Economy

BP joins Shell in making plans to combat climate change

BP joins Shell in making plans to combat climate change”

"Greenhouse gas emissions reductions have now been included as a factor in the reward of 36,000 employees across the group and around the world, including executive directors", the company said.

It seems that BP, the energy giant, has bowed to the intensifying pressure from investors, including the Church of England as the company announces that will get behind a shareholder effort which would require the company to work towards the objectives of the Paris climate change agreement.

"This is good news for both investors and the planet", said Bruce Duguid, head of stewardship at the investment management firm Hermes EOS and the lead coordinator of the resolution.

BP also has joined Shell in linking remuneration for its staff to the company's greenhouse gas emissions.

Its board has made a decision to back a shareholder resolution at its next annual general meeting calling for strict new climate change plans and disclosures at the company.

BP said on Friday that it planned to go along with investor demands to clearly outline how its investments in oil and gas would be aligned with the Paris climate goals.

Oil major BP PLC has joined peer Royal Dutch Shell PLC in opening up on its plans to combat climate change going forward.

BP Chair Helge Lund said: "BP is committed to helping solve the dual challenge of providing more energy with fewer emissions".

The company would also have to evaluate whether each new material capital investment is consistent with the climate agreement.

To align with Paris, BP would have to diversify into clean energy production, shrink current investments in oil and gas development, or otherwise reduce its full range greenhouse gas emissions.

The proposal calls for the company to publish a business strategy in line with two of the Paris climate change agreement goals by the end of the 2019 financial year.

Shell, for example, said previous year that it would start linking executive pay to short-term carbon emissions targets in 2020 after coming under pressure from shareholders including the Church of England. "This is a great example of investors and BP committing to the goal of building a low carbon future". These emissions are much bigger than those from the company's operations.

The move from BP builds on the firm's Advancing the Energy Transition (AET) strategy, which has a headline aim of generating reductions of 3.5m tonnes of Carbon dioxide equivalent annually throughout the businesses by 2025. BP's statement shows that it is recognizing investor concerns regarding its significant climate risks and responsibilities.

"BP needs to follow its announcement with concrete, bold action".



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