BP to tie executive pay to reducing greenhouse gas emissions

BP promises to significantly cut carbon emissions in accordance with the Paris Climate Agreement.

BP building after cutting greenhouse gases Source:Bloomberg

British Petroleum(BP) has vowed to to link executive pay to its reduction in carbon emissions. The move is a bold stance that shows how investors are driving energy companies are trying to be more socially responsible.

Why is BP disclosing its greenhouse gas emissions in reports?

BP has agreed to disclose its greenhouse gas emissions in company reports after approving a resolution from the Climate Action 100+ group, a collection of 300 shareholders. The socially conscious investors have $32 trillion in assets and have pressed the conglomerate to have a business strategy that works to lessen its carbon footprint.

The gas company has promised the group to reduce carbon emissions and be in line with the 2015 Paris Agreement to mitigate the effects of climate change. The corporation also pledged to link executive pay to how well the corporation has lessened greenhouse gases.

BP’s chief executive officer (CEO), Helge Lund, said that the disclosure would help the oil company meets its goals producing energy and stemming the increase in the global temperature.

‘BP is committed to helping solve the dual challenge of providing more energy with fewer emissions. We believe our strategy is consistent with the Paris goals,’ said Lund.

Bruce Duguid, head of stewardship at investment firm Hermes EOS, praised BP’s decision to disclose its carbon output.

‘This is good news for both investors and the planet. The decision by the BP board to support the resolution shows that this is a priority for the company and builds on progress to date, such as setting best in class methane intensity targets’, said Duguid.

Will the BP pledge reduce greenhouse gases?

While some environmentalists hailed BP’s decision to disclose its carbon emissions reports, Climate Action 100+ expressed scepticism about whether BP will honor its commitment.

‘Investors remain concerned that the company has not yet demonstrated that its strategy, which includes growth in oil and gas as well as pursuing low carbon businesses, is consistent with the Paris goals,’ said Climate Action 100+ in a statement.

It remains to be seen how a large oil company can act to reduce global warming. Climate Action 100+ and other socially conscious investors will monitor BP to make sure it’s part of the solution to reverse climate change.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

See an opportunity to trade?

Go long or short on more than 16,000 markets with IG.

Spread bet and trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Bid
Offer
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.