Shareholders back off BP to ramp up pressure on Shell and Exxon

BP’s AGM at the International Centre for Business and Technology in Sunbury, was unusual, not just for the lack of climate protestors, who have become a regular feature at oil AGMs, but also because there was not one climate resolution filed, an indication that climate conscious investors were cutting the British oil firm some slack.

The majority of shareholders came out to back BP's board, with indicative votes “for” its chair and directors ranging from 95.89% to 99.22%.

This is despite climate campaigners calling for shareholders to vote against BP’s chair, directors, annual reports, accounts and auditor due to the supermajors lack of action on climate.

Instead, investors have chosen to focus their voting efforts on Shell and Exxon. Last week, Net Zero Investor revealed that Exxon faces a rebellion at its AGM after it filed a No Action Request against a resolution put forward by As You Sow, which left no climate resolutions aimed at lowering emissions to be discussed at the meeting.

In addition, a resolution, led by activist shareholder Follow This and co-filed by a group of 27 investors, has been put forward at Shell’s AGM urging the company to align its medium-term carbon reduction targets with the Paris Climate Agreement.

Mark Van Baal, founder of Follow This, told Net Zero Investor in January that most investors consider a climate resolution at Shell “more urgent” because its CEO has seemed to backtrack on climate commitments recently. “The perception of some investors is that BP has better climate targets than Shell, we don’t agree, both are far from being Paris-aligned,” he emphasised. 

Brunel Pension Partnership, the £35bn Local Government Pension Scheme pool, has also adopted a wait and see approach. Ahead of the AGM, a spokesperson told Net Zero Investor: "Following engagement conversations with the company, we have decided not to escalate on climate grounds. We are keen to see that the climate change strategy isn't weakened and is implemented by the new CEO - we will continue to monitor this and will cast votes accordingly in 2024".

‘Leadership turmoil’

The support for BP’s board contrasts with the “drama” of its AGM last year, where the board was met with investor anger over the supermajor backtracking on its emissions reduction targets for 2030, from 35-40% to 20%-30%, explained Lindsey Stewart, director of investment stewardship research, Morningstar.

Stewart stated that although BP’s course on climate hasn’t changed, the firm's leadership has gone through a series of changes, which include the appointed of Murray Auchincloss as CEO following the abrupt resignation of Bernard Looney in September 2023.

"For the first time in a long time there are no resolutions from either management or shareholders addressing the company's climate strategy.

“I think climate-conscious shareholders of BP probably feel they sent a strong enough message to the board at last year’s AGM.

“So, shareholders will be taking the opportunity to engage with the new CEO privately and get a better idea of his plans for BP in the medium to long term,” Stewart told Net Zero Investor.

Stewart’s sentiment was also shared by Van Baal, who added that “BP’s leadership turmoil seems to push its investors to show more patience”.

However, Huw Davies, senior finance advisor at Make My Money Matter, told Net Zero Investor that investors should still have “doubts” about Auchincloss’ action towards climate. According to a Guardian report in Febuary, Auchincloss stated that BP’s previous “aim” to reduce oil and gas emissions by between 20-30% from 2019 levels by the end of the decade was not confirmed as a “target”.