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City giant Legal & General (L&G) is demanding the scalp of BP’s chairman over the oil giant’s retreat from net zero.
The FTSE 100 fund manager is refusing to support the re-election of chairman Helge Lund at the company’s looming annual meeting and will vote against keeping him on for another year, which Lund has already announced will be his last year in charge.
The move follows BP’s recent reversal of its 2020 commitment to green energy, which had included a tenfold increase in low-carbon investment and a 40pc reduction in fossil fuel production by 2030.
Over the five years since then BP had seen its shares plummeting, leaving it increasingly exposed to foreign takeovers.
Lund originally supported that policy, however, a few weeks ago at BP’s capital markets day, he and chief executive Murray Auchincloss reversed it.
BP had gone “too far and too fast”, they said as both abandoned most of its green pledges and committed to indefinite annual increases in fossil fuel production.
However, L&G said it strongly opposed that decision which “represents a financially material and systemic long-term risk to our clients’ portfolios”.
It added: “We are deeply concerned by the recent substantive revisions made to the company’s strategy, coupled with the decision not to allow a shareholder vote on the newly amended climate transition strategy at the 2025 AGM.”
L&G said it was pleased Mr Lund had decided to step down, but should not delay his departure till 2026.
“We view the recent announcement of Helge Lund’s intention to step down as chair positively; however, we expect the succession process to follow a clearer and swifter timeframe than that currently posited by the company, to ensure an orderly and meaningful transition.”
The move coincides with BP’s announcement on Friday that it has lowered its outlook for gas production in the first quarter of 2025 while its debts are set to jump.
The gas marketing and trading result is expected to be “weak”, BP told investors, primarily because of the sales of businesses in Egypt and Trinidad that the company completed at the end of the year.
Both announcements come amid a campaign by activist US hedge fund Elliott for more change at the company – with predictions Mr Auchincloss could also be forced out. Elliott has taken a 5pc stake in BP.
Ashley Kelty, of investment bank Panmure Liberum, said Mr Lund’s “long goodbye tour” would leave BP’s board facing extra scrutiny with calls for a change in chief executive.
“Lund is to step down but since no successor has been identified he’s hanging around until next year. Activist Elliott appears to be pushing for further change, and we think CEO Murray Auchincloss’s position is becoming increasingly untenable,” he said.
“The investor response to the recent ‘strategy reset’ has been lukewarm and we are probably not alone in thinking that a new CEO is arguably needed alongside a major strategy reset to revitalise the company’s performance.”