BP has been urged by some of its largest shareholders to set out a business strategy that is aligned with the Paris climate accord, a leading investment group has confirmed.
Almost 10% of the oil major's investor base, including six of the UK's largest fund management groups, has backed a resolution filed by Climate Action 100+ at BP's AGM on 21 May intended to force it to up its efforts in tackling climate change.
Support for the resolution has been "truly unprecedented", said Stephanie Pfeifer, a member of the global Climate Action 100+ steering committee. The group said it was the largest ever show of support for a resolution on climate change.
The resolution requires BP to set out a business strategy, which it considers to be consistent with the goals of the Paris Agreement on climate change, the group said. BP's board has backed the resolution.
It demanded BP regularly reports its progress, including outlining how it evaluates the consistency of each new material capital investment with the goals of the Paris Agreement. It also asked for targets to promote greenhouse gas reductions, the estimated carbon intensity of energy products and the linkage of the company's targets with executive remuneration.
The largest energy companies have a key role to play in fighting climate change, said Sacha Sadan, director of corporate governance at Legal & General Investment Management, one of the signatories.
Steve Waygood, chief responsible investment officer at Aviva Investors, added: "BP's support for this resolution demonstrates how the investment industry can collaborate to instigate meaningful change.
"We hope that this first, but important, step represents a shift by the oil and gas sector in tackling today's climate emergency head on."
Other signatories include Hermes Investment Management, Royal London Asset Management, UBS Asset Management and M&G Investments.
Should the resolution pass, the responsibility will be on BP to provide additional corporate reporting for the year ending 2019 as directed by the resolution, Climate Action 100+ said.
Separately, Hermes said it would raise similar questions on climate change action of German carmakers Volkswagen and Daimler. Their AGMs are on 14 May and 22 May respectively.
"We encourage automotive companies to continue intensifying their efforts in preparing for a low-carbon world," said Dr Hans-Christoph Hirt, head of Hermes EOS.
"With pressure on auto manufacturers to adapt to this immediate threat to their business models, we would like to see them develop and clearly articulate their strategies for managing this transformational process.
"This requires setting short-, medium- and long-term targets to be aligned with the goals of the Paris Agreement, including for average fleet emission reductions, low-carbon vehicle sales and capital expenditure targets."
Hirt said that, through the Climate Action 100+ group, Hermes had constructively engaged with both companies on the issue, noting Volkswagen had taken a leading role in setting targets to become carbon neutral in its operations and products by 2050.
"It is thinking broadly about how it can encourage emissions reductions in its supply chain, as well as setting intermediate targets for electric vehicle sales and capital expenditure. We encourage other companies to follow this trajectory," he added.