Majority of BP Shareholders Vote For Climate Change Resolution

An overwhelming majority (98 percent) of shareholders voted for a resolution on climate change at a BP annual general meeting held on April 16. The resolution requires increased annual reporting on climate change risks. A 75 percent vote was required to make it binding.

The Aiming for A investor coalition led the shareholder resolution. Launched in 2012, Aiming for A is led by charity fund manager CCLA, one of Britain’s largest charity fund managers. The Church of England’s National Investing Bodies are part of the $253.4 billion Aiming for A investor coalition. Over 50 institutions co-filed the shareholder resolution, including eight pension funds with assets over $15 billion.

Is the passing of the resolution really something to cheer?

“I just wanted to welcome Special Resolution 25,” Bob Dudley, group chief executive told shareholders. BP has “consistently advocated for stronger government action and have been open and transparent about our environmental impact,” he said. The company’s challenge is “to make the case for the necessary role of fossil fuels, and further transparency supports that case.”

Making the case for the “necessary role” of fossil fuels like oil and gas does not sound compatible with reducing greenhouse gas emissions. So, is the resolution’s passing by BP shareholders really something to cheer? According to a statement by the Aiming for A coalition, it “sends a strong signal to BP about the importance shareholders place on the company's long-term response to the challenge of transition to a low-carbon economy.” However, not everyone is as excited. A ThinkProgress article points out that while passing the resolution is historic for a major oil and gas company, “the decision is less about addressing the causes and effects of climate change than it is about navigating the new green economy to maximize the company’s profits.”

Perhaps the correct response is the one that Matt Davis, communications director at ShareAction, one of the groups that presented the resolution, offered. “The real question now is the rigor with which BP lives up to its commitment on this stuff,” he told Carbon Brief. In other words, let's watch and see what BP does.

BP not only recognizes that climate change is occurring, but it already puts an internal price on carbon. The company stated in its 2014 Sustainability Report that it assess how potential carbon policies could affect its businesses and applies “a carbon price to our investment decisions, where relevant.” BP also supports governments putting a price on carbon. Specifically, it supports a price on carbon that “treats all carbon equally, whether it comes out of a smokestack or a car exhaust,” which the company believes “will make energy efficiency more attractive and lower-carbon energy sources more competitive.”

Should we just demonize oil and gas companies?

While some climate change activists think we can wean ourselves off the use of fossil fuels tomorrow, the reality is that energy demand is only increasing. BP predicts energy demand will increase by almost 40 percent in the next 20 years, driven mainly by developing countries. Clearly, what is needed is innovation -- and that takes money. BP does invest in energy efficiency technologies and alternative energies.

We have a choice to make. We can choose to demonize oil and gas companies, or we can keep a close eye on their climate change policies and challenge them when needed.

Image credit: Mike Mozart