Investor battle over climate action brewing at oil giant BP

British Petroleum (BP) is facing the threat of legal action from activist climate investors. The investors say BP has carried out an “unprecedented attack on shareholder rights.” Legal action is on the table because the company refused to include a resolution from the investors on the agenda of its annual meeting.

Their proposal called on the company to present a strategy for preserving value in the event of a decline in demand for oil and gas. The resolution was submitted by 16 institutional investors brought together by FollowThis, a Dutch green investment group.

Experts consulted by the Financial Times said this is the first time a FTSE 100 company has refused to include a resolution that had sufficient support.

FollowThis has clashed with the oil company before—in 2024, the group was sued by Exxon as it tried to block a similar initiative by FollowThis. Exxon argued at the time that the initiative violated US laws on shareholder proposals. The lawsuit was ultimately dismissed by the court, mainly because of complicated jurisdictional issues.

FollowThis has taken a similar approach with other companies, including Shell; it had previously succeeded in getting a similar resolution onto BP’s agenda. This time, however, the British company is resisting.

BP and its climate dilemma

BP is one of the fossil fuel companies that had been preparing a highly ambitious transition to renewable energy. In 2021, more than 20% of shareholders called for more ambitious climate targets in a resolution. The company then presented a strategy for significantly diversifying its portfolio, with the aim of becoming an integrated energy company, halving emissions by 2030 and reaching net zero by 2050. The company’s earnings and share price ultimately suffered, however, and last year the British company opted for a “strategic reset.” This meant pulling back from renewables and refocusing on fossil fuels.

The company has only partially pulled back—in particular, last year it lowered its targets and began investing in oil and gas again, while still saying it is on course to reach net zero by 2050. The company’s management is likely to keep pushing a fossil fuel agenda, or at least to push back against activist shareholders. At the meeting mentioned above in April, the company proposed scrapping two resolutions from 2015 and 2019. One of them requires the company to report on how its strategy aligns with the goals of the Paris Agreement.

Behind the disputes over shareholder rights lies a broader debate about the stance of fossil fuel companies on climate change. The activist group FollowThis, however, appears to be in the minority. After all, BP’s strategic reset was a response to the main signal for publicly traded companies: earnings, and the resulting share price. The company also appears to have the confidence of shareholders who adhere to ESG principles.

According to an FT analysis, as many as 60 ESG funds held the company’s shares at the end of 2025, including BlackRock and UBS. These asset managers are increasingly caught between conflicting pressures from very different policies in the EU and the US. While in the EU there is talk that an ESG fund should not hold any shares in fossil fuel producers, in the US ESG funds have come under intense legal pressure in some Republican-led states.

BP is not facing pressure only from environmental investors. Last year, it emerged that New York hedge fund Elliott Management had acquired a 5% stake in the company. The fund is expected to call for a retreat from low-carbon investments and a pure focus on the fossil fuel industry. It is also expected to pressure the company’s management and push for changes to the board. Elliott is known for taking stakes in companies it believes have lost value because of poor management. It will therefore be interesting to watch what happens at the annual general meeting in April.