|What are the relevant targets and milestones associated with the company’s climate/sustainability strategy? What progress has the company made on related reporting? What reporting framework or standard (i.e., TCFD – Task Force on Climate-related Financial Disclosures, SASB – Sustainability Accounting Standards Board, etc.) has the company adopted and if none, what commitments has the company made to enhance reporting in the future?|
…We attended BP’s AGM in Aberdeen on 21 May 2019. Following an introduction by the Chairman Helge Lund, the meeting was interrupted by several protestors demanding more action on climate change. Climate concern was a key theme of the day. Two climate-related resolutions were presented, one of which was filed by the Climate Action 100+ initiative.
It asked BP for better disclosure on its Paris-aligned strategy. We are members of the Climate Action 100+ initiative and were supportive of this resolution, as was the BP board. It passed with over 99% of shareholder support. The second climate-related resolution was filed by Follow. This is a group of shareholders focused on influencing oil & gas companies to commit to the goals of the Paris agreement. They asked BP to set targets around the carbon emissions related to its products (Scope 3 emissions). BP’s response was that it could not be held responsible for Scope 3 emissions, as these are not within its direct control.
…As part of a coordinated Climate Action 100+ effort, eight investors each asked BP a question.
We asked the company about the solutions it was investing in to transform to a low-carbon business. We were keen to understand the role of different technologies and fuels in BP’s Paris-aligned business model such as hydrogen and biofuels and how much investment is flowing into these solutions. Other questions focused on BP’s Scope 3 emissions approach, its capital expenditure and lobbying activities. The overarching aim was to understand how BP can demonstrate that its spending and strategy are consistent with the Paris agreement – which it claims they are.
A number of challenging questions came from other AGM attendees, including:
• a former employee who left BP after 10 years, feeling demotivated by the company’s response to climate change and the lack of opportunities for staff to re-train
• a related question asking whether BP would commit to providing a ‘just’ transition policy to demonstrate how it considers the social impacts of the energy transition
• statements by members of an Alaskan community, seeking BP’s commitment to considering the impacts of Arctic drilling on their community and livelihoods.
Several important issues were flagged at the AGM, but most questions were answered with fairly generic responses. In our role as active stewards, we will continue to work with BP through our direct engagement activities to explore these issues in more detail. A deeper understanding of what ‘Paris alignment’ means for a major energy company like BP will be critical.
- Shareholder Proposal
- Special resolution: Follow this shareholder resolution on climate change targets
- To give BP the opportunity to define meaningful targets that will be appropriate for its Paris-aligned business model
In our view, this is something that is possible and will be necessary to limit global warming to well below 2°C. Shell is leading by example on this front. Following conversations with BP, we voted against this resolution in order to give BP the opportunity to define meaningful targets that will be appropriate for its Paris-aligned business model. We expect more transparency from BP on this going forward.