BP to tie executive pay to reducing greenhouse gas emissions
BP promises to significantly cut carbon emissions in accordance with the Paris Climate Agreement.
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.
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