Published: Sun, February 03, 2019
Markets | By Otis Pena

BP Backs Shareholder Climate Proposal

BP Backs Shareholder Climate Proposal

BP will encourage shareholders at its AGM in May to back the resolution organised by the Climate Action 100+ group, which represents 320 investors managing more than $32tn (£24tn) of assets.

Bruce Duguid, head of stewardship at investment firm Hermes EOS, praised BP's decision to disclose its carbon output.

BP Chairman Helge Lund said the company wants to solve "the dual challenge" of providing more energy with fewer emissions. BP introduced a plan a year ago that sets near-term emissions goals for its operations.

BP has also agreed - as per Climate Action 100+'s recommendations - to develop a new sustainability reporting framework, outlining to investors how it is aiming to keep growing and stay profitable throughout the low-carbon transition.

BP also said Friday reductions in greenhouse gas emissions have now been included in the rewards for its 36,000 employees, including executives.

Oil major BP PLC has joined peer Royal Dutch Shell PLC in opening up on its plans to combat climate change going forward.

Stephanie Pfeifer chief executive for the Institutional Investors Group on Climate Change, which pushed for the motion, said: "Investors are helping ensure climate change is firmly on the boardroom agenda, which is especially important for the oil and gas sector".

BP has agreed to broaden its disclosure on greenhouse gas emissions to show how it thinks future investments in oil and gas align with United Nations -backed climate goals, it said on Friday.

The US economy added 304,000 jobs in January, a surprisingly strong month
The U.S. central bank removed language from its December policy statement that risks to the outlook were "roughly balanced". It was boosted by a 500,000 increase in the number of people working part time, likely because of the government shutdown .

The moves are part of a wider, growing wave of shareholder power being exerted on oil and gas companies to be clearer about their contribution to rising carbon emissions, and what they are doing about it.

"The goal of the Paris Climate Agreement is to limit global warming to well below 2°C above pre-industrial levels, to aim for a global net-zero-emission energy system", Follow This added.

It said progress has been made towards this target, which has now been incorporated into the assessment of the company's performance that is a factor in determining annual bonuses for BP staff worldwide.

Shell provides an example of a company moving in the right direction toward alignment with Paris goals by setting a target to reduce the intensity of emissions from of its products (Scope 3).

"BP today announced that it will report on how it is aligning its strategy with Paris goals".

The Follow This proposal specified emission targets and metrics, based on the Paris accord, to be able to track the company's contribution to helping minimize climate change.

BP will face a second, tougher, climate change resolution at its annual meeting.

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