Page 15 - EurOil Week 13 2021

EurOil POLICY EurOil

BP urges shareholders to reject

climate resolution

UK BP is urging its shareholders to vote down a res- bridgeable and BP can ask shareholders at the
olution by activist investor Follow This that aims AGM on May 12 for a mandate to advance their
BP had initially sought to bridge the gap between the UK major’s climate current ambitions into Paris-consistent targets
to draft the resolution targets and the goals of the Paris Agreement. The as specified in the resolution,” Follow This said
jointly with Follow This. oil company says the ambitions it announced recently.
last year are enough to meet the climate accord’s BP’s board has responded by urging share-
aims, and argues that to alter them further would holders to vote against the proposal, which it
be counterproductive. argues “would have a negative impact on BP’s
BP had initially sought to draft the resolution ability to deliver its Paris-consistent strategy and
jointly with Follow This, but this co-operation value for shareholders.”
broke down after the pair failed to agree on its BP has drawn up its targets through a process
wording. Speaking to Bloomberg in December, of extensive consultation with investors,” the
BP explained that the two sides “were unable to board said, noting that the goals are inextricably
agree the wording of a potential joint resolution linked with its broader strategy.
to enable shareholders to show their support for “So, although the resolution suggests other-
BP’s net-zero.” wise, asking us to change our targets and aims
BP has gone further than many European now would necessitate a change in strategy,” the
oil companies in addressing climate change, board said. “Going back to the drawing board
announcing a radically different strategy last year on strategy, targets and aims would disrupt our
which calls for a 40% reduction in its oil and gas business plans and set us back at the very time
output over the next ten years as well as a 20-fold when shareholders are asking us to focus on
increase in the size of its renewables business. execution.”
The major has also promised to lower its Scope 1 What is more, implementing the resolution
and Scope 2 emissions to net zero by 2050. “would also compromise BP’s resilience by con-
Follow This argues that BP needs to do more, straining the board’s ability to adjust the strategy
however. The investor notes that even under to changing circumstances.”
its new strategy, the UK major still expects its BP and its counterparts are under height-
emissions to grow over the next decade, when ened pressure from shareholders, governments
reductions of 25-45% would be required to be and financiers to cut their emissions and make
consistent with the aims of the Paris Agreement. the energy they produce cleaner. Many industry
What is more, when BP’s Scope 3 emissions players, particularly in Europe, have announced
are considered, its overall emissions will only net-zero emission ambitions, but many hope to
halve by 2050. Scope 3 emissions are released use technologies like carbon, capture and stor-
when customers use a company’s products. age (CCS) and hydrogen energy that have not yet
“We still think these discrepancies are been matured to get there. ™

Week 13 01•April•2021 www. NEWSBASE .com P15