Campaign group drops legal threats against BP in wake of shareholder rebellion

Dutch campaign group Follow This has dropped litigation threats against British oil major BP, which had blocked its resolution at the AGM earlier this year, citing strong investor opposition to BP's leadership.

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BP had excluded a Follow This resolution on strategies for declining oil and gas prices from its Notice of Annual General Meeting released in March, a move widely criticised by institutional investors.

With insufficient time left to appeal the exclusion in court, Follow This instead backed a second shareholder resolution put forward by ACCR and other investors, focusing on transparency around BP’s capex.

At BP’s AGM in April, more than half of the firm’s shareholders backed a resolution to scrap climate-related disclosures (53%). There was also strong opposition to online-only AGMs (52%) and against the chair (18%), who was ousted from his role shortly after the meeting.

BP’s move to restrict the resolution had backfired, Follow This founder Mark van Baal told Net Zero Investor. “We apparently don't need a court ruling to uphold shareholder rights, now that shareholders have shown they won't tolerate a blocked resolution,” Van Baal said.

“We will never receive a formal confirmation that Manifold has been dismissed because of the AGM, but he might still be in place if the vote had been different,” he added.

BP’s refusal to include the Follow This resolution highlights the limitations of UK company law, which does not provide a remedy for the non-inclusion of resolutions. The campaign group could have argued that directors had breached their fiduciary duty. However, with no personal damages incurred, prospects of success would have been limited and the costs of pushing the case forward significant.

For BP, the reputational risks were more far-reaching than the legal challenges, Van Baal argues. “The AGM clearly showed that BP did not have a good relationship with a significant proportion of its shareholders.”

The firm appears to have taken some of these challenges on board, having recently resumed dialogue with activist shareholders after more than a year of not responding to meeting requests.

“In our recent meeting with BP, we emphasised three competencies for a new chair: expertise in climate, transition, and governance,” says Van Baal.

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