Nearly a quarter of BP’s shareholders voted against the reappointment of its chair today, in a major blow to the company.

Helge Lund’s re-election split shareholders at BP’s annual meeting in London, with preliminary results showing 24% of investors either voted against it, or abstained.

There are multiple drivers for the dip, one of which is frustration at BP’s recent decision to backtrack on its climate commitments without shareholder permission.

In 2020, the firm announced plans to slash oil and gas production by 40% by 2030, and invest heavily in renewables. The strategy was heavily endorsed by BP’s investors in a ‘say on climate’ vote.

Three years later, it revised down those ambitions without returning to shareholders for approval.

In protest, nearly 10% of the oil major’s investors voted against Lund in 2023, but support rebounded last year at around 98%.

Last month, BP said it would increase its oil production to around 2.5 million barrels a day by the end of the decade, flying in the face of its 2020 climate plan.

“The 10% that weren’t happy in 2023 aren’t happy this year, but it’s unclear whether any other investors have joined them,” said Lindsey Stewart, director of stewardship at proxy advisor Morningstar.

Some of those investors have sold their shares in BP in the meantime, meaning they won’t be included in this year’s figures.

Elliott Investors a new factor

But BP also has a major activist on its share register now, which will have influenced today’s vote.

Elliott Investors is understood to hold around 5% of the company’s shares, and has reportedly been pushing it to maximise short-term returns, in part by doubling down on fossil fuels and abandoning green energy.

“So there will be dissent for other reasons, including some shareholders who will think the new strategy doesn’t tilt back towards fossil fuels enough,” observed Stewart, adding that “making sense of the result relies on shareholders communicating the reasons for their decision”.

Legal & General, which is understood to own around 1% of BP, pre-declared its intention to vote against Lund on climate grounds.

“We are deeply concerned by the recent substantive revisions made to the company’s strategy […] coupled with the decision not to allow a shareholder vote on the newly-amended climate transition strategy,” it said in a recent statement.

Likewise, UK pension fund Border to Coast Pensions Partnership voted against Lund over its “weakened” climate transition strategy, which no longer has a “shareholder mandate”.

It also voted against Amanda Blanc, the chief executive officer of Aviva, who sits on BP’s nominations committee, as well as the chairs of the sustainability and remuneration committees.

Lund had already announced his plan to step down from his role as chair next year, but insiders say the scale of opposition to his re-appointment may accelerate his departure.

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