BP to face shareholder revolt after climate strategy U-turn

BP is bracing itself for a shareholder revolt at its annual general meeting on Thursday — some of the U.K.’s biggest pension funds are planning to ratchet up the pressure on the oil major after it rolled back its emission reduction targets in the wake of record profits.

Dutch group Follow This, a small activist investor and campaign group with stakes in several Big Oil companies, has tabled a resolution at BP’s shareholder meeting.

It calls on the energy giant to align its climate targets with the landmark Paris climate accord and commit to absolute carbon emissions cuts by 2030. Those emissions cuts, Follow This says, should include emissions generated by customers’ use of their oil and gas, known as Scope 3 emissions.

The National Employment Savings Trust, the U.K.’s largest pension fund, the Universities Superannuation Scheme, Border to Coast and Britain’s Local Authority Pension Fund Forum have all indicated they will support the resolution.

Meanwhile, a separate shareholder rebellion could see some pension funds vote against the reappointment of chairman Helge Lund in response to the firm’s move to scale back its green pledges without shareholder consent.

A spokesperson for BP did not respond to a CNBC request for comment.

Follow This says it expects BP’s annual general meeting to be a “contentious” one, warning investors will be “rightfully concerned” about BP dialing back its climate strategy amid an ever-worsening climate crisis.

“We trust that investors who hoped that voting was not necessary in 2022, now realise that voting is crucial to compel BP to align with Paris,” Mark van Baal, founder of Follow This, said ahead of BP’s annual general meeting.

“Paris-aligned voting has to regain momentum in 2023.”

BP, which was one of the first energy giants to announce an ambition to cut emissions to net zero “by 2050 or sooner,” has urged shareholders to oppose the resolution put forward by Follow This, saying it encroaches on the board’s responsibility and accountability for the firm’s strategy.

It also described the resolution as “unclear,” “simplistic” and “disruptive.”

Proxy advisors ISS and Glass Lewis have recommended that shareholders of BP vote against the resolution tabled by Follow This. So, too, has Norway’s $1.4 trillion sovereign wealth fund, Reuters reported last week.

Scientists have repeatedly warned that time is rapidly running out to stave off the worst of what the climate emergency has in store.

To be sure, the burning of fossil fuels, such as oil, gas and coal, is the chief driver of the climate crisis.

For investors, a warming planet is seen as a growing investment risk to their portfolios, and many shareholders are calling for improved disclosure from companies on what these…