Oil giant BP has removed a discussion on a fundamental overhaul of its strategy from the agenda for its upcoming AGM, defying an investor call for a vote on its climate strategy.
The firm, which is facing growing pressure from shareholders amid weaker-than-expected profit figures for Q4 2024, has promised a ‘fundamental reset’ of its strategy. This includes increased investments in oil and gas exploration beyond 2027 while scaling back investments in its low-carbon and renewables business.
Yet this initiative has been challenged by a group of long-term investors, including Robeco, Rathbones, and Phoenix Group, who last month sent a letter to BP chair Helge Lund, urging him to allow shareholders a vote on its climate strategy.
The investors, collectively representing more than $5trn in assets, are highlighting the fact that BP has drastically ramped up its investments in new fossil fuel exploration and warning that this exposes investors to stranded assets.
BP today published the notice of its Annual General Meeting, which is due to be held on 17 April, yet a discussion of the firm’s climate strategy is not on the agenda.
A spokesperson for Robeco told Net Zero Investor in response to the news: "We still believe that a shareholder vote on a changed transition strategy would be best practice. Although BP has opted not to put its revised strategy up for another Say on Climate vote, we recognise the strong investor support for robust climate governance and transition plans. We are actively considering our next steps for engagement and voting. Despite the current situation, we remain optimistic about having constructive discussions on how BP can demonstrate the resilience of its capital allocation through the energy transition."
The decision has been criticised by shareholder campaign group Follow This. “BP's disregard for shareholders will not sit well with a sizeable number of investors who want the company to continue its transition,” said Mark van Baal, founder of Follow This.
Shareholders who wish to challenge BP’s strategy now have limited options. With the formal deadline to file resolutions having passed, the only remaining way to express discontent is through a vote against BP’s leadership.
The largest shareholders in BP are BlackRock, Vanguard, and Norges Bank Investment Management, neither have so far expressed a view on the firm's net zero U turn. Robeco, one of the co-signatories of the letter to Helge Lund holds 0.88% of BP's shares, according to Market Screener.
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