A group of major European investors has secured the backing of BP for a shareholder resolution calling on the oil and gas major to do more to explain how its strategy is consistent with internationally-agreed climate change goals. 

BP will recommend that shareholders vote in favour of the resolution at its 2019 annual general meeting, saying its support followed “constructive engagement” with the asset owners and asset managers.

“In accordance with the proposed resolution BP will describe how its strategy is consistent with the Paris goals, as well as setting out a range of additional related reporting,” the company said in a statement this morning.

The investor group comprises Hermes EOS on behalf of its stewardship clients, Legal & General Investment Management (LGIM), Aviva Investors, M&G Investments, Newton Investment Management, HSBC Global Asset Management, the Church Commissioners for England, APG – on behalf of the €399 Dutch civil service pension scheme ABP and other pension fund clients – and the Local Authority Pension Fund Forum, which represents UK public sector pension funds.

The investors have been acting as part of Climate Action 100+, an investor initiative to engage with major greenhouse gas emitters.

Sacha Sadan, director of corporate governance at LGIM, said: “Climate change is a serious issue that urgently needs collective action. This is a great example of investors and BP committing to the goal of building a low carbon future.”

Steve Waygood, chief responsible investment officer at Aviva Investors, said BP’s support for the resolution was “a modest but important step towards a business strategy that is more fully aligned with the Paris Agreement”.

The investors said BP had shown leadership on climate change in a number of important areas, but that it had not yet demonstrated that its strategy was consistent with the goals of the Paris agreement.

Based on BP’s current disclosures it was not possible to evaluate the extent to which the company’s investments in fossil fuel reserves or resources were consistent with the Paris goals, they added.

Scope 3 target call rejected  

The resolution calls on the company to describe how it evaluates the consistency of each new material capital investment with the Paris goals, and to report metrics and targets, including targets to promote reductions in its operational greenhouse gas (GHG) emissions, and any links between targets and executive pay.

BP today announced that progress towards a previously set GHG emissions reduction target had now been incorporated in the assessment that feeds into annual bonuses for BP staff worldwide.

BP’s AGM will also see investors asked to vote on another shareholder resolution, submitted by shareholders organised by the Dutch campaign group Follow This. It asks the company to set and publish targets for the reduction of carbon emissions in line with the Paris climate change agreement, including for Scope 3 emissions, which are emissions from the use of BP’s products.

BP today said it had decided not to support the Follow This resolution.

Late last year, in a ground-breaking joint statement with Climate Action 100+ investors Shell announced it had agreed to set short-term targets to reduce carbon emissions, including those from consumers’ fuel use, and link them to executive pay.