bp is a publicly listed integrated oil and gas company headquartered in the UK. In 2020, it had USD 180.37 billion in revenue and a reported 63,600 employees*. bp is one of the seven oil majors and operates across the value chain. Its 20% share in Rosneft and current growth in gas and absolute emissions undermines the low-carbon targets and commitments the company has set.
bp’s ‘Energy Outlook’ is a sector-leading climate scenario analysis, published annually and providing comprehensive information on the thinking behind bp’s strategy. The analysis aims to objectively assess a range of outcomes to inform strategy.. It discloses bp’s scenario thinking and considers changing conditions together in line with a net zero landscape but it does not express the potential impact of the scenarios on the company in financial value-at-risk terms.
bp has targets to achieve net-zero absolute scope 1 and 2 emissions for its upstream operations, net zero for its scope 3 emissions from upstream production volumes (excluding Rosneft) and 50% reduction in scope 1, 2 and 3 emissions intensity for sold products by 2050. bp specifically states that its targets exclude offsets up to 2030 but gives no information regarding use of offsets beyond 2030. bp’s targets beyond 2030 could therefore not be covered in this benchmark assessment and, as a result, the company scores lower in this area than it otherwise would.
The company has committed to reducing its production from 2.6 to 1.5 million barrels of oil equivalent (Mmboe) per day and its absolute emissions by 40% by 2030. bp also has a scope 3 emissions reduction target for its upstream operations.
bp is attempting to reinvent itself. The company has stopped corporate reputation advertising and is improving transparency. It is supporting a number of sustainability initiatives and policies and is using its size and influence to support the wider decarbonisation agenda.
bp has also developed a more robust policy for engagement with trade associations. Acting on this policy, the company has resigned from three trade associations after reviewing their climate positions. The company continues to be a member of many other trade associations, some of which hold a negative stance on climate policy, with the aim to influence these associations from within. bp faces the risk of undermining its climate-positive public statements and strategy unless it takes the difficult steps needed to reduce its dependence on fossil fuels.
In 2019, bp invested only around 3% of CapEx in low-carbon projects. This grew to around 5% in 2020. The company has planned further growth in this area, having committed to an eight-fold increase in low-carbon investments by 2025 and a ten-fold increase by 2030, which would equate to USD 5 billion. Whilst this is an improvement, this would equate to about 25% of current CapEx which is a far below the 77% sectoral expectation for CapEx in low-carbon projects.
bp receives a trend score of +. If the company were reassessed in the near future, its score would likely increase. The company has a transition plan and ambitious aims for 2025 and 2030. However, the base year for these targets is 2019 and so it is too early to assess them against the company’s 1.5°C pathway. bp has a number of new business activities in the making that, if delivered, will most likely transform its portfolio by the next benchmark assessment. These trends by no means indicate that bp will be aligned with its 1.5°C pathway in the near future, but it is likely to improve relative to its current position.
bp has committed to a ten-fold increase in low-carbon investment by 2030, in addition to partnering with 10-15 cities and three core industries to undertake decarbonisation efforts. The company has also committed to reducing its oil production, and its absolute emissions and emissions intensity by approximately 40% by 2030, and developing a capacity to generate 50 gigawatts (GW) of renewable electricity.
bp’s low-carbon transition plan is broad in scope and covers high-level information on most aspects of the company’s planned transition including targets, new business activities, climate scenario analysis and financials. However, the plan lacks sufficient detail around most of these aspects and consequently the company has a low score in relation to its transition plan.
bp is developing key relationships with cities and industrial sectors to undertake decarbonisation efforts. It is also deploying methane measurement capability at its sites to arrive at a baseline, and rapidly increasing its renewables business by purchasing existing offshore wind projects and developing its own renewable energy generation capacity.
bp has committed to undertaking no further exploration in new countries and has also been divesting from some of its higher-emissions assets, such as those in Alaska. Recently, it has been increasing its solar power and offshore wind power capacity. It has also ceased corporate reputation advertising.
bp’s low-carbon transition plan sees a significant role for natural gas as a transition fuel and expects absolute emissions to continue rising as poorer countries develop their transport networks. This is consistent with the current view of the oil and gas sector but is troubling from an emissions perspective.