Investors Urge BP to Allow Vote on Climate Strategy Changes
Major shareholders demand transparency as BP prepares to reassess its renewable energy commitments.
Nearly 50 major investors in BP have issued a formal request for a vote on any potential plans the oil giant may have regarding the modification or elimination of its climate goals.
This move comes ahead of a strategy meeting scheduled for next week, during which BP is expected to reconsider its commitments to renewable energy initiatives, which have reportedly underperformed financially in recent years.
The company, under the leadership of Chair Helge Lund, is anticipated to shift its focus back towards oil and gas production as part of an effort to enhance its share price and profitability.
BP reported a profit of approximately £7.2 billion last year, which was a decline of one-third compared to the previous year, primarily attributed to a decrease in oil and gas prices following their peaks related to the geopolitical tensions stemming from Russia’s invasion of Ukraine.
The letter sent by the group of investors, which comprises entities such as Scottish Widows, Hargreaves Lansdown Fund Managers, and Royal London Asset Management, emphasizes their expectation for ongoing accountability in light of BP's previous commitments.
They have highlighted their concerns over the company's investment strategy and the continuing trend of rising emissions from oil and gas operations, despite industry pledges for sustainability.
A representative from Royal London Asset Management stated the importance of clarity from BP regarding future capital allocations, particularly if the company intends to abandon its production targets.
The investor coalition consists of 48 investment and pension firms, including Rathbones Investment Management, the Local Authority Pension Fund Forum, and the University Pension Plan.
The concerns raised by this group of investors may place them on a collision course with US hedge fund Elliott Management, which has recently acquired around a 5% stake in BP. Elliott Management is known for its aggressive investment strategies, often pushing for significant changes in management and company direction, and it is expected to call for the termination of BP's climate goals, such as its target for net-zero carbon emissions by 2050.
Just three years prior, BP had reported record annual profits amounting to £23 billion.
However, there is growing dissatisfaction among investors regarding BP's recent financial outcomes, as its share price has slumped and profits have decreased relative to competitors like Shell.
BP acknowledged receipt of the letter from the investors, committing to a response in the near future.
Elliott Management has been contacted for comment.
This move comes ahead of a strategy meeting scheduled for next week, during which BP is expected to reconsider its commitments to renewable energy initiatives, which have reportedly underperformed financially in recent years.
The company, under the leadership of Chair Helge Lund, is anticipated to shift its focus back towards oil and gas production as part of an effort to enhance its share price and profitability.
BP reported a profit of approximately £7.2 billion last year, which was a decline of one-third compared to the previous year, primarily attributed to a decrease in oil and gas prices following their peaks related to the geopolitical tensions stemming from Russia’s invasion of Ukraine.
The letter sent by the group of investors, which comprises entities such as Scottish Widows, Hargreaves Lansdown Fund Managers, and Royal London Asset Management, emphasizes their expectation for ongoing accountability in light of BP's previous commitments.
They have highlighted their concerns over the company's investment strategy and the continuing trend of rising emissions from oil and gas operations, despite industry pledges for sustainability.
A representative from Royal London Asset Management stated the importance of clarity from BP regarding future capital allocations, particularly if the company intends to abandon its production targets.
The investor coalition consists of 48 investment and pension firms, including Rathbones Investment Management, the Local Authority Pension Fund Forum, and the University Pension Plan.
The concerns raised by this group of investors may place them on a collision course with US hedge fund Elliott Management, which has recently acquired around a 5% stake in BP. Elliott Management is known for its aggressive investment strategies, often pushing for significant changes in management and company direction, and it is expected to call for the termination of BP's climate goals, such as its target for net-zero carbon emissions by 2050.
Just three years prior, BP had reported record annual profits amounting to £23 billion.
However, there is growing dissatisfaction among investors regarding BP's recent financial outcomes, as its share price has slumped and profits have decreased relative to competitors like Shell.
BP acknowledged receipt of the letter from the investors, committing to a response in the near future.
Elliott Management has been contacted for comment.
