A group of UK pension funds and other major investors managing more than €1trn in assets has accused BP of undermining shareholder rights after the oil major refused to circulate a climate resolution ahead of its annual general meeting (AGM).
The resolution, filed by Dutch shareholder advocacy group Follow This alongside 16 institutional investors, was expected to appear on the agenda of BP’s AGM scheduled for 23 April. It asks the company to clarify how it plans to protect and grow shareholder value if oil and gas demand declines.
However, BP has declined to include the proposal in its notice of meeting, despite previously confirming that the filing threshold under the UK Companies Act 2006 had been met.
Investors backing the proposal have criticised the move.
Robert Hulme, ESG manager at West Yorkshire Pension Fund, said: “BP must publicly explain why they have chosen to trample on shareholders’ rights, or lose the faith of institutional investors.”
Speaking to IPE, Mark van Baal, chief executive officer of Follow This, said: “This is about far more than just climate or the industry. If BP gets away with this, it sets a precedent, and the most important tool shareholders have, the right to put something on the agenda, will be gone.”
“We have asked a question which nobody can be against […] and it appears that BP cannot answer that question,” said van Baal.
Asked how investors should respond, he noted: “Investors should not sell, that’s exactly what BP would want. Critical investors need to stay invested.”
Breach of UK Companies Act
Follow This said BP’s refusal may breach its obligations under the UK Companies Act.
The group has written to BP’s company secretary, urging the company to issue a supplementary notice to shareholders, including the resolution. If BP does not comply by Wednesday afternoon (11 March), Follow This said it will take legal action against BP.
If the issue is not resolved before the AGM and BP is found to have breached the Companies Act, the oil major could be required to convene an extraordinary general meeting.
Vincent Kaufmann, CEO of the Ethos Foundation, added that the right to place a resolution on an AGM agenda is “a cornerstone of shareholder democracy”, allowing investors to raise sensitive issues and hold boards accountable.
Follow This said there is no modern precedent for a FTSE 100 company refusing to circulate an otherwise eligible shareholder resolution under the UK Companies Act.
The resolution is the sixth filed at BP by Follow This since 2016. The company accepted the previous five and put them to a shareholder vote. In 2020, BP and Follow This also collaborated on a climate resolution for the company’s 2021 AGM.
A similar climate resolution filed by the Australasian Centre for Corporate Responsibility does appear on BP’s AGM agenda. BP has recommended that shareholders vote against it.
Lindsey Stewart, director of institutional investor content at Morningstar, said he believes a sizeable portion of BP’s shareholders will view the move to exclude the resolution as “extreme”.
“The decision not to allow a vote on a proposal that has met the requirements to appear on the ballot is highly unusual. So, whether or not they agree with the proposal, many shareholders are likely to have concerns over whether long-established shareholder rights are being eroded in the UK, as it would appear they are in the US on a number of fronts,” he explained.
“It will also be interesting to see whether the exclusion prompts some BP shareholders to vote against certain board directors – perhaps heads or members of board committees, or even the new chairman – to register their dissatisfaction,” added Stewart.
Disregard for planet and shareholders
“This decision will send a chill down the spine of responsible investors. It is a deeply troubling indication of the company’s growing disregard for both our planet and its shareholders,” said Gavin Grant, chair of independent proxy adviser at Pensions & Investment Research Consultants (PIRC).
“In a single move, the company has managed to sacrifice shareholder rights, climate resilience, and long-term returns all in the hope of insulating its board from short-term pressures.”
A similar proposal has been accepted by Shell and will be included in the notice of meeting for its AGM scheduled for 19 May 2026.
