BP agrees to more climate reporting after 'constructive' investor talks

Gladys Abbott
February 3, 2019

BP has pledged to align its business more closely with global climate goals and link the bonuses of 36,000 employees to greenhouse gas reduction targets.

But BP urged investors to reject a tougher climate resolution brought by a Dutch shareholder activist group, which it said was too prescriptive.

BP's linkage of its goals with compensation is important, but details about that compensation also remain to be disclosed.

The oil and gas company that is based in the United Kingdom supported a resolution that was put forward by a group of shareholders including the investment arms of Legal & General, the C of E, and HSBC. "The decision by the BP board to support the resolution shows that this is a priority for the company and builds on progress to date, such as setting best in class methane intensity targets".

The company has also been told to justify how capital expenditure in fossil fuel projects was consistent with the landmark climate deal, and set new metrics and targets.

According to a Financial Times report, BP likely did not accept the Follow This resolution as it had previously said that third-party emissions are out of the control of energy companies.

BP's chief executive officer (CEO), Helge Lund, said that the disclosure would help the oil company meets its goals producing energy and stemming the increase in the global temperature.

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A group of major European investors has secured the backing of BP for a shareholder resolution calling on the oil and gas major to do more to explain how its strategy is consistent with internationally-agreed climate change goals.

To align with Paris, BP would have to diversify into clean energy production, shrink current investments in oil and gas development, or otherwise reduce its full range greenhouse gas emissions.

Shell, for example, said previous year that it would start linking executive pay to short-term carbon emissions targets in 2020 after coming under pressure from shareholders including the Church of England.

BP will advise shareholders to back the resolution at an AGM in May. These emissions are much bigger than those from the company's operations.

Will the BP pledge reduce greenhouse gases?

The move from BP builds on the firm's Advancing the Energy Transition (AET) strategy, which has a headline aim of generating reductions of 3.5m tonnes of Carbon dioxide equivalent annually throughout the businesses by 2025.

"The goal of the Paris Climate Agreement is to limit global warming to well below 2°C above pre-industrial levels, to aim for a global net-zero-emission energy system", Follow This added.

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