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BP has bowed to pressure from investors. including the Church of England. by backing a plan to explain how its strategy and investments are consistent with the Paris climate agreement.
Oil major BP PLC’s board said Friday they will back a shareholder resolution at its annual meeting this year that calls for the company to align its business strategy with the goals of the Paris Agreement on climate change. reports The Guardian.
The resolution comes from Climate Action 100+. a group of 300 investors with $32 trillion in assets. including the investment arms of HSBC. Legal &. General and the Church of England. The resolution will be voted upon at the company`s annual meeting.
The group wrote in its resolution the action was taken because BP `has not yet demonstrated` that its strategy is consistent with the Paris goals. according to CNN News.
“This is a welcome step by BP. which will hopefully lead to more action on climate change by others in the oil and gas sector.“ said Emma Herd. a member of the global Climate Action 100+ Steering Committee and CEO. Investor Group on Climate (IGCC).
The broader initiative to get transparency
The move by the Climate Action 100+ initiative is just part of a growing wave of shareholders exerting their power to scrutinize oil and gas companies over their contributions to rising carbon emissions. and perhaps. more importantly – asking the companies what they are going to do about it.
It is clear that the impacts associated with climate change and the transition to a low-carbon economy pose financial risks to companies and investors. especially if they are not prepared.
In the proposal. BP is tasked with developing a business strategy in line with two of the Paris deal goals by the end of its 2019 financial year – holding temperature rises to well below 2C and reducing carbon emissions to net zero by the second half of the century.
Additionally. BP will be required to justify how its capital expenditures in fossil fuel projects were consistent with the landmark climate deal and set new metrics and targets. Helge Lund. BP’s chairman. said: “The additional reporting specified in the resolution will build on BP’s history of progressive action in this area.“
BP has not specified what metrics and targets it will set. should the resolution be passed – but there is talk of setting targets for the carbon intensity of its products and linking executives’ bonuses to carbon emission cuts.
