Follow This, a BP activist investor, urges voting against Chair Lund on energy transition

BP activist investor Follow This intends to ask shareholders at the 17th April shareholder meeting to vote against Helge Lund being reappointed, claiming he had a duty to give investors a voice on the scrapping of energy transition targets.

In a February strategy overhaul, CEO Murray Auchincloss announced that BP would cut spending on renewables while increasing investment in oil and natural gas. This was a revamp of the 2020 strategy, which had predicted a 40% reduction in its oil and natural gas output by 2030.

The main criticism of Follow This is that the shareholders haven't been given a chance to vote directly on the new strategic direction.

This year, Follow This, who won 20% support at BP’s 2021 annual meeting for their climate resolutions and 17% for 2023, swapped a resolution to urging a voting against Lund based on governance grounds.

In a Thursday statement, the group stated that it did not want the chairperson to resign. "We want him heed the message that has crossed a line in governance and retraced his steps by giving shareholders a voice."

A BP spokesperson stated: "We engaged extensively across our entire shareholder base - we did so after 26 February. According to our engagement, the majority shareholders do not want an advisory vote about our plans.

In the interim, we will continue our engagement and disclose our plans via our annual report materials. "Our ambition is to become a net-zero company by 2050, or earlier."

BP held a vote in 2022, and more than 88% of its shareholders backed the former CEO Bernard Looney’s plan to reduce oil and gas production and invest billions into renewable energy.

Other shareholders have complained that their voices were not heard.

In February, a group of investors who had around 6 trillion pounds (6.48 trillion dollars) in assets under management or engagement wrote to Lund to ask for a vote regarding BP's climate governance and capital spending.

While investors who are concerned about climate change may be unhappy that BP has abandoned most of Looney’s plans, BP’s share price shows that the 2020 strategy failed to appeal to a broader audience.

As of Wednesday, BP shares had risen by 88% over the past five years. Exxon's share price was up 246%, and Shell's 168%.

Sources have reported that pressure is also increasing since Elliott Management has built a nearly 5% stake in BP, becoming one of the largest shareholders.

(source: Reuters)