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A group of 48 institutional investors have asked BP to give shareholders a vote on their oil major plans and vote to return to its climate targets, bringing potential conflicts with the management of US activist hedge fund Elliott. It’s set.
Interventions by investors such as Rathbones Investment Management, Phoenix Group, Robeco and Royal London Asset Management have followed the pledge of BP’s CEO Murray Auchincloss, and faced pressure from Elliott to create a “root” strategy. I follow the pledge to reset my order.
Elliott has built almost 5% stake in BP and is pushing Auchicloss to sell a key portion of the business, including some of its green energy investments, the Financial Times reported last week.
However, other investors are concerned that Auchicloss will ease climate commitments next Wednesday for investors in London and refocus on oil and gas production.
“BP previously provided shareholder votes on transition strategies and expects a similar level of accountability to remain for future material strategies changes,” the investor saw BP this week by FT. He said in a letter to Chairman Helge Lund.
The group holds a total of 2.5% of BP’s stock, according to FT calculations just over half of Elliott’s interests, highlighting the hedge fund’s influence as the company evaluates its options.
This demand raises pressure on Lund and Autinlos ahead of investors’ days, which Elliot and other shareholders consider as a key test of BP’s leadership.
Under an industry-leading decarbonization strategy led by Lund and former CEO Bernard Druney, in 2020, the company promised to cut oil and gas production by 40% by 2030. did.
Some investors are concerned that Auchicloss will reduce climate commitments and refocus on oil and gas production ©Mark Felix/AFP Getty Images
Two years ago, it thwarted its commitment to a 25% reduction, and some investors hope that the target will be completely scrapped.
Aucincloss, appointed in January 2024, has already outlined new oil and gas spendings that analysts expect to maintain BP production at current levels. BP remains the only oil and gas major with hard targets to reduce power.
If production targets are lowered or deleted, shareholders will be able to disclose more detailed information about BP spending on fossil projects, continue to reduce emissions, and assets stuck as oil demand decreases. I’ll make sure it’s not left behind.
“We need a clear picture of this spending resilience and alignment with Paris’ goals,” he said, referring to the 2015 United Nations Climate Agreement, Robeco’s director of sustainability, Carola van Lamoen. said.
In 2022, 88% of BP shareholders voted in favour of our strategy, including their commitment to reducing oil and gas production. The group has not provided shareholders with a vote on decarbonization strategies.
Given the changes Auchicloss is due to announce next week, “It is timely to require shareholders to be given the opportunity to vote for (Strategy) at the 2025 AGM,” the investor said in the letter.
BP confirmed that it received the letter and added that it would respond in time.
Lund, former CEO of Norwegian Energy Group Equinor, has been chairman of BP since 2019, helping to develop the current strategy. Auchicloss has been on the board since 2020 and was Chief Financial Officer before working as a top employee.
Elliott has not publicly stated its expectations, but hedge funds want to see a “basic pivot,” according to those familiar with the idea.
It doesn’t need to mean short-term growth in oil and gas production, but it should include “strong capital allocation, right-sizing their costs (and) their sales plans,” the person adds I did.
Elliot declined to comment.
