BP Backs Shareholder Climate Proposal

BP has said that while it is prioritizing making its fuels more efficient for its customers, it can not commit to targets that go beyond its own operations.

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.

Bruce Duguid, head of stewardship at Hermes, the investment manager, and lead co-ordinator of the resolution, said: "Achieving a corporate strategy consistent with the Paris goals would be pretty significant for an oil and gas company".

However, BP encouraged investors to reject a stricter climate resolution brought by Dutch shareholder activist group, Follow This.

Investors and analysts have said many oil and gas projects, such as complex and expensive investments in Canada or some deepwater basins, will not be needed in the transition to a low carbon energy.

British Petroleum (BP) has vowed to to link executive pay to its reduction in carbon emissions.

"We will be open and transparent about our ambitions and targets as well as our progress against them", BP Chairman Helge Lund said in a statement.

Going forward, BP's adoption of the Climate Action 100+ recommendations may serve to boot its reputation among investors, green groups and the public; the Institutional Investors Group on Climate Change's (IIGCC) chief executive Stephanie Pfeifer, for example, welcomed the decision.

BP plans to rapidly grow oil and gas production over the next five years thanks to more than a dozen new projects launched in recent years, as well as the $10.5 billion acquisition of BHP's USA shale portfolio last year.

Meanwhile, BP also said that it would be rewarding its 36,000 employees, including its senior management, for their efforts to reduce greenhouse gas emissions. The company previous year set a target of reducing the emissions from its projects by 3.5 million tons by 2025.

However, the company has faced much criticism regarding the specifics of its AET strategy - or lack thereof.

The oil major will describe how its strategy is consistent with the climate change targets, set out in 2015, it said.

She added: "Global carbon emissions need to be reduced urgently and investors expect other companies in the sector to follow suit".

The moves are part of a wider, growing wave of shareholder power being exerted on oil and gas companies to be clearer about their contribution to rising carbon emissions, and what they are doing about it.

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