BP is expected to scrap many of its environmental promises, slash spending on renewable energy and refocus on fossil fuel production at a landmark strategy summit on Wednesday.
The oil and gas giant is to announce its new strategy at a meeting in London this afternoon, after coming under pressure from some shareholders over falling profits and a share price that has lagged behind rival Shell.
In 2020, BP won the praise of environmental groups after launching some of the most ambitious green targets among the fossil fuel giants.
Those included cutting oil and gas production by 40% by 2030, and becoming a net zero emissions company by 2050, under plans announced by its previous boss, Bernard Looney.
Now, after its share price has lagged behind rivals including Shell, it is coming under fire from the same environmental groups amid widespread fears that it will go back on those pledges.
BP has a new chief executive after Mr Looney quit in 2023, and his replacement, Canadian Murray Auchincloss, said earlier in February that he would carry out a “fundamental reset” of BP’s strategy.
It comes after the influential US hedge fund Elliott Management took a nearly £4 billion stake in the company – just under 5% of its shares.
The hedge fund is understood to be pushing BP towards more oil and gas investment.
BP made about £7.2 billion last year, down a third on the year before, after oil and gas prices fell from the highs seen in the wake of Russia’s invasion of Ukraine.
Shell has already rolled back some of its renewable energy investment plans.
US President Donald Trump’s promises to “drill baby drill” have encouraged the oil and gas giants to focus more on fossil fuels.
But not all of BP’s investors want it to put profit before cutting emissions.
Nearly 50 major investors in the firm called on bosses to let them vote on potential plans to scrap its climate goals recently.
The group of investors, which includes Scottish Widows, Hargreaves Lansdown Fund Managers and Royal London Asset Management arm, wrote to BP last week to say they expect a say on any plans.
A spokesperson for Royal London Asset Management said it is “concerned about the company’s continued investment in fossil fuel expansion”.
“Despite industry commitments, emissions from oil and gas companies are still rising, and we need to see tangible progress in aligning capital expenditure with credible low-carbon scenarios.”
Charlie Kronick, senior climate adviser for Greenpeace UK, said: “BP can expect this kind of pushback and challenge at every turn if it doubles down on fossil fuels – not just from green campaigners but from its own shareholders.
“Government policies will also need to prioritise renewable power, and as extreme weather puts pressure on insurance models – policymakers will be looking to fossil fuel profits as a way to fund extreme weather recovery.
“BP might want to seriously put the brakes on this U-turn.”
The strategy update will take place at BP’s head office in London, with Mr Auchincloss expected to start speaking at 1pm.
James Alexander, chief executive of the UK Sustainable Investment and Finance Association, said a rollback of green promises should “sound alarm bells for investors and UK policy makers alike”.
He added: “Expansion of BP’s oil and gas extraction activities is misaligned with long term global energy projections and at odds with the decarbonisation trajectory needed to limit global warming to 1.5C.
“This shift must raise serious questions over whether decisions are being made in the interests of the long-term viability of the company and whether it exposes investors to growing risks from stranded oil and gas assets.”
BP declined to comment.
This article was written by Alex Daniel from The Independent and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.