In 2015 and 2019, BP passed proposals requiring the company to report on certain climate-related metrics. Those proposals were broadly supported by management and shareholders alike. Now, citing the changing regulatory landscape, the energy giant is advancing a resolution to nullify those obligations. The company announced its intention to vote on this resolution at its upcoming annual general meeting. Not all shareholders are happy with the change. A group of investors led by Follow This attempted to advance a counter-proposal requiring the continued disclosure of climate information. BP refused to include that proposal, teeing up a potential legal battle. Follow This argues for the importance of climate disclosures in a letter to BP, stating:
“Our resolution requested disclosure that is material to any assessment of BP’s strategy, resilience, and long-term value. The issues this resolution raises extend beyond BP alone. As diversified, long-term investors, our returns are driven primarily by the stability of the broader economy, and unmanaged transition risks in the energy system pose material threats to portfolio-wide value. Transparent disclosure of how BP would navigate declining demand scenarios is therefore essential not only for assessing company-level resilience, but also for understanding risks to shareholders’ diversified holdings.”
Support for climate-related shareholder proposals in the US is down substantially. The outcome of this shareholder action may indicate if a similar trend holds in the UK.
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