The ongoing “AGM (annual general meetings) season”, has been fertile in episodes around the Oil industry and the challenge it faces to evolve to a new business model where the product the industry drills and sells has been under intense scrutiny. The harm Oil pollution generates to the environment and its impact on Climate change has long been proved by science and the sense of emergency, sort of “the house is on fire”, has become abundantly clear.

The battle against climate change may be spelling the end of anything resembling "business as usual" for the Oil industry. So, what happened in the last month?

  • Before the AGM season began, the world’s biggest asset manager BlackRock had warned companies (especially the Oil industry) it wanted to see them set climate-related targets and report against them, or they could vote against the board.
  • Following that, BlackRock backed a shareholder resolution at BP's annual general meeting (AGM), calling for faster climate action. Its vote at BP's AGM points to growing pressure on both major oil companies and investors to accelerate efforts to slash greenhouse gas emissions. They hold a 6.8% stake in BP and are the biggest single shareholder. "While recognizing the company's efforts to date and direction of travel, supporting the resolution signals our desire to see the company accelerate its efforts on climate risk management," BlackRock said in a vote bulletin.

The resolution BlackRock backed was from a climate activist group demanding BP to set tougher emission reduction targets and was supported by 20.6% of shareholder votes. Although the level of support meant the resolution (filed by Dutch group Follow This) was rejected, it was significantly higher than the last climate resolution it filed at BP's 2019 AGM, when it won 8.4% support

It is worthwhile noting that BP, led by CEO Bernard Looney since February 2020, last year announced plans to reduce greenhouse gas emissions from oil and gas it produces to zero and reduces by half the carbon intensity of all products it sells by 2050. In one of the sector's most ambitious strategies, BP also plans to slash its oil output by 40% and boost its renewable power business by 20-fold by 2030. Clearly, BP seems to be the Oil company leading the energy transition in the industry.

  • A court in the Netherlands has ruled in a landmark case that the oil giant Shell must reduce its emissions by 2030, cutting its CO2 emissions by 45% compared to 2019 levels. “The Shell group is responsible for its own CO2 emissions and those of its suppliers”, the verdict said. It is the first time a company has been legally obliged to align its policies with the Paris climate accords. Though the decision only applies in the Netherlands, it could have wider effects elsewhere, it has all the ingredients to become a "precedent-setting judgment".
  • A hedge fund that has criticized ExxonMobil's climate strategy won enough shareholder support to oust at least two directors from the oil giant's board, a major loss for the once-mighty company. For the first time in modern history, America's largest oil company faced a credible challenge from an activist investor, Engine No. 1. The vote is a major milestone in the climate battle because it is the first proxy campaign at a major US company in which the case for change was built around the shift away from fossil fuels.
  • The International Energy Agency, which was founded by rich industrial nations after oil shocks in the 1970s to promote secure and affordable energy supplies, says the world needs to stop drilling for oil and gas right now to prevent a climate catastrophe. In order to reach net-zero carbon emissions by 2050, the influential group said in a report that investment in new fossil fuel supply projects must stop immediately, and no new coal-fired plants should be approved.


In my mind, the biggest challenge for humankind is certainly how effectively the energy transition will be done. We have lived in the last 100 years with energy based on fossil fuels and, as we stand, it is impossible to provide the energy the world needs without carrying on using that same form of energy - there is plenty of it on the ground, reasonably cheap and the resources to make it available are all working. It is an easy solution but...the Planet cannot afford it. 

Some Oil&Gas companies have seen it, they know they need to make this transition, they know that if they simply stop producing the "world stops" (sort of civilization collapse), they have the resources, the skills, the processes, the capital to operate the change. In my view, they are certainly part of the solution. I go further, they are the key part of the solution. As the CEO of BP recently said: "Just give us for a second the benefit of the doubt that we can indeed be a force for good in this transition - if you do, which other sorts of the companies are that well equipped to operate the change?"

I can only hope that Oil giants will become “forces for good” and will, indeed, be able to make that transition – for the benefit of People and the Planet.

Have a great and impactful week!

Nuno Moreira da Cruz
Executive Director
Center for Responsible Business & Leadership 

This article refers to edition #90 of the "Have a Great and Impactful Week" Newsletter.
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