Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  BP plc    BP.   GB0007980591


News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Exclusive: After BP takes a hit, investors widen climate change campaign

share with twitter share with LinkedIn share with facebook
06/22/2020 | 04:56am EDT
FILE PHOTO: Landell-Mills, head of stewardship at Sarasin & Partners, poses for a photograph at their office in London

By Matthew Green and Simon Jessop

Investors managing £1.8 trillion ($2.2 trillion) in assets are widening a campaign pressing oil majors to better reflect climate risks in their accounting, and will soon target other businesses with heavy fossil fuel exposure, the group said on Monday.

The investors believe their campaign is working, noting the "hugely important" news of BP joining other oil majors in lowering the value of its assets amid a global transition to cleaner energy, said Natasha Landell-Mills, head of stewardship at asset manager Sarasin & Partners.

"The question all company directors and their shareholders now need urgently answered is, 'Where else might company positions be overstated?'" the group of more than 20 leading funds said in a joint statement seen by Reuters.

BP declined to comment on the campaign.

The investor group can't be certain whether its efforts played into BP's decision to reduce the value of its assets by up to $17.5 billion, announced on June 15.

But they have already begun lobbying building materials company CRH and plan to write to Anglo-Australian miner Rio Tinto, which supplies the steel industry. Along with cement, steel is a major source of greenhouse gases.

"We will be rolling out similar engagements with other fossil fuel-dependent companies," Landell-Mills, who is coordinating the campaign, told Reuters in an interview.

The investors were also planning to include European and U.S. banks financing fossil fuel projects, Landell-Mills added.

Rio Tinto and CRH declined to comment.

Early last year, the investors began lobbying the Big Four accounting firms - EY, Deloitte, PwC and KPMG - to do more to ensure climate-related risks are adequately reflected in company financial statements they audit. The campaign is one of a number of efforts by investors to push companies on environmental policies, amid concerns many businesses are both contributing to the planet's warming while also failing to take full stock of the risks they face.

Major fund managers including BlackRock have issued increasingly strident public statements about climate change, while other investors have threatened to pull money out of Brazil unless Amazon deforestation is curbed.

The campaign led by Sarasin & Partners emphasizes the legal duty companies have to ensure their financial statements fully reflect how government moves to ratchet up climate action and the falling costs of renewable energy are likely to affect future profitability.

"It's a very serious thing from their perspective," said Landell-Mills. "This is a matter of ensuring there is no misrepresentation going on." Accounting for potential future losses can weaken a company's balance sheet, making it harder to finance new investment in carbon-intensive activities such as oil exploration, the investors argue. The coalition includes Sarasin & Partners, M&G Investments, Jupiter Asset Management, NN Investment Partners and pension funds such as the Brunel Pension Partnership and Denmark's PKA.


Although it was difficult to independently assess the impact of the campaign, Landell-Mills pointed to a series of moves that align with the investors' demands in letters https://sarasinandpartners.com/stewardship-post/paris-aligned-accounting-is-vital-to-deliver-climate-promises sent to BP, Anglo-Dutch major Shell and France's Total in November. In the letters, seen by Reuters, the investors questioned whether the companies' oil price assumptions, which form the bedrock of their accounts, were aligned with the 2015 Paris climate accord, which implies sharp cuts in fossil fuel use.

Before BP's writedown, the group's letter to the British oil major said: "We have concerns that, at present, BP's accounts may be overlooking material climate considerations, and consequently potentially overstating both performance and capital." The same language was used with Shell and Total. Total did not immediately respond to a request for a comment. Shell said it had "comprehensively responded" to similar demands by the investor group, and included climate risks in its accounts. "Since that time, Shell has also published an ambition to be a net zero energy company by 2050, or sooner," Shell said in an email to Reuters on Sunday.

Last week, BP cut its benchmark Brent oil price forecasts to an average of $55 a barrel until 2050, from $70, saying it expects a collapse in oil demand during the coronavirus pandemic to accelerate a low-carbon transition. BP also said it would have to review some plans for early stage oil and gas exploration projects.

Meanwhile, Shell also lowered its long-term Brent crude expectations to $60 a barrel, from the 2018 price of $70, in its 2019 annual report published in March. Total also reduced its price assumptions at about the same time.

While majors often adjust price assumptions, the investors noted that Shell's auditor's report contained substantially more references to climate risks than the previous year.

"It's tip of the iceberg," Landell-Mills said. "And investors will have to understand that they (oil majors) are not going to be able to pay dividends like they did before."

(Reporting by Matthew Green Simon Jessop; Additional reporting by Zandi Shabalala in London; Editing by Katy Daigle and Lincoln Feast)

Stocks mentioned in the article
ChangeLast1st jan.
BP PLC 1.70% 301.85 Delayed Quote.-37.10%
RIO TINTO GROUP 1.89% 99.84 End-of-day quote.-0.56%
RIO TINTO PLC -0.09% 4752.5 Delayed Quote.5.71%
TOTAL S.A. 0.42% 33.845 Real-time Quote.-31.48%
share with twitter share with LinkedIn share with facebook
Latest news on BP PLC
05:34aAustralia's Woodside to take $4.37 billion loss from coronavirus
04:03aAustralia's Woodside to take $4.37 bln loss from coronavirus
03:30aWoodside Expects US$3.92 Billion Impairment of Assets -- Update
02:59aAker BP beats Q2 expectations on record output, keeps guidance
02:56aAustralia's Woodside expects $4.37 bln loss after asset write-down
07/13Brazil's aviation gasoline market disrupted amid quality concerns
07/10BP : Reliance and bp launch 'Jio-bp' partnership
07/09EUROPE : European stocks slide as Wall Street hit by virus surge
07/09UK stocks mark worst day in two weeks on energy losses, virus fears
07/09BP pays India's Reliance $1 billion to set up petrol station venture
More news
Financials (USD)
Sales 2020 180 B - -
Net income 2020 -7 713 M - -
Net Debt 2020 48 828 M - -
P/E ratio 2020 -7,95x
Yield 2020 9,80%
Capitalization 74 940 M 75 313 M -
EV / Sales 2019
EV / Sales 2020 0,69x
Nbr of Employees 67 600
Free-Float 93,1%
Chart BP PLC
Duration : Period :
BP plc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BP PLC
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 4,69 $
Last Close Price 3,72 $
Spread / Highest target 80,0%
Spread / Average Target 26,1%
Spread / Lowest Target -28,3%
EPS Revisions
Bernard Looney Chief Executive Officer & Director
Helge Lund Chairman
Andy Hopwood COO & Executive VP-Upstream Strategy
Murray Auchincloss Chief Financial Officer
Angela Rosemary Emily Strank Chief Scientist & Head-Downstream Technology
Sector and Competitors
1st jan.Capitalization (M$)
BP PLC-37.10%75 313
PTT-14.77%34 153
NESTE OYJ16.54%31 546