Updated Sept. 18
My colleague Nicole Pinko sat through BP’s marathon eleven-hour infomercial to its shareholders this week to learn whether the company would–as promised–provide more specifics about its pledge to bring its carbon emissions down on a trajectory to net-zero by 2050.
Bottom line: On each of five key metrics UCS was tracking, BP failed to live up to the hype.
The company provided no plans to reduce absolute methane emissions, or to establish accountability, for example by linking executive remuneration to near-term emissions reductions on a path toward net-zero emissions. BP gave no further specifics on what climate policies it would support or on its willingness to stand apart from the American Petroleum Institute or other industry lobbying groups when they oppose limits on emissions.
BP did acknowledge that the company will not use offsets to meet its 2025 or 2030 emissions reductions goals. This appears to be an empty commitment, however, because BP also acknowledged that its total emissions will increase over the next 10 years.
Guilia Chierchia, BP’s Executive Vice President for Strategy and Sustainability, admitted that “[w]e do expect the absolute level of emissions associated with our marketed products to grow out to 2030…” Apparently any emissions reductions associated with the company’s plan to reduce its oil and gas production 40% by 2030 will be more than offset by increased emissions from the oil and gas that BP plans to purchase from other producers and bring to market. Absent any limits on what other companies produce, they will simply expand production to sell to BP. Thus, BP’s plan to reduce production by 2030 appears to provide absolutely no reduction in the company’s contribution to climate change.
Fool me once, BP, shame on you. Investors, the media and civil society should not get fooled again.
Original post from Sept. 11:
As big oil and gas companies feel the intensifying heat from shareholders, lawsuits and divestment campaigns to take responsibility for their outsized contributions to climate change, several European oil and gas giants including BP and Shell are making high-profile announcements of their intent to begin aligning their business models with core implications of climate science—that swift and deep reductions in emissions of carbon dioxide and other heat-trapping gases are needed to keep global temperature rise in check.
BP plans to unveil further details of the company’s climate strategy at a virtual investor meeting next Monday September 14th. The company’s history of false-starts on climate action and misleading clean energy advertising provides plenty of fodder for justified skepticism. So, how shall we assess their climate claims this time around?
In February, BP CEO Bernard Looney announced to great fanfare the company’s aims to bring carbon emissions from the oil and gas it produces and brings to market to net-zero by 2050 (with lesser ambitions for the oil and gas BP buys from other producers and then markets). In early August, Looney further pledged that by 2030, BP would cut its oil and gas production by 40% below 2019 (pre-pandemic) levels, increase its renewable electricity generation from ~2.5 gigawatts (GW) today to a whopping 50 GW and stop exploring for fossil fuels in new countries.
He also promised to provide more details in September.
“Today is about a vision, a direction of travel,” Looney said at the February roll-out “I appreciate you want to see more than a vision. We don’t have that for you today, but we will in September. The direction is set. We are heading to net zero. There is no turning back.”
BP’s ambitious pledge might sound…familiar. And well it should, because we’ve heard ambitious climate pledges from BP before. Back in 1997, when BP was known as British Petroleum, then CEO John Browne famously broke ranks with the climate-denying statements and actions by ExxonMobil and other fossil fuel companies, announcing in a speech at Stanford University that the company accepted climate science and its responsibility to address the problem:
“[W]e are all citizens of one world, and we must take shared responsibility for its future…[T]here is now an effective consensus among the world’s leading scientists and serious and well-informed people outside the scientific community that there is a discernible human influence on the climate and a link between the concentration of carbon dioxide and the increase in temperature .[I]t would be unwise and potentially dangerous to ignore the mounting concern.
We in BP… alone could not resolve the problem. But that does not mean we should do nothing. …We have a responsibility to act [and] BP accepts that responsibility…”
Under Browne’s leadership, the company rebranded as “Beyond Petroleum” and made a short-lived effort to expand its investments in renewable energy before returning to its roots as single-minded fossil energy giant paying lip-service to addressing climate change while pushing back on climate policy.
And—as this year’s 10th anniversary of the explosion on BP’s Deepwater Horizon drilling platform and ensuing massive oil spill in the Gulf of Mexico reminds us—also enabling a culture and practice of serious negligence on environmental health and safety.
Reading the fine print
Make no mistake, BP’s ambitious new climate claims justly deserve our attention. Slashing oil and gas production 40% by 2030 would be a big deal.
But too often, fossil fuel companies’ pledges of future climate action are met with unquestioning acceptance and unwarranted fulsome praise.
A recent piece in the Washington Post, for example, simply takes Bernard Looney at his February press-statement word that the “..oil giant BP Plc is planning to become a net-zero emissions company by 2050.” Bloomberg Green’s headline on BP’s February announcement breathlessly reads: “BP Sets Bold Agenda for Big Oil With Plan to Eliminate CO2”. (With more well-deserved skepticism, a Fortune article in August asked, “Is oil giant BP finally ready to ‘think outside the barrel’?)
Indeed, we need to see and read the fine print and work to hold companies accountable to live up to their claims.
Five Key Metrics
So how should investors, the media and civil society evaluate BP’s climate pledges this time around? Here are five things UCS will be looking for in BP’s promised specifics at next week’s investor meetings:
- Near-term Emissions Reductions: How do BP’s 2030 pledges translate into emissions reductions across its full supply chain? What actions, if any, is BP taking to reduce emissions from the Russian oil giant Rosneft, in which it owns a 20% stake? How does BP’s total emissions reductions compare with the ~45% below 2010 levels by 2030 that the Intergovernmental Panel on Climate Change says is needed to keep on a path consistent with the net-zero by 2050 target and keeping global temperature rise to 1.5 C?
- Limits on Offsets: Will BP acknowledge the need to set tight limits on and high quality independently verified standards for the use of any offsets to achieve its 2030 and 2050 emissions reductions goals? Will the company avoid unrealistic assumptions about the availability of carbon capture and storage (CCS) and prospective carbon dioxide removal technologies toward achieving net-zero goals?
- Accountability: What forms of accountability does BP propose it be held to for achieving its 2030 emissions reductions goals? Will, for example, executive remuneration be tied to specific and ambitious metrics of success? What would be the consequences for corporate leaders of failure to achieve these metrics?
- Beyond Carbon: Does BP acknowledge the need to make reductions for emissions from methane across its supply chain (not merely reductions in the intensity of methane emissions) and set specific and ambitious targets and timelines for methane emissions reductions?
- Climate Policy: Will BP consistently lobby for climate and energy policies to bring about deep emissions reductions across the industry and forcefully distance itself from actions to undermine strong policy by the American Petroleum Institute and other trade associations and lobbying groups?
I and my UCS colleagues will be closely watching BP’s presentations next week, asking questions, and evaluating what we learn so that we can separate rhetoric from reality.
The climate cannot afford further corporate PR, deception, and delay.