BP Plc lined the road leading to its annual shareholder gathering in Scotland’s oil capital with hoardings touting investments in renewable energy. Inside the meeting, there was a fierce debate on whether the energy major was telling the truth.
On Tuesday, investors large and small grilled BP’s Chairman Helge Lund and Chief Executive Officer Bob Dudley for over two hours on the company’s plans to tackle climate change and its preparation for the energy transitions. It became so intense at times that a security team had to remove protesters screaming “this is a crime scene.”
Protests at oil company events aren’t new. But investors controlling trillions of dollars of funds are now also putting their weight behind attempts to get oil companies to play a bigger role in reducing global emissions. That’s increasing the urgency for the industry to take action.
“It raises a lot of questions for investors around what is the purpose of the company? What is your role in this transition?” Victoria Barron, a fund manager at Newton Investment Management, said in an interview after the AGM. “The details are what we need because we’re not getting that right now.”
About 99% of BP’s shareholders passed a resolution at the AGM asking the company to disclose more information about how its investments align with the Paris climate accord. The proposal was backed by a group called Climate Action 100+, whose investors together manage more than $33 trillion of funds.
BP vigorously defended its record, pointing out multiple times that it was the first large oil company to acknowledge climate change. Former CEO John Browne said in a speech at Stanford University in 1997 that it was important for the world to act on it. Lund suggested it was disappointing governments didn’t heed that call with strong legislation.
“I can assure you that there is absolutely no hesitancy in BP in terms of being ambitious, being willing and able to lead in the energy transition,” Lund said. “And I speak about every level of the company.”
However, that argument backfired. Many shareholders said the company was pouring money into lobbying against strong climate policies. Lund disagreed, but said it would review its practices around climate lobbying, and that it would report its findings next year.
While shareholders overwhelmingly approved the climate resolution, another more stringent filing didn’t get even 10% of the votes. That wanted BP to set specific climate targets for emission reductions, including those of its customers.
BP’s management had asked investors to reject this proposal. Dudley expressed irritation at the notion oil companies should take responsibility for their customers’ actions, and said he especially can’t prevent people from consuming more than they need.
“We can’t set a target on how people will use our products,” Dudley said. “That’s effectively what this argument is coming down to.”
Royal Dutch Shell Plc, which was also meeting its shareholders across the North Sea in the Netherlands amid protest, has agreed to take into account its customers’ emissions.
Mark van Baal, the head of Follow This, the group which proposed the failed resolution, likened BP refusing to include customer emissions to tobacco company executives quitting smoking while continuing to sell more cigarettes.
Despite the grilling, senior BP executives said they were glad investors had a chance to express their views. BP’s management had supported the resolution that was approved, and said in a statement it was pleased that it passed.
As the meeting wrapped up, shareholder Louise Rouse said she hoped next year more investors would have access to the meeting itself. London-based BP held the AGM in Aberdeen in Scotland on the same day as Shell, and declined to webcast it. She wanted the company’s managers to rethink if they really were at the mercy of governments when it came to acting on climate.
“BP is an active driver of what happens on climate change. You help shape policy,” Rouse said.
As she spoke, other shareholders applauded.