Friday, April 15, 2016
BP board had a torrid time at their AGM with 59 per cent of shareholders rejecting the executive remuneration package and questions on climate change, and the new project in the Great Australian Bight that has been described as a carbon bomb.
Inside the AGM, BP were grilled by shareholders, including big institutional investors, about their reckless plans to drill in the Bight. Wilderness Society national campaign director Lyndon Schneiders and Catherine Howarth from partner organisation ShareAction were in the meeting and asked pointed questions about the Bight.
It was reported that members of the board appeared to distance themselves from the Bight proposal, pointing the finger at the Australian government for enticing oil companies to drill in the region. The CEO also remarked, quite rightly: "Gosh this investment in Australia is not very popular today."
Quite a number of key BP investors were genuinely horrified to hear of the company's plans in the Bight according to campaigners inside the meeting.
At the UN climate talks COP21 in Paris last December, the world re-affirmed its commitment to holding temperature rise well below 2 degrees C. Yet BP’s venture into the Great Australian Bight (GAB) would see it produce the equivalent of eight times Australia’s 2013 emissions from fossil fuels, and blow the country’s remaining budget to 2050.
For decades fossil fuel majors have been aware of the impacts of burning fossil fuels on climate change, but have chosen to pump their money into denialism and obfuscating the science. BP’s “base case” for fossil fuel demand assumes a devastating 4-6 Degrees C rise in average global temperatures.
Despite the Macondo Deepwater Horizon disaster in the Gulf of Mexico in 2010, BP continues to search for new reserves in deeper, riskier locations such as the Great Australian Bight. A spill in this pristine marine environment would cost dearly South Australia’s fishing and tourism industries over $1 billion, and decimate its rich marine ecosystem. Impacts of an oil spill would possibly be felt on the Western Australian, Victorian and Tasmanian coastal environments.
“BP has no right to risk the Great Australian Bight. It is an environmentally pristine area, a haven to a plethora of rare species, and given its remote location and dangerous weather patterns, is an extremely risky location for deep-water oil drilling. The project is facing investigation by the Australian Senate, but the company has disclosed neither its Environmental Plan nor the reasons for its rejection by the authorities. Investors in BP should be aware of the significant international opposition to this proposal, as well as the multiple financial risks.” - Director of Campaigns at The Wilderness Society, Lyndon Schneiders.
Current BP extraction plans amount to a scenario of 4 to 6 degrees C of warming this century.
The science is pretty clear. McGlade and Ekins (2015) revealed that we cannot afford to exploit marginal and unconventional fossil fuels and remain under the 2 degrees C goal as agreed to in Paris.
“Adding additional oil reserves to the world’s energy system, as proposed by BP, is inconsistent with the global temperature and the emission limits the Australian Government agreed to in Paris last year. Endeavours to add more oil to the system are therefore clearly at odds with the commitment Australia is making globally to meet its climate targets, and ultimately mean the oil will become a stranded asset.” - CEO of Climate Analytics, Bill Hare.
Climate Analytics published an assessment of deep sea drilling in the Great Australian Bight and highlighted it's strong inconsistency with the Paris Agreement temperature goals.
At the AGM Nearly 60% of shareholders voted against a massive executive pay rise. This was the 5th ever largest vote against a remuneration package in the UK. A 20 per cent pay rise just doesn't seem justifiable when there have been massive losses and massive job cuts. Even the Institute of Directors was concerned that the remineration package was a reward for failure. “It is rare that the IoD intervenes on the subject of an individual chief executive’s pay. We are concerned, however, that Mr Dudley’s £14m pay package will seem unjustified to many shareholders, considering the performance of the company over the past 12 months,” said Simon Walker, the director general of the IoD.
Share Action's Catherine Howard was tweeting from the AGM, but it seems there is a 'no mobiles' policy, even though AGM is being streamed live. She tweeted "Now inside #BPagm. Justifying Dudley's pay-rise Chair tells us 'it has been an outstanding year'. Really?! #RealityCheck" and also "Authoritarian policy at #BPAGM banning mobiles. I was identified early as a serial offender in wishing to use my phone and watched closely."
“By pressing ahead with exploration in the Great Australian Bight, the company appears tone deaf to the shift in investor sentiment on climate risk following the Paris agreement. Investors in BP overwhelmingly voted last year in favour of smarter environmental risk management within its corporate strategy. These plans to drill for oil in the Bight raise a big red flag for investors who are already demanding answers about how BP can justify the project.” - Chief Executive of ShareAction, Catherine Howarth.
Environmental activists from the Wilderness Society and Sea Shepherd maintained a protest outside the AGM, talking and interacting with investors and shareholders as they entered. Activists held a mock oil spill outside the Melbourne offices of BP on Thursday morning, before the AGM in London started.
See the storify: BP questioned on Pay, #climatechange and Bight project at #BPAGM London