Leading asset manager Legal & General is set to vote against the re-election of BP’s chair, Helge Lund, at the upcoming annual meeting. This decision reflects ongoing discontent among shareholders regarding BP’s recent pivot back to oil and gas, moving away from its ambitious renewable energy plans.
Legal & General, which holds a 1.8 percent stake in BP, expressed its “deep concern” over this strategic change and the absence of shareholder consultation on the matter. The asset manager emphasized that climate change poses a significant and long-term financial risk to investors.
Additionally, several other smaller shareholders are expected to support this move to reject Lund’s re-election. In contrast, some prominent investors, like Elliott Investment Management, have advocated for reduced spending on renewable initiatives, highlighting differing investor perspectives.
This situation underscores the challenges faced by BP and other major oil companies as they navigate the sensitive balance between maintaining fossil fuel operations and transitioning towards sustainable energy sources, which generally yield lower but more stable returns.
BP announced that Lund might step down in 2026. He took on the role in 2019, with the objective of guiding the company through the energy transition and appointing a new chief executive. Lund’s predecessor, Bernard Looney, initiated a vigorous shift toward renewable energy but was dismissed in 2023 for not being transparent with the board about his relationships with colleagues.
Despite the initial progress BP made with its green strategy, which positioned it ahead of competitors, the company faced significant pushback. Ultimately, it did not garner enough support from shareholders to sustain its green initiatives, leaving it open to pressure particularly from Elliott, which has acquired nearly 5 percent of BP.
Current CEO Murray Auchincloss disclosed in February that BP would be stepping away from its renewable strategy. Despite Lund’s announced departure, it seems unlikely to prevent potential backlash at the annual meeting.
Other asset managers, such as Robeco, as well as UK pension funds like Nest and Border to Coast Pensions, are also planning to vote against the chair’s re-election. Concerns have been raised regarding BP’s stability during the energy transition and the consistency of its climate governance.
Legal & General stated that while they appreciated Lund’s plan to resign, they hopes for a more defined and accelerated succession process. BP, for its part, contends it has received considerable backing for its revised strategy following extensive discussions with shareholders and reiterated that its primary focus is on executing its strategic goals.
The atmosphere surrounding the annual meeting comes amidst a recent downgrade from UBS, which shifted its recommendation for BP stock from ‘buy’ to ‘neutral,’ citing uncertainties in the market that complicate the company’s strategy execution.
In recent weeks, oil prices have also seen a decline, affected by concerns over looming tensions in the US-China trade relationship and OPEC+’s plans to elevate production levels. Brent crude oil traded around $63 per barrel on Friday, a notable drop from almost $75 the previous Wednesday.