Oil giant faces shareholder revolt over green strategy U-turn

Oil giant BP is bracing itself for a shareholder backlash at its annual general meeting (AGM) on Thursday, with a chorus of disgruntled investors planning to voice their concerns over the firm’s green strategy U-turn.

A planned resolution on the reelection of outgoing BP Chair Helge Lund has been billed as an opportunity for investors to signal discontent on climate change, corporate governance and the influence of U.S. hedge fund Elliott Management.

Britain’s beleaguered energy major, which has lagged behind more hydrocarbon-focused industry peers in recent years, has sought to resolve something of an identity crisis by launching a fundamental reset.

Seeking to rebuild investor confidence and boost near-term shareholder returns, BP in February pledged to slash renewable spending and ramp up annual expenditure on its core business of oil and gas.

The strategy reset was broadly welcomed by energy analysts, and BP CEO Murray Auchincloss has since said the pivot attracted “significant interest” in the firm’s non-core assets.

British asset manager Legal & General, a leading shareholder in BP with a roughly 1% stake, said it intends to vote against Lund’s reelection on Thursday — a position that would defy BP’s management recommendation.

Legal & General cited dissatisfaction over major revisions to the firm’s energy strategy, alongside BP’s decision not to allow a shareholder vote on the new direction.

Legal & General’s plans align with those of international asset manager Robeco, U.K. pension funds Nest and Border to Coast, as well as activist investors including Dutch group Follow This — all of which have indicated they will vote against Lund’s reelection.

Norway’s gigantic sovereign wealth fund and a number of U.S. pensions funds, however, have reportedly said they will back Lund’s reelection. Proxy advisors Institutional Shareholder Services and Glass Lewis have also recommended a vote in favor of Lund, according to Reuters.

It paves the way for a shareholder showdown at BP’s AGM, with observers closely monitoring the level of investor opposition to Lund’s reelection. Historically, votes against the chair of BP have remained under 10%.

A BP spokesperson declined to comment when contacted by CNBC.

BP’s renewed focus on oil and gas comes at a time when the London-listed energy firm is firmly in the spotlight as a potential takeover target. British rival Shell and U.S. oil giants Exxon Mobil and Chevron have all been touted as possible suitors.

“We value the significant steps BP has taken in recent years regarding its climate-related commitments and efforts, which we have supported through extensive and constructive dialogues, aimed at creating long-term value as the climate transition unfolds,” Legal & General’s investment stewardship team said on April 11.

“However, we are deeply concerned by the recent substantive revisions made to the company’s strategy as announced at the 2025 Capital Markets Day on 26 February, coupled with the decision not to allow a shareholder vote on the newly amended climate transition strategy at the 2025 AGM,” they added.

Legal & General said BP’s announcement earlier this month that Lund will step down, likely next year, was viewed “positively,” but ongoing unease about the firm’s succession plan means it intends to vote against the AGM resolution.

Five years ago, BP became one of the first energy giants to announce plans to cut emissions to net zero “by 2050 or sooner.” As part of that push, BP pledged to slash emissions by up to 40% by 2030 and to ramp up investment in renewables projects.

The company scaled back this emissions target to 20% to 30% in February 2023, saying at the time that it needed to keep investing in oil and gas to meet global demand.

Robeco said in its rationale that BP had refused to repeat a so-called “Say on Climate” vote for its strategy revision, despite previously requesting shareholder support for the firm’s previous and “more ambitious” transition goals.

“We have unsuccessfully requested such a consistent feedback mechanism several times, including in a public letter alongside other investors with GBP 5 trillion in assets under management,” said Michiel van Esch, head of voting at Robeco.

“As a result, we have growing concerns over the company’s resilience through the energy transition, and over the consistency of its approach to climate governance, leading us to vote against the chairman and chair of the safety and sustainability committee,” he added.

Elliott Management, for its part, is widely thought to be putting pressure on BP to minimize low-carbon investments and prioritize oil and gas. It emerged recently that the activist investor has built a near 5% stake in BP, making it one of the firm’s largest shareholders.

Activist shareholder Follow This, which has a long history of pushing for Big Oil to do more to tackle climate change, said the need to vote against Lund had not disappeared following news of his looming departure. The group added that investors concerned with good governance should voice their dissatisfaction.

“Voting against the board is the only way for shareholders to express their dissent over BP’s refusal to allow a vote on its strategy U-turn,” Mark van Baal, founder of Follow This, said in a statement.

“Now, the board has unilaterally changed course without asking shareholder support with a vote. This raises serious governance concerns. It seems BP’s leadership is afraid of its own shareholders,” he added.

Shares of BP are down nearly 10% year-to-date.