BP said it will support a shareholder resolution from the Climate Action 100+ initiative, a group of institutional investors who have called on the company to improve corporate reporting and transparency on risks related to climate change.
The group includes 300 investors, which together manage $32 trillion in assets. They include major public employee retirement funds Hermes EOS, Aviva Investors and Legal & General Investment Management.
"Investors are helping ensure climate change is firmly on the boardroom agenda, which is especially important for the oil and gas sector," Stephanie Pfeifer, a member of the global Climate Action 100+ steering committee and a former Deutsche Bank economist, said. "It's encouraging to see major companies such as BP moving in the right direction."
The resolution, to be put to shareholders in May at the annual general meeting, calls for BP to state how the company evaluates whether new capital expenditures, such as the development of oil and gas fields, are consistent with its pledge to reduce greenhouse gas emissions in line with the Paris climate accord.
The international agreement aims to limit global temperature increases by the end of the century to less than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels to minimize the impact of climate change.
"I want to make sure that our clients are invested in BP in 50 years' time," said David Patt of Legal & General Investment Management. "And to do that they have to adapt to a low-carbon economy." Climate Action said the information would help investors determine whether there is a conflict between BP's commitment to the Paris goals and its plans to increase oil and gas production. BP has started 19 major projects around the world in the past three years, including the $28 billion Shah Deniz 2 in the Caspian Sea.
BP also said that in the future, reductions in greenhouse gas emissions would be a factor in determining compensation for 36,000 employees, including senior managers. The company last year set a target of reducing the emissions from its projects by 3.5 million tons by 2025.
Rival Royal Dutch Shell made a similar commitment in December. BP Chairman Helge Lund said the company wants to solve "the dual challenge" of providing more energy with fewer emissions. "We believe our strategy is consistent with the Paris goals," Lund said in a statement. "The additional reporting specified in the resolution will build on BP's history of progressive action in this area."