BP’s chairman said he recognized that the world’s energy consumption was on “an unsustainable path” and the oil major’s days of chasing ever higher output are coming to an end. Writing in the Financial Times on Tuesday, Helge Lund acknowledged the need to repurpose BP’s business for a lower-carbon future. However, he did not detail how it would do so and continued to reject investor calls to set hard emissions targets for the use of the fuels it produces.
“With the oil price above $70 a barrel for Brent crude, surely BP wants to keep producing and selling as much as it can for as long as it can? On the contrary,” he said, timing his comments with the company’s annual meeting in Aberdeen. Two shareholder resolutions on climate change will be put to a vote at Tuesday’s AGM in a sign of how BP, like other oil and gas majors, is under growing investor pressure to show it is taking action to prevent global temperatures rising.
One resolution proposed by Climate Action 100+, a coalition of some of the world’s largest investors that manage $32tn in assets, has called on BP to detail how its business is aligned with the commitments of the Paris climate accord. Mr Lund, whose statement is supported by chief executive Bob Dudley, maintained that BP’s strategy is “consistent” with meeting the Paris goals to keep temperature rises to well below 2C from pre-industrial levels – an assertion that has been challenged by big shareholders and environmental activists. BP has “transformed many times over … and are in the process of doing so again”, Mr Lund said, without spelling out how BP was shifting its business strategy or changing its spending plans.
“The evolution into broader energy companies would require new carbon neutral businesses to be created at an unprecedented rate and existing businesses to be transformed,” he said. Mr Lund added that a faster transition would require “a huge re-engineering of the energy system” and would present a significant challenge for the world’s biggest oil and gas companies. But “the world can’t continue along its current path”.