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The BP logo is prominently displayed outside a petrol station that also provides electric vehicle charging stations, reflecting the company’s attempt to diversify in a changing energy landscape.

BP Faces Shareholder Dissent Amid Strategy Shift

BP, the oil and gas behemoth, is preparing for a potential confrontation with its shareholders during its annual general meeting (AGM) this Thursday, as a group of dissatisfied investors is expected to express their grievances concerning the company’s recent changes to its environmental strategy.

The AGM will feature a significant resolution pertaining to the reelection of Helge Lund, who is stepping down as chair. Shareholders may use this opportunity to voice concerns regarding climate policy, corporate governance, and the growing influence of Elliott Management, a prominent U.S. hedge fund.

In recent years, BP has struggled to find its footing compared to its more fossil-fuel-focused competitors, leading to what some have described as an identity crisis. In an effort to reestablish trust with investors and improve short-term financial performance, BP announced in February that it would decrease its investments in renewable energy while increasing its commitment to oil and gas operations.

This shift in strategy has been met with cautious approval from energy analysts, and CEO Murray Auchincloss has noted increased interest from potential buyers of BP’s non-core assets since the announcement.

Legal & General, a prominent asset management firm holding about a 1% stake in BP, has publicly stated its intention to oppose Lund’s reelection during the upcoming AGM. This stance diverges from BP’s management recommendations and stems from dissatisfaction regarding the substantial changes to the company’s energy strategy, coupled with the decision to bypass a shareholder vote concerning this new direction.

Legal & General’s position aligns with other notable investors, including the asset management group Robeco, U.K. pension funds such as Nest and Border to Coast, and activist shareholders like the Dutch organization Follow This, all of whom plan to vote against Lund’s return.

Conversely, Norway’s sovereign wealth fund and several U.S. pension funds are reportedly in favor of Lund’s reelection. Recommendations from proxy advisory firms including Institutional Shareholder Services and Glass Lewis also suggest voting for Lund, raising the stakes for the upcoming shareholder meeting.

This AGM is anticipated to be a crucial moment for BP, with analysts observing the level of dissent among shareholders—historically, opposition votes against the chair have remained below 10%.

Revisiting Energy Transition Goals

The renewed emphasis on traditional oil and gas operations comes at a time when BP is viewed as a possible acquisition target amid ongoing discussions of potential mergers with companies like Shell and U.S. giants Exxon Mobil and Chevron.

Legal & General’s investment team acknowledged the initiatives BP has taken in recent years towards climate commitments, emphasizing the importance of ongoing dialogue to harness long-term value amid the energy transition. However, significant changes to the company’s strategy announced during the 2025 Capital Markets Day have raised alarm bells, especially the lack of a shareholder vote on these amendments.

While BP’s announcement that Lund will likely depart next year has been greeted positively, concerns about succession planning have prompted continued opposition from Legal & General regarding the AGM resolution.

Five years prior, BP was one of the first energy majors to commit to achieving net-zero emissions by 2050 or earlier, accompanied by ambitious targets for reducing emissions by 40% by 2030 and increasing investments in renewable energy. However, these goals have since been revised downward to a 20% to 30% reduction as BP highlighted the necessity of sustaining oil and gas investments to meet current global demands.

Robeco expressed frustration at BP’s reluctance to allow a “Say on Climate” vote regarding these strategic revisions, citing insufficient mechanisms for consistent feedback from shareholders despite previous requests for such a process.

“Our growing concerns regarding the company’s transition resilience and the clarity of its climate governance approach compel us to oppose the chairman and the chair of the safety and sustainability committee,” stated Michiel van Esch, head of voting at Robeco.

Corporate Governance Issues

Elliott Management’s recently acquired near 5% stake in BP has led to speculation that the activist investor is advocating for a strategy focused more on oil and gas and less on low-carbon initiatives. Meanwhile, Follow This has maintained that the need to oppose Lund has not diminished due to his impending departure, urging investors to articulate their discontent through their votes.

“Voting against the board is the only mechanism shareholders have to express their disagreement over BP’s unilateral strategy shift without a vote,” asserted Mark van Baal, founder of Follow This.

As the AGM approaches, BP’s stock performance has shown a decline of nearly 10% year-to-date, reflecting investor sentiment amidst evolving energy sector dynamics.

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