Dive Brief:
- Activist investor Follow This told ESG Dive Friday it is discussing its legal options against oil giant BP for not distributing a shareholder proposal it submitted to the energy company under the United Kingdom’s Companies Act.
- The activist investor said in an emailed press release Wednesday that the U.K.-based oil company initially confirmed the resolution met the threshold for a valid submission, before changing its tune on March 7. BP then said the resolution didn’t align with the UK Companies Act and its articles of association, an assertion Follow This rejects.
- At issue is a shareholder resolution Follow This introduced in January — co-filed with a group of 16 investors with over 1 trillion euros ($1.15 trillion) in assets under management — requesting that the oil major disclose its “strategies for creating shareholder value under scenarios of declining oil and gas demand,” according to a January press release.
Dive Insight:
For Follow This, the resolution represented a shift in strategy from requesting companies set Paris aligned emissions reduction targets The group’s Founder Mark van Baal said in January’s release that the resolution was designed to “focus attention on the financial unsustainability of fossil fuel business models,” and BP’s shareholder dividends were cut 50% when oil demand fell in 2020.
Follow This said this is the sixth shareholder resolution it has filed with BP, with the previous five being put to a vote. The activist investor and oil major have also collaborated on a climate resolution ahead of BP’s 2021 annual general meeting.
The last Follow This proposal that BP shareholders voted on received just 17% of support in 2023. At the time, the board considered the proposal “unclear” and recommended shareholders vote against it.
“The board determined, having taken legal advice, that the proposed resolution did not conform to legal requirements,” BP told ESG Dive in emailed comments Friday. “Moreover, we have a clear strategy with multi-year targets to drive long-term shareholder value across the cycle and remain fully committed to responsible industry-standard climate related reporting.”
Van Baal and Follow This said the resolution “fully complies” with the UK Companies Act and BP’s articles of association. Van Baal said it had submitted a nearly identical proposal to fellow U.K.-based oil giant Shell, and Shell has confirmed its validity and plans to include it for voting at its annual general meeting in May.
“BP’s refusal to bring a resolution to a vote is an attack on shareholder rights,” Van Baal said in Wednesday’s release. “Omitting a resolution that the company confirmed as valid may constitute a breach of its obligations under the UK Companies Act. We are pursuing all avenues to defend the rights of shareholders.”
The proposal was co-filed by investors including the Sierra Club Foundation, the West Yorkshire Pension Fund and Swiss pension fund group the Ethos Foundation.
BP announced a strategy reset in 2025, increasing its investments in oil and gas, while reducing spending on renewables and clean energy. The U.K. oil major cut ties with its head of strategy and sustainability later in the year and terminated the position. Despite the shift, more than 60 active ESG funds are invested in BP, including from asset managers BlackRock, UBS and Legal & General, according to analysis from the Financial Times.
Follow This was previously sued by ExxonMobil in 2024 to block a climate-related shareholder proposal it co-filed with Arjuna Capital. The case against Follow This was eventually dismissed for lack of standing against the Netherlands-based investor.
