into effect, and its “base case” for fossil fuel demand assumes with an increase of 4-to-6C
Management’s targets and pay incentives continue to encourage the replenishing of fossil fuel reserves
The company has not published a strategy for wind-down or business diversification to suit an economy with less than 2C warming.
In many cases, the company fails to address requests made by investors in the supporting statement circulated with last year’s resolutions.
ShareAction said BP’s chief executive Bob Dudley was paid almost $20m (£14m) last year based on incentives that continue to encourage fossil fuel exploration. The campaigning group, which will challenge the board at the annual meeting on 14 April, called on investors who supported last year’s resolution to push BP for stronger action.
The company is also braced for a row over pay. A number of advisory groups have advised voting against the pay report, including Pirc, which said Dudley’s pay – which rose 20% despite job cuts and record losses, was excessive because he was paid more than five times his $1.85m salary in share awards.
The Aiming for A coalition, which includes church investors and pension funds, is putting forward a similar resolution on climate risk to the AGM of Rio Tinto, the mining company, which takes place on the same day as BP’s meeting – Thursday.
ShareAction said it would press Rio Tinto on how it would implement pledges in the resolution, in light of what it argues is disappointing progress by BP.
Catherine Howarth, ShareAction’s chief executive, said: “Rio Tinto’s recommendation to vote for this shareholder resolution on climate risk is welcome. However, as our analysis of BP shows, it’s one thing for a company to publicly support a vote in favour and quite another for it to respond with meaningful follow-up action.
“Engaged shareholders will expect Rio Tinto to provide a clear and detailed plan for how it will respond to the spirit and intention of this resolution, assuming it passes at the AGM.”
Helen Wildsmith, head of stewardship at the fund manager CCLA, which is part of the Aiming for A coalition, said BP had made progress on carbon pricing, preparing for a faster transition to renewable energy and reporting its resilience to climate change. She said Aiming for A would ask questions about BP’s next steps.
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A Rio Tinto spokesman said: “The management team will review our existing disclosures, commitments and carbon-related activities and assess what additional reporting on risks associated to climate change may be required as well as the format for such additional reporting.”
Rio Tinto will also face protests from the London Mining Network over the company’s environmental record, treatment of workers and effects on local populations at its sites.
A BP spokesperson said the “base case” is what the company believed was most likely, not what it would like to see and that it had businesses in wind and biofuels.
“We also believe a faster transition, with higher carbon prices and stricter policy and regulation, is possible in which CO2 emissions could peak around 2020 and be around 8% lower by 2035 than they are today.
“Even in this faster transition oil and gas would still continue to provide the lion’s share of global energy to 2035, but renewables would grow very rapidly. BP’s own portfolio of businesses is balanced and diversified, with around half oil and half gas and the proportion of gas growing.””
ShareAction said BP’s chief executive Bob Dudley was paid almost $20m last year based on incentives that continue to encourage fossil fuel exploration. Photograph: Savostyanov Sergei/CorbisSean Farrell
Sunday 10 April 2016 16.13 BSTLast modified on Monday 11 April 201600.40 BST
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Comments15
Save for later
Campaigners claim BP has failed to do enough on environmental pledges made at last year’s annual general meeting (AGM) and will hold bosses to account at the oil company’s shareholder gathering.
At last year’s AGM, BP worked with groups under the “Aiming for A” banner on a resolution committing it to greater openness about its impact on climate change. The resolution, supported by the board, received 98% shareholder approval and the company’s new environmental awareness won wide praise.
BP promised to reveal more about: the impact of carbon emission limits on the value of its oil and gas reserves; its investments in low-carbon technology; carbon dioxide emissions from its operations; linking executive pay to greenhouse gas reduction; and its lobbying on climate change.
But ShareAction, the responsible investment group, says in the year since the resolution was passed BP has fallen well short of the commitments it made. In particular the company has failed to make the shift needed to align itself with atarget set in Paris in December to limit global temperature increases to 2C with an aspiration of 1.5C.
In a report to be published on Monday, ShareAction says:
BP continues to question the likelihood of a 2C scenario coming into effect, and its “base case” for fossil fuel demand assumes with an increase of 4-to-6C
Management’s targets and pay incentives continue to encourage the replenishing of fossil fuel reserves
The company has not published a strategy for wind-down or business diversification to suit an economy with less than 2C warming.
In many cases, the company fails to address requests made by investors in the supporting statement circulated with last year’s resolutions.
ShareAction said BP’s chief executive Bob Dudley was paid almost $20m (£14m) last year based on incentives that continue to encourage fossil fuel exploration. The campaigning group, which will challenge the board at the annual meeting on 14 April, called on investors who supported last year’s resolution to push BP for stronger action.
The company is also braced for a row over pay. A number of advisory groups have advised voting against the pay report, including Pirc, which said Dudley’s pay – which rose 20% despite job cuts and record losses, was excessive because he was paid more than five times his $1.85m salary in share awards.
The Aiming for A coalition, which includes church investors and pension funds, is putting forward a similar resolution on climate risk to the AGM of Rio Tinto, the mining company, which takes place on the same day as BP’s meeting – Thursday.
ShareAction said it would press Rio Tinto on how it would implement pledges in the resolution, in light of what it argues is disappointing progress by BP.
Catherine Howarth, ShareAction’s chief executive, said: “Rio Tinto’s recommendation to vote for this shareholder resolution on climate risk is welcome. However, as our analysis of BP shows, it’s one thing for a company to publicly support a vote in favour and quite another for it to respond with meaningful follow-up action.
“Engaged shareholders will expect Rio Tinto to provide a clear and detailed plan for how it will respond to the spirit and intention of this resolution, assuming it passes at the AGM.”
Helen Wildsmith, head of stewardship at the fund manager CCLA, which is part of the Aiming for A coalition, said BP had made progress on carbon pricing, preparing for a faster transition to renewable energy and reporting its resilience to climate change. She said Aiming for A would ask questions about BP’s next steps.
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A Rio Tinto spokesman said: “The management team will review our existing disclosures, commitments and carbon-related activities and assess what additional reporting on risks associated to climate change may be required as well as the format for such additional reporting.”
Rio Tinto will also face protests from the London Mining Network over the company’s environmental record, treatment of workers and effects on local populations at its sites.
A BP spokesperson said the “base case” is what the company believed was most likely, not what it would like to see and that it had businesses in wind and biofuels.
“We also believe a faster transition, with higher carbon prices and stricter policy and regulation, is possible in which CO2 emissions could peak around 2020 and be around 8% lower by 2035 than they are today.
“Even in this faster transition oil and gas would still continue to provide the lion’s share of global energy to 2035, but renewables would grow very rapidly. BP’s own portfolio of businesses is balanced and diversified, with around half oil and half gas and the proportion of gas growing.””
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