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BP to be more transparent about climate efforts amid investor concerns

By
Renzo Pipoli
BP on Friday announced it has accepted one of two shareholder proposals for greater transparency of the company's efforts to combat climate change. Photo courtesy of BP
BP on Friday announced it has accepted one of two shareholder proposals for greater transparency of the company's efforts to combat climate change. Photo courtesy of BP

Feb. 1 (UPI) -- BP on Friday announced it plans to increase disclosure on its efforts to fight climate change after requests from two groups of investors.

The company said it will support a proposal by a shareholder group called Climate Action 100+, which would see BP disclosing investment decisions, emission impact of operations and products, and how strategy aligns with accords in December 2015 in Paris to limit global warming.

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BP will start new efforts to better fight climate change by incorporating emissions goals into the payment of bonuses, as well as broaden reporting on its environmental efforts, starting in 2019.

"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.

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The approved resolution sets targets and allows disclosure as long as it is "prepared at reasonable cost; and provided that nothing in this resolution shall limit the company's powers to set and vary its strategy, or associated targets or metrics," BP said.

Other efforts include incorporating descriptions of how it evaluates emissions impacts as part of decisions related to capital investment to explore and develop oil and gas projects. The proposal will be presented at the company's annual shareholders in May.

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While adopting that proposal, BP rejected a separate resolution from shareholders organized by the activist group Follow This that also demanded more transparent efforts to fight climate change including clearly set emission targets.

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Follow This describes itself as "a group of responsible shareholders in oil and gas companies" that organizes shareholder support to commit to the goal of the Paris Climate Agreement to limit global warming to below 2 degrees Celsius.

The group buys stock in oil companies and tries to influence their impact on the environment by organizing shareholders to request the publication of emissions targets for hydrocarbon production and refining, as well as that of derived products like fuels and plastics.

The Follow This proposal specified emission targets and metrics, based on the Paris accord, to be able to track the company's contribution to helping minimize climate change.

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The Paris accord entered into effect in November 2016 and has been ratified by parties to the convention that account for at least 55 percent of global emissions.

The aim of the Paris agreement is to have a coordinated effort to fight adverse effects of climate change, including a rise in extreme weather events and slow onset threats such as rising ocean waters resulting from higher temperatures in the poles.

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BP is one of the world's seven biggest oil and gas companies. Oil and gas have been identified as one of the leading causes of emissions and global warming.

Follow This is making parallel efforts with oil companies Royal Dutch Shell and Equinor that also involves buying stock to have better access to information and try to influence changes.

Companies must work to reduce emissions "to levels compatible with the global intergovernmental consensus specified by the Paris Climate Agreement," Follow This said

"The goal of the Paris Climate Agreement is to limit global warming to well below 2°C above pre-industrial levels, to aim for a global net-zero-emission energy system," Follow This added.

According to a Financial Times report, BP likely did not accept the Follow This resolution as it had previously said that third-party emissions are out of the control of energy companies. It said, however, that Royal Dutch Shell did agree late last year to set carbon emissions targets including those from customers.

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