Investor advisory firm PIRC has sided with green rebels to recommend that BP shareholders vote against the company's chairman over climate concerns and in favour of an activist resolution at the group's annual general meeting on Thursday.
Resolution 25 put forward by campaigners at Follow This calls for BP to align its emissions reduction plans with the Paris agreement. It comes after the energy giant did a U-turn in February on its climate commitments as soaring fossil fuel prices helped it reach the higest earnings in its 114-year history.
PIRC joins the National Employment Savings Trust (Nest), which represents about 11 million individual workplace pensions, in backing Follow This. The campaign group has also garnered support from the Universities Superannuation Scheme and the council pensions fund Border to Coast, which have both also agreed to vote for the resolution.
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Other investor advisers - ISS and Glass Lewis - have recommended BP shareholders oppose the Follow This resolution. Norway's $1.4 trillion sovereign wealth fund, one of the world's largest investors and itself built on oil and gas revenue, has also said that it will vote against the proposal from Follow This.
BP’s chief executive, Bernard Looney, originally set out a “net zero carbon” plan that included a goal to cut the company’s oil and gas production by 40 per cent between 2019 and the end of this decade. However, in February he reset the target to 25%.
Speaking at that time, he said: “It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon – all three together, what’s known as the energy trilemma.
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“To tackle that, action is needed to accelerate the transition. And - at the same time - action is needed to make sure that the transition is orderly, so that affordable energy keeps flowing where it’s needed today. As an integrated energy company, BP is very deliberately set up to help on both counts.”
PIRC, Nest, the Universities Superannuation Scheme and Border to Coast are also expected to vote against the re-election of BP’s chairman, Helge Lund, in a separate protest at BP’s decision to water down its green pledges without shareholder consent.
BP has urged shareholders to vote against the Follow This resolution, describing it as “simplistic” and “disruptive" and adding that it would threaten BP’s “long-term value creation”.
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