BP: Helping an Oil Major

Helping an Oil Major hit its long-term climate goals

Environmental engagement case study by EOS - BP

Picked for the Alliance Trust portfolio by Jupiter Asset Management as at 30 September 2022.

Area of engagement

EOS has engaged with oil major BP on climate change for more than a decade as part of Climate Action 100+, a collaborative engagement of more than 370 investors and their representatives. But in 2018 the EOS team intensified its engagement due to concerns about whether the company’s growth strategy was consistent with the Paris Agreement goals, as the company had not disclosed a plan to reduce the so-called ‘Scope 3’ emissions associated with its products.

Outcome

The EOS team led the drafting of a shareholder resolution, calling on the company to set out a strategy consistent with the Paris goals. The resolution gained management support and was co-filed by nearly 10% of the shareholder base.

In early 2020, the newly-appointed CEO, Bernard Looney, announced a new ambition for the company to transition to net-zero by 2050 or sooner, supported by ten underpinning corporate aims and covering Scope 1, 2 and 3 emissions. The company has since laid out a detailed strategy by which it intends to transition from high-carbon to low-carbon energy production.

EOS further intervened at the 2020 shareholder meeting, asking the company to reconsider its long-term oil-and-gas price assumptions in light of the coronavirus pandemic. During Q2 2021 results, BP reduced the long-term oil-and-gas price assumptions in its financial statements, giving shareholders greater visibility about the firm’s climate-related risks.