BP’s climate goals must not “evaporate” along with another chief executive, campaign groups have said after the shock resignation of Bernard Looney.
The chief executive is stepping down after three years at the helm of Britain’s biggest petroleum company after failing to disclose full details of relationships with colleagues, although many old-school shareholders had also reportedly been putting pressure on him over his plans for a net zero energy transition by 2050.
Looney had already been forced to backtrack on those plans earlier this year, but BP remained the only major oil company aiming to cut fossil fuel output by the end of the decade.
Tessa Khan, the executive director of Uplift, said: “Looney understood that the industry’s social licence is hanging by a thread. Any rowing back on his already desperately inadequate plan would sever it completely.
“If people inside BP are baulking at even this, which is so out of step with what’s needed to stay within habitable climate limits, it exposes the enormous gulf between what the industry is saying publicly and what they really think.”
None of the oil supermajors are moving fast enough to prevent dangerous levels of global warming, according to the International Energy Agency. But under Looney, BP had put a little more meat on the bones of the company’s net zero target. He scaled up investment in renewable energies, hired more clean-tech specialists and astonished many industry analysts by stating the company did not expect to pump all of the fossil fuels in its reserves.
Petroleum investors have been hard to convince. Despite record profits of $28bn last year, BP’s share price has performed poorly compared to rivals who have used the Ukraine war as an excuse to scale back their climate commitments and talk up the need for increased production.
According to the Wall Street Journal, shares in BP have risen about 7% since Looney became CEO in February 2020, compared with a 25% climb for Shell. “However, Chevron, up 51%, and Exxon Mobil, which has gained 87%, leave both in the dust.”
The pressure on Looney, 53, was evident earlier this year when he announced a watering down of his energy transition plan. Instead of the previous target of a 40% cut in oil and gas production by 2030, he said BP would aim for just 25%.
This frustrated climate activists, but Looney pointed out that his company was still ahead of its peers. “We’re holding our nerve on the transition,” he told reporters earlier this month. “I believe that’s what the world needs. And I believe it’s our job to prove that is in the long-term interests of our shareholders.”
Looney was the last of a generation of BP managers to be mentored by the former chief executive John Browne, who also promised bold steps towards a clean energy transition at the start of the century. He too was forced to quit as a result of gossip about his personal relationships, which led BP to delay climate action and ramp up its cash-cow business of hydrocarbon extraction.
Climate campaigners said the oil company must not repeat this mistake. “Whoever takes the reins at BP must significantly build on Looney’s green ambitions, not walk them back. Too often, corporate climate pledges evaporate with a CEOs departure; their choice of a new CEO will be a litmus test of the BP board’s climate credentials,” said Charlie Kronick, of Greenpeace UK. “The departure of any chief executive can’t be an excuse for oil and gas giants to avoid taking the action needed to prevent the worst impacts of climate change.
Instead of backtracking, Greenpeace urged BP to move forwards because its policies are still far behind what is needed to prevent dangerous levels of global heating.
Market analysts, however, said the change in leadership would give BP the space to rethink its approach, and push back the trajectory of emissions.
Interim CEO, Murray Auchincloss, told staff BP would stay the course. “Our strategy hasn’t changed. And our focus remains on performance – quarter by quarter,” he told an internal meeting, according to Reuters.
The choice of successor will now be crucial in determining which direction BP will take and at what speed.