Back to fossils:after Shell and Total, BP also abandons climate objectives

Major oil companies abandon their goal of reducing oil and gas production.The latest announcement in this sense comes from BP.

After TotalEnergies and Shell, BP has also revised its climate objectives.As reported by the news agency Reuters, the British company has abandoned its oil and gas production reduction target for 2030, scaling back its strategy of energy transition with the aim of "regaining investor confidence" and "closing the valuation gap with competitors".In 2020, BP announced ambitious plans, pledging to reduce oil and gas production by 40 percent by 2030, focusing on renewable energy.However, the 2022 energy crisis and the war in Ukraine led to a change in strategy:in February 2023, BP had already reduced its fossil fuel reduction target to 25 percent, which may now be completely abandoned.

BP allocates less than 9% of its investments to renewables

According to Agathe Masson, campaign manager of the NGO Reclaim Finance, "if BP chooses to prioritize profits at the expense of the planet, investors must intervene to stop this strategy destructive and adopt a long-term vision."Masson urges investors to sanction the company's executives by voting against the re-election of directors and refusing to fund further projects until the company's strategy aligns with climate science.

Confirming this trend, an analysis by Reclaim Finance shows that, despite promises of energy transition, BP allocated $14.6 billion to oil and gas exploration and production in 2023, compared to just $1.3 billion for the low-carbon energy sector.Between 2024 and 2030, BP plans to invest $9.3 billion a year in fossil fuels, a figure above twice higher than that announced for the clean energy sector.

BP, moreover, is accelerating its investments in the Middle East and in the Gulf of Mexico to increase oil and gas production.At the same time, it sold its onshore wind farms in the United States, withdrawing from the renewable energy market.This strategy has attracted applause from some investors like Bluebell Capital, which a year ago urged BP to abandon its commitments to reduce fossil fuel production to maximize shareholder value.However, not all investors agree:in 2023, 17 percent of shareholders supported a resolution put forward by Follow This, calling for the company to align with the goals of the Paris Agreement.

But British Petroleum is not alone

BP's about-face is not the only one in the Big Oil field.Also TotalEnergies recently announced an increase in hydrocarbon production by 3 percent per year by 2030, exceeding previous forecasts.According to Reclaim Finance again, “TotalEnergies is light years away from a true transition strategy and continues to focus on increasing oil and gas production, despite the alarms of the scientific community."

Also Shell has scaled back its climate commitments, abandoning the goal of reducing emissions by 45 percent by 2035.The company has also sold assets related to renewable energy, including offshore wind, biofuels and hydrogen projects.This strategy met with opposition from some shareholders, with 19 percent saying voted for closer alignment with the goals of the Paris Agreement during the last general assembly.

These signs are alarming.According to Carbon Tracker report, published in March, European oil companies, despite being relatively less hostile to the transition than their global competitors, are not aligned with the 1.5°C scenario.Compliance with the commitments of the Paris Agreement requires a drastic reduction in the production of fossil fuels and, to date, no major oil company appears to be on the right track.On the contrary, disengagement from climate goals is further worsening the crisis.