Investor pressure shifts BP’s climate strategy
Le Monde | Under pressure from activist fund Elliott Management, major British oil company BP is making a significant U-turn. The oil giant is shifting its focus back to hydrocarbons and scaling back its green energy investments – despite previously strong climate commitments and a recent drop in profits.
“BP’s reversal on its climate commitments came barely two weeks after the discovery of Elliott’s position,” notes Tarek Bouhouch, the French representative of Follow This, a green shareholder in BP’s capital. “Management panicked.” The New York-based fund indeed immediately made it known that it wanted BP to divest its assets related to the energy transition, focus on hydrocarbons, and make savings in order to free up cash flow that could be returned to shareholders.
‘We won’t allow Elliott to dictate the rules,” retorts Tarek Bouhouch. He recalls that BP had its climate commitments approved in a 2022 vote supported by more than 80% of shareholders.
[…]Mr. Bouhouch recalls that internally, BP’s analysts predict an oil peak in 2025, followed by a decline in hydrocarbon consumption. “It is particularly disturbing that the group is ignoring the advice of its own experts,” he slips in.
To signal their discontent, a group of 48 investors demanded a vote on BP’s new strategy at the general meeting on April 17th. Failing to get their way, they orchestrated an unprecedented revolt movement against Helge Lund, who is resigning. “We got 24% of shareholders to vote against his reappointment,” says Mark van Baal, the founder of Follow This.
