BP is preparing for its annual general meeting amid mounting pressure from shareholders and influential proxy advisers following the board's decision to block a climate resolution. The Local Authority Pension Fund Forum (LAPFF), a prominent U.K. pension fund body, has recommended its members vote against BP Chair Albert Manifold and other board-supported resolutions at the April 23 meeting, citing 'serious governance concerns' and BP's exclusion of a shareholder proposal from Dutch activist group Follow This, which sought greater transparency on BP's long-term strategy under scenarios of declining oil and gas demand [1].
Two major proxy advisers, Glass Lewis and ISS, along with Legal & General Investment Management, one of Europe's largest asset managers, have also advised shareholders to vote against BP's board. Glass Lewis and ISS rarely advocate for voting against a firm's board, underscoring the significance of the dissent [1]. LAPFF specifically urged opposition to the re-election of Manifold, the retirement of two climate reporting resolutions, and a resolution permitting virtual-only AGMs [1].
BP's board, after legal consultation, concluded that the Follow This proposal was not valid and would have been ineffective even if passed. BP Chair Manifold stated that the company intends to retire two climate-related resolutions, arguing that the requirements are now 'largely duplicative' of disclosures under other industry regulations and that the world has moved on since these resolutions were first passed in 2015 and 2019 [1].
Despite the governance controversy, BP shares have surged nearly 32% so far this year, outperforming many U.S. and European rivals. The company is currently pivoting back to its core oil and gas business and away from renewables, with Meg O'Neill, former Woodside Energy boss, recently appointed as CEO [1].
CONCLUSION
BP is facing significant shareholder and proxy adviser opposition ahead of its AGM due to governance and climate reporting concerns. Despite these challenges, BP's share price has performed strongly, reflecting investor confidence in its strategic pivot. The outcome of the AGM could have substantial implications for BP's governance and climate strategy moving forward.