Historic Shareholder Uprising at BP's 2025 Annual General Meeting
BP faced a significant setback at its Annual General Meeting (AGM) in 2024, as 24% of investors voted against the reappointment of Helge Lund as chair. This vote, despite Lund's previously announced departure, reflects shareholder dissatisfaction with BP's leadership and climate strategy.
Key reasons behind the vote include perceived leadership shortfalls, climate strategy concerns, and a broader push for governance change. Activist investors and shareholders view Lund's leadership as insufficiently proactive in addressing BP’s evolving strategic needs, particularly in pivoting from traditional hydrocarbons to cleaner energy sources. Campaigns by activist groups such as Follow This have critiqued BP’s climate policies as inadequate or too slow.
Elliott Management, a US hedge fund that recently acquired a 5% stake in BP, has engaged with major investors like BlackRock and Vanguard to reshape BP’s board, arguing the need for a leadership overhaul to accelerate strategic shifts and improve governance in line with long-term value and climate objectives.
The 24% opposition underscores a growing shareholder demand that BP's board and management demonstrate stronger commitment and clearer, faster action toward climate goals. It highlights a wider industry challenge where investors increasingly link corporate leadership and governance with the credibility and execution of climate strategies.
BP's strategy reset, announced in February this year, has been met with criticism. The company announced a "complete reset", scaling up fossil fuel extraction and backtracking on investment in renewables, which has undermined investor confidence and trust. Major investors including Robeco, Rathbones, Legal & General, and Nest had requested a vote on the updated strategy, but BP opted not to include the issue on the AGM agenda.
Colin Baines, stewardship lead at Border to Coast, stated that the 24% opposition was "significant," highlighting shareholder dissatisfaction with BP’s strategy reset and governance. Border to Coast took the unprecedented step of voting against BP on a raft of measures, including against the re-election of the Chair, due to an inadequate transition plan and BP’s failure to seek a shareholder mandate for the change in strategy.
BP's share price has declined five years after introducing one of the most ambitious decarbonisation strategies among major oil and gas companies. Mark van Baal, founder of the campaign group Follow This, argued that the high vote against BP’s chair sends a signal the firm cannot afford to ignore, representing almost five times more shareholders than Elliott’s alleged 5% stake in BP.
This is the first time in ten years that more than 10% of shareholders have opposed the reappointment of an energy firm chair. The result of the vote highlights growing division within BP’s shareholder base, with some investors favouring the shift towards fossil fuels and others expressing concern over decarbonisation targets.
BP's AGM was held against the backdrop of a significant strategic overhaul for the company. The company must now address shareholder concerns and demonstrate a clear, urgent commitment to its transition towards renewable energy and meeting its climate commitments. Soobiah urged BP to ensure its next chair has the skills, experience, and long-term perspective needed to guide the company through the energy transition and rebuild trust with all shareholders.
- Activist investors, such as Elliott Management, believe that the current leadership at BP, notably Helge Lund, is insufficiently proactive in addressing the company's evolving strategic needs, particularly in transitioning from traditional hydrocarbons to cleaner energy sources.
- The call for a leadership overhaul by Elliott Management comes as BP faces criticism for its climate strategy, with some investors viewing its policies as inadequate or too slow, as demonstrated by the 24% vote against Lund's reappointment.
- In the realm of environmental science, investors are increasingly linking corporate leadership and governance with the credibility and execution of climate strategies, which has been exemplified by the recent vote against BP's chair.
- As BP looks to address the concerns of its investors and maintain shareholder trust, its future strategies should focus on renewable energy and meeting climate commitments, as highlighted by the growing shareholder demand for a stronger commitment and faster action towards climate goals.
