Investors are calling on oil giant BP to make performance on tackling climate change a key element in its bonus structure amid increasing concerns about companies’ response to the climate crisis.
The bonuses of around 36,000 staff are already linked to plans for reducing emissions, but investors are now calling for more rigorous targets, potentially around so-called “scope three” emissions.
These emissions, which are those produced by BP’s customers, accounted for nearly 90 per cent of BP’s total 491m tons of greenhouse gas emissions in 2018.
The call comes after last year’s decision by BP to support calls from investors to lay out how its strategy aligns with the targets of 2015’s Paris Agreement.
Bruce Duguid, head of stewardship at Hermes Investment, which was part of last year’s initiative, said: “We have given BP freedom to determine what its strategy is but I think now is the opportunity to set out a bold vision for the future of how BP can be a serious contributor to building a net zero carbon economy.”
The calls come as Bob Dudley’s decade-long tenure as chief executive of the oil giant ends this week, with Bernard Looney set to take over on Wednesday.
Looney’s first task will be handling investor disappointment, with BP widely expected to forecast a 25 per cent drop in full year profits when it announces its full year results on Tuesday.
The Irishman takes over at a time of soul-searching for the oil industry, with the combination of a surplus of supply weighing on prices and increased pressure from environmental groups squeezing profits.
BP is one of the world’s biggest oil firm’s, producing 3.7m barrels a day from nearly 80 countries around the world.
Lately the firm has investing in alternative forms of energy, such as EV chargepoints and solar energy company Lightsource.