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A group of 48 institutional investors called BP to give shareholders a voting on any plans by the major oil to bring back its climatic objectives, putting in place a potential confrontation with the management of the hedge funds of American activists Elliott.
The intervention of investors, in particular Rathbones Investment Management, Phoenix Group, Robeco and Royal London Asset Management, follows a commitment from the Director General of BP, Murray Auchincloss, to “fundamentally reset” the group’s strategy in the face of Elliott’s pressure for Elliott Stimulate performance.
Elliott built a participation of almost 5% in BP and pushes Auchincloss to sell important parts of the company, including some of its green energy investments, the Financial Times reported last week.
But other investors fear that Achincloss will decrease climate commitments and refocus on the production of oil and gas during a day of investors in London next Wednesday.
“BP previously proposed a shareholder vote on its transition strategy and we expect a similar level of responsibility to be maintained for future changes in material strategy,” investors said this week in a letter to the presidency of BP Helge Lund, seen by the FT.
The group holds 2.5% of BP shares combined, according to FT calculations, just over half of Elliott’s participation, stressing the influence of the hedge fund while the company assesses its options.
The demand increases the pressure on Lund and Auchincloss before the day of investors, which is considered by Elliott and other shareholders as a crucial test of the management of BP.
Under a advanced decarbonization strategy, led by Lund and former managing director Bernard Looney, the company in 2020 is committed to reducing its oil and gas production by 40% by 2030.
Two years ago, he reduced this commitment to a reduction of 25% and some investors expect the objective to be completely rebuilt.
Auchincloss, which was appointed in January 2024, has already described new oil and gas expenses that analysts provide that BP production will retain current levels. BP remains the only major oil and gas with a last target to reduce production.
If the production objective is lowered or deleted, the shareholders want BP to disclose more detailed information on its expenses in fossil projects to ensure that it will continue to reduce emissions and cannot be found with blocked assets as the petroleum demand decreases.
“We need a clearer image of the resilience and the alignment of this expenditure with the objectives of Paris,” said Carola Van Lamoen, responsible for sustainability at Robeco, referring to the climate agreement of the United Nations 2015.
In 2022, 88% of BP shareholders voted in favor of the company’s strategy, in particular the commitment to reduce the production of oil and gas. The group has not offered voting shareholders on the decarbonization strategy since.
Given the modifications that Auchincloss should announce next week: “It is appropriate to ask shareholders to have the possibility of voting on the [strategy] In Aga 2025, ”said investors in the letter.
BP confirmed that he had received the letter, adding that he would respond in due time.
Lund, a former director general of the Norwegian Energy Group Equinor, has been president of BP since 2019 and has played a decisive role in the development of its current strategy. Auchincloss has been on the board of directors since 2020 and was a financial director before taking the first job.
Although Elliott did not publicly declare his expectations, the Hedge Fund wants to see a “fundamental pivot”, according to a person familiar with his reflection.
This should not mean short -term growth in oil and gas production, but must include “a high capital allowance, the right size of their costs [and] A divestment plan, ”added the person.
Elliott refused to comment.
