At the end of this month is the AGM for oil and gas major BP, which is fast becoming one of the key flashpoints of this proxy voting season. The development that has contributed the most to this is the board’s refusal to table a climate-related shareholder resolution from Follow This and more than a dozen institutional investors, including several European pension funds.
In an update on its website in response to proxy adviser recommendations, the company has said it rejected the picture painted by the Follow This group, according to which BP is carrying out an “attack on shareholders’ rights”. It said the Follow This proposal was not legally valid and that the board used its discretion in 2023 to allow a resolution from Follow This that was not legally valid but it “made it clear at the time that we would not necessarily continue to table invalid or ineffective resolutions”.
”Given our clear imperative this year to drive focus and discipline, the board concluded that it should not table an ineffective resolution,” the new chair Albert Manifold said in a Q&A published on the BP website.
Just what the reaction from shareholders will be remains to be seen. Last week, it was reported that the two major proxy advisers were recommending votes against management, albeit with some differences. The Local Authority Pension Fund Forum has also recommended a series of votes against, and Legal & General Investment Management has also flagged opposition. For LAPFF, the actions BP has taken or proposed are “attempts to insulate the board from scrutiny at a time when transparency and robust governance are most needed”.
As the proxy season unfolds, a new report out last week shed more light on a topic that has become more and more prominent in recent years: voting divergence between asset managers and asset owners. Building on work done by the likes of Andreas Hoepner for UK asset owners and research from academic Ian Robertson, this new analysis covered 4.57 million vote records from 464 institutional investors across multiple geographies and spanning a wide range of environmental, social and governance issues and sectors.
It found a substantial disconnect between owners and managers, and a transatlantic divide. “UK and EU asset owners vote ‘for’ at rates 27.8 to 68.3 percentage points higher than US asset managers across six categories, reflecting fundamentally different stewardship philosophies,” the report said.
Although BP has not accepted Follow This’ shareholder resolution, Shell has. It is, however, recommending that shareholders vote against it.The resolution asks the company to publish a report disclosing its strategy to create shareholder value under scenarios of declining demand for oil and gas. One of the reasons that Shell gives for urging shareholders to reject the resolution is that it “misinterprets the use of scenarios”.
In the investment industry, climate scenario analysis has become more common over the years, at least in part due to regulation, but troubled methodologies and unrealistic pathways have undermined the credibility of the process. There are efforts to get it taken more seriously, however, as IPE has reported in a recent analysis.
Items to note:
- IPE’s Transition Conference & Awards 2026 will take place on 22 April at The Hague.
Susanna Rust
ESG Editor
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