BP set a new ambition to become a net zero company by 2050 or sooner, and to help the world get to net zero. The ambition is supported by ten aims.
Five aims to get BP to net zero
- Net zero across BP’s operations on an absolute basis by 2050 or sooner.
- Net zero on carbon in BP’s oil and gas production on an absolute basis by 2050 or sooner.
- 50% cut in the carbon intensity of products BP sells by 2050 or sooner.
- Install methane measurement at all BP’s major oil and gas processing sites by 2023 and reduce methane intensity of operations by 50%.
- Increase the proportion of investment into non-oil and gas businesses over time.
Five aims to help the world get to net zero
- More active advocacy for policies that support net zero, including carbon pricing.
- Further incentivise BP’s workforce to deliver aims and mobilise them to advocate for net zero.
- Set new expectations for relationships with trade associations.
- Aim to be recognised as a leader for transparency of reporting, including supporting the recommendations of the TCFD.
- Launch a new team to help countries, cities and large companies decarbonise.
BP will host a capital markets day in September to set out its strategy and near-term plans.
New purpose and ambition
BP’s new CEO Bernard Looney announces a new purpose and a new ambition for the company.
BP’s new purpose is reimagining energy for people and our planet.
The purpose is underpinned by an industry-leading ambition – for BP to become a net zero company by 2050 or sooner, and to help the world get to net zero – and this ambition is supported by ten aims.
To deliver all this, BP will fundamentally transform its whole organisation, and maintain its commitment to performing while transforming.
“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero. We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner. To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it. This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change – this is the right thing for the world and for BP,” Bernard Looney said.
“Energy markets are changing, driven by climate change, technology and societal expectations, and the Board supports Bernard and his new leadership team´s ambition for BP. Aiming for net zero is not only the right thing for BP, it is the right thing for our shareholders and for society more broadly. As we embark on this ambitious agenda, we will maintain a strong focus on safe, reliable and efficient operations and on delivering the promises we have made to our investors,” Helge Lund, BP’s chairman, commented.
BP’s new ambition to be a net zero company by 2050 or sooner covers the greenhouse gas emissions from its operations worldwide, currently around 55 million tonnes of CO2 equivalent (MteCO2e) a year, and the carbon in the oil and gas that it produces, equivalent currently to around 360 MteCO2e emissions a year – both on an absolute basis. Taken together, delivery of these aims would equate to a reduction in emissions to net zero from what is currently around 415 MteCO2e a year.
“This is what we mean by making BP net zero. It directly addresses all the carbon we get out of the ground as well as all the greenhouse gases we emit from our operations. These will be absolute reductions, which is what the world needs. If this were to happen to every barrel of oil and gas produced, the emissions problem for our sector would be solved. But of course, the world is not that simple; the whole energy system has to be transformed and everyone has a contribution to make – producers and sellers of energy, policy makers and everyone who uses energy,” Bernard Looney added.
Therefore, BP also aims to help its customers reduce their emissions by halving the carbon intensity of the products it sells, again by 2050 or sooner – offering customers more and better choices of low- and no-carbon products.
BP also aims to install methane measurement at all of its existing major oil and gas processing sites by 2023 and then reduce the methane intensity of its operations by 50%.
And over time BP also aims to increase the proportion of investment it makes into non-oil and gas businesses.
“We expect to invest more in low carbon businesses – and less in oil and gas – over time. The goal is to invest wisely, into businesses where we can add value, develop at scale, and deliver competitive returns,” Bernard Looney mentioned.
The ambition also includes a series of aims targeted at supporting the world’s progress towards net zero:
- More actively advocating for policies that support net zero, including carbon pricing; stopping corporate reputation advertising and redirecting resources to promote net zero policies, ideas, actions, collaborations and its own net zero ambition.
- Incentivising BP’s global workforce to deliver on the aims and mobilise them to become advocates for net zero; increasing the percentage of remuneration linked to emissions reductions.
- Setting new expectations for BP’s relationships with trade associations, making the case for BP’s views on climate change, being transparent where views differ, and being prepared to leave those where alignment cannot be reached.
- Being recognised as an industry leader for the transparency of reporting, working constructively with the TCFD and other groups to develop good practices and standards for transparency of reporting. BP today announced its support for the recommendations of the TCFD.
- Launching a new team to create integrated clean energy and mobility solutions and to help countries, cities and corporations around the world decarbonise.
The structure of BP’s organisation – and of much of the industry – has been broadly the same for more than a century, split into separate organisations – upstream, downstream, and other businesses. To deliver its new ambition and aims, BP will now undergo a fundamental reorganisation.
“We need to reinvent BP. Our historic structure has served us well but, in order to keep up with rapidly-evolving customer demands and society’s expectations, we need to become more integrated and more focused. So, we are undertaking a major reorganisation, introducing a new structure, a new leadership team and new ways of working for all of us,” Bernard Looney underlined.
Under the plans, BP’s existing, largely autonomous business segments – upstream and downstream – will be dismantled and the group reorganised globally into a more focused and more integrated entity, comprising 11 teams. The heads of these teams will make up BP’s new leadership team.
Over the next few months, the new BP leadership team will focus on building their teams and on developing BP’s strategy to deliver the ambition.
“Together we will aim to build a more agile, innovative and efficient BP. A purpose-driven, digitally-enabled, fully-integrated organisation. I’m confident that this new leadership team, together with all our people, have the skill and will to turn BP into a thriving sustainable energy business that is a force for good in a net zero world,” Bernard Looney said.
Performing while transforming
Despite the planned group-wide programme of change, BP’s fundamental commitments remain unchanged – to safety and to investors.
“BP needs to continue to perform as we transform. As committed as I am to making transformation happen, I am equally committed to some fundamental principles that have served us well. Safe and reliable operations will always underpin all we do, and we remain committed to meeting the promises we have made to our shareholders. We can only reimagine energy if we are financially strong, able to pay the dividend our owners depend on and to generate the cash to invest in new low and no-carbon businesses,” Bernard Looney concluded.
BP’s commitment to safe and reliable operations is unchanged with safety as a core value. The new structure is expected to underpin and strengthen safety performance.
BP also remains committed to its investor proposition of growing sustainable free cash flow and distributions to shareholders over the long term. It continues to be committed to a strong financial frame including deleveraging the balance sheet and maintaining capital discipline, to delivering its free cash flow targets for 2021, and to staying focused on costs and pursuing efficiencies.