I was not at the BP shareholders meeting yesterday, but I needn’t have been, it was full of financial journalists, pension investors and pensioners, all furious at BP’s failure to be reasonable. Here’s a pensioner.
I expect to hear much more from pensioners who were at the meeting as shareholder activists. We hear a lot about governance in theory but this is action in search of good governance.
Reuters and the FT were clear what was happening in the shareholder meeting.
I’m in an LGIM fossil fuel fund that doesn’t invest in BP but that doesn’t make it irrelevant that my main fund manager were involved – thanks LGIM
Legal & General Investment Management, a top 10 shareholder with a holding of about 1.5 per cent, also said it would vote against him, citing concerns that he was reducing the company’s transparency and making it harder to understand how BP would manage risks in the energy transition.
What were the resolutions that BP’s executive lost against their shareholders?
BP was handed a heavy defeat by its shareholders over its attempt to reduce its reporting requirements on climate issues, as investors also mounted a rebellion against new chair Albert Manifold.
Two special resolutions put forward at the UK oil major’s annual meeting on Thursday only gained the support of 47 per cent of voting investors, far below the 75 per cent threshold required for the proposals to pass.
BP had asked for permission to revoke two previous shareholder resolutions from 2015 and 2019 that required the energy group to release climate-related data, which the company said had been made redundant thanks to mandatory climate disclosures.
It also put forward a resolution to be allowed to hold electronic-only general meetings, which it said would allow more of its shareholders outside the UK to take part.
The meeting had already sparked controversy after BP excluded a shareholder resolution filed by Dutch activist investor Follow This and a group of pension funds, asking the energy group to set out strategies for maintaining shareholder value if oil and gas demand declines.
Manifold, 63, who became chair last October, said the resolution had not been submitted correctly. “There is no question of anybody blocking anything. If you don’t submit a resolution in compliance with the rules, we are legally bound not to accept it. There are rules we all live life by,” he said.
Reading inside and outside the room?
There seems to have been general resentment from shareholders. I have reported separately about resentment from employees and former employees being denied pensions that had been promised to them and for which there is money in the pension scheme.
It doesn’t end here.
Mark van Baal, chief executive of Follow This, said the defeat over BP’s climate reporting resolution signalled that
“shareholders refuse to let BP quietly bury its reporting commitments”.
The group is continuing with legal action over BP’s decision to exclude its own proposal. More than a quarter of shareholders also backed a shareholder resolution calling on BP to justify its capital expenditure on upstream oil and gas, which was filed by the Australasian Centre for Corporate Responsibility and a group of other investors.
Under UK corporate governance norms, BP will have to consult its shareholders on the issue and report back.
That last point made by the FT made me proud. I was proud that BP is listed on the UK stock market. This gives me hope that BP will eventually be responsible to all stakeholders. That means pension funds (as shareholders) and those who get deferred pay from the BP pension scheme
