BP to Vote on Climate Targets
Tomorrow, shareholders at BP are due to vote on reducing carbon emissions targets. The oil and gas giant has come under fire for reducing its goals in February without permission from its stakeholders. Now, with the voting set to happen this week, the company is trying to influence the outcome by asking shareholders to vote against the climate activist resolution.
Shareholders are deciding whether BP should cut its carbon emissions by 50% by 2030 at its AGM on Thursday 27th April. Pressure is coming from all sides to make sure their climate policies are aligned with the 2015 Paris Agreement. It is hoped that by highlighting this important climate issue, other companies will realise that they need to reduce emissions significantly in the next decade.
Prior to this meeting, BP reduced its carbon emissions targets from 35-40% to 20-30% over the same time frame. Not only this, but indications point to investors looking to oust Helge Lund, current chairman, over his pay and the watered down climate targets. It seems that more and more people are becoming environmentally-conscious and are reevaluating priorities in the cost of living crisis.
The activist group, Follow This, has called for absolute emissions cuts by 2030 in line with the Paris Agreement, which includes the emissions from fuel combustion that groups like BP sell. BP doesn’t agree with this sentiment, arguing it doesn’t allow them to set a reasonable strategy for the company. Despite more environmental groups looking for concrete measures backed by scientific consensus, the greatest polluters and money-makers will always drag their heels and look for excuses to not make changes.
It’s widely believed that greenhouse gas emissions need to be cut by 43% by 2030 in order for any hope of meeting Paris Agreement targets. These are compared to 2019 levels to keep global warming temperatures below 2°C above pre-industrial levels. BP, on the other hand, doesn’t believe the activist resolution is in the best interest of the company or its shareholders. In other words, if they aren’t able to pollute as much, they can’t make as much money.
Looking at both Shell’s and BP’s emissions, it’s clear that scope 3 emissions need to be cut in order for any meaningful impact to be achieved. Scope 1 and 2 emissions are to do with how a company operates, what electricity it uses and from vehicle emissions in any fleet. Scope 3 emissions, on the other hand, are from the combustion of fuel that’s sold. According to data from Reuters, these account for at least 80% of an oil and gas giant’s emissions.
The most baffling decision from these companies is to not diversify and see how much they can capitalise on electric or renewable power generation. The tides are changing to renewables and EVs, and moving away from fossil fuels, but giants in the sector are clinging on to easy money. The biggest change will come when these companies eventually decide to reduce their environmental impact.