BP turns over a green leaf to show what lies beneath it

24 April 2015

REUTERS

Greens: a golf course in La Quinta, California, pictured a fortnight ago. The state, now entering its fourth successive year of severe drought, has imposed mandatory cutbacks to urban water-use

Greens: a golf course in La Quinta, California, pictured a fortnight ago. The state, now entering its fourth successive year of severe drought...

A RESOLUTION passed by BP is an "unprecedented response" by an energy company to shareholders' concerns about climate change, the Church Commissioners' head of responsible investment, Edward Mason, said last week.

The resolution, "Strategic Resilience for 2035 and Beyond", passed by 98 per cent of voters at the company's AGM, means that from 2016 BP will have to report annually on a range of measures including emissions management, low-carbon energy research and development, executive incentivisation during the low-carbon transition, and public policy positions relating to climate change.

Mr Mason said that the resolution was prompted by engagement from the "Aiming for A" coalition of shareholders, which includes the Church's national investing bodies. Backed by BP's board, it was, he said, "an unprecedented response by an oil and gas major and its institutional investors.

"BP's commitment to increased disclosure on its climate-change strategy will set a new standard, and is a significant development in the relationship between institutional shareholders and the oil and gas industry on sustainability."

With funds worth £170 billion, the "Aiming for A" coalition was launched in 2012, as "a new investor initiative to engage on climate and carbon risk with the ten largest extractives and utilities companies in the FTSE 100".

The resolution won the support of some of BP's largest investors, including leading pension funds.

Catherine Howarth, chief executive at ShareAction, which seeks to increase shareholder activism on environmental, social, and governance issues, said that the AGM was "an important day for shareholder democracy".

The Church of England is facing calls to divest from fossil fuels altogether. The Ethical Investment Advisory Group will report to the General Synod in July on how the Church's investments will reflect concern for the environment.

Last month, the Bishop of Salisbury, the Rt Revd Nicholas Holtam, lead bishop on the environment, said that it was "important to engage with all the players in this, and fossil-fuel players are a very important part. To have an investment policy which engages with them, and helps them to get to a position where they begin to be part of the solution, is also going to be key to this."

The Vicar of St John's Waterloo, the Revd Giles Goddard, who sits on the Church's environmental working group, said on Monday that the resolution was "a positive step. But it does not commit BP to any reduction in emissions or to investing in renewable energy. Engagement with fossil-fuel companies is only good if it brings about a big reduction in carbon footprint. I await evidence that pressure from shareholders is leading to major change. Otherwise we should no longer be investing in this sector."

The Church of Sweden Bishops' pastoral letter on climate change - Letter

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