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The Border to Coast asset pool will vote against the re-election of Helge Lund, the outgoing chair of BP, as well as three more board members, at the oil and gas major’s annual general meeting on Thursday. It will also decline to approve the annual and remuneration reports.
The Local Government Pension Scheme pool cited the firm’s recent backtracking on its 2022 climate commitments. Border to Coast, which manages about £52bn for 11 pension funds, is now calling on BP to publish a transition plan that details how the company will achieve its 2050 net zero target post-2030, putting this to a vote at the 2026 AGM.
“We believe that long term value in BP is dependent upon a quality transition plan that aligns with pathways to net zero,” said Colin Baines, stewardship manager at Border to Coast. “Following the strategy reset, we find BP’s net zero targets and decarbonisation plans are simply not adequate.”
BP said last month that Lund is resigning “most likely during 2026” and that it has started searching for a new chair. Baines called this “a key development”, noting that Border to Coast has been leading calls for a vote against his re-election at the upcoming AGM. Some media reports cite a campaign by activist hedge fund Elliott Management, which is pushing for divestments and cost cuts, for Lund’s decision to step down.
Baines said: “We continue to be deeply concerned over the direction of BP and its backtracking on climate commitments, its failure to seek a new mandate from shareholders who approved its transition plan in 2022, and previous assurances we received from the chair that the board owned the strategy and that it would not change with a new CEO.”
He added: “We are taking the unprecedented step of voting against BP on a raft of measures at its upcoming AGM due to its failure to put its strategy reset to a shareholder vote.”
In addition to voting against the re-election of Lund, the pool will also vote against board directors Melody Meyer, who chairs the sustainability committee, Tushar Morzaria, interim chair of the remuneration committee, and Dame Amanda Blanc, a member of the nomination committee.
“This reflects our concern regarding the governance role of these committees in BP’s strategy reset, including the removal of transition measures from remuneration policy and the terms on which a new CEO was appointed,” the pool stated.
Border to Coast has a policy of voting against the chair of the board of oil and gas companies which fail to fully meet the first five indicators of the Climate Action 100+ net zero benchmark, which includes short, medium and long-term emission reduction targets, and a decarbonisation strategy.
It will also vote against the chair if the company is scored 3 or lower by the Transition Pathway Initiative, meaning the company has not yet developed a strategic understanding of climate risks and opportunities or integrated this into business strategy and capital expenditure decisions.
Another voting policy is a presumption to support shareholder proposals that are aligned with the goals of the Paris climate agreement, taking a ‘comply or explain’ approach.
Shareholder resolutions on their own tend to have limited impact. A resolution of no confidence in Shell’s chair in 2023, supported by the Church of England’s pension and endowment funds among others, was not carried, with just under 7% voting against his reappointment. At the same AGM, a special resolution by campaign group Follow This to make Shell adopt tougher climate goals also failed to garner a majority, though its support was notable – a fifth of shareholders voted in favour, including large pension funds.
While US investors can now face reprisals for taking a stance on environmental matters, a group of mainly UK-based pension funds have signed an Asset Owner Statement on Climate Stewardship to set out their expectations, and some have started taking a tougher stance on climate. Master trust the People’s Pension revealed in February that it is moving £28bn from State Street Global Advisors to Amundi and Invesco Asset Management, after introducing a policy to require managers to be net-zero aligned and have adequate stewardship resources. In 2023, the Church of England Pensions Board committed to divest from the oil and gas sector entirely, joining a handful of other investors who have done so.
