Yahoo Finance BP Shareholders Suggested to Oppose Follow This' Climate Plan
BP plc BP shareholders have been suggested by investor advisers — ISS and Glass Lewis — to oppose a climate plan submitted by the activist group, Follow This.
In December, Follow This filed resolutions with six major institutional investors managing assets worth $1.3 trillion.
Follow This expects BP and other energy companies to reduce absolute carbon emissions by 2030, in line with the Paris Agreement. These involve Scope 3 emissions, which account for the majority of emissions.
Per Glass Lewis, the Follow This resolution fails to recognize the serious uncertainty and difficulty in managing and measuring Scope 3 emissions. Glass Lewis believes that the company should be shown some degree of latitude regarding refining and specifying its targets.
BP has set an aggressive energy transition plan to capitalize on the mounting clean energy demand. In a decade, BP has set an ambitious goal of developing 50 gigawatts (GW) of net renewable energy generating capacity, representing a massive improvement from the 2.5 GW capacity that the company has developed so far.
BP was the first supermajor oil company to define what its energy transition would entail. Other oil majors followed with commitments of their own. In February, BP backed out on plans to reduce oil and gas production and associated emissions.
The proposal will represent a change in strategy from the board’s approach, a potential constraint on the board to develop and implement a strategy. In reaction to investors’ advices, Follow This believes that the decision is best for the company than the global economy.
Price Performance
Shares of BP have outperformed the industry in the past six months. The stock has gained 33.1% compared with the industry’s 14.8% growth.
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Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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