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‘Unprecedented’: Why BP investors holding billions in shares are backing a climate resolution (GreenBiz)

‘Unprecedented’: Why BP investors holding billions in shares are backing a climate resolution (GreenBiz)

  • Earlier this year, 58 BP investors holding the equivalent of c. USD12.7bn of shares (c. 10%) co-filed a resolution “urging the company to set out a business strategy consistent with the goals of the Paris Agreement”.
  • Similar action last year forced the company’s rival Shell to back a shareholder resolution on climate change that called for a link between executive pay rewards and the company’s performance on emission reduction targets.
  • The resolution sets out a number of transparency requirements and stresses that complying with the Paris Agreement requires considerable investment, but does not require BP to set emission reduction targets covering all of its emissions.  
  • Notably, the company has already stated it would support the resolution at this year’s AGM (May 21st).
  • Among the investors behind the Climate Action+ resolution are some the UK’s largest asset and fund managers – including Aviva Investors; HSBC Global AM; Legal & General Investment Management; M&G Investments; Schroders; UBS AM; and Royal London AM.

Analysis & Comments

  • As stated in the article, we are seeing unprecedented levels of pressure on large multinational companies to clarify their long-term plans on transforming into sustainable businesses.
  • This action has been developing for some time, with various large scale investors and asset owners starting to collaborate in the mid 2010s.
  • It can be argued that there is a degree of self-interest around the value of stranded assets if the companies take no action, but I also think that both asset owners and asset managers now see this as an issue on which action is needed
  • I expect to see this template repeated around other environmental and climate change investment issues over the coming years

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