BP is set to hold its annual general meeting (AGM) on Thursday at its Sunbury research centre in the UK, with new chairman Albert Manifold facing a contentious first meeting. Several key investors plan to vote against his formal appointment, overshadowed by the supermajor's decision to block a climate resolution proposed by activist investor Follow This. This resolution, co-filed with 16 institutional investors managing over €1 trillion in assets, urged BP to disclose its strategy for maintaining shareholder value amid declining oil and gas demand. BP declined to include it, claiming it was "not valid," a move that has sparked transparency concerns and accusations of hostility to shareholder rights.

Investor Dissent and Proxy Advisor Recommendations

Legal & General Investment Management, one of BP's 10 largest shareholders, confirmed it would vote against Manifold's election, citing concern over the precedent set by blocking the resolution, which it said "compromised shareholder rights." A raft of UK pension funds, including Border to Coast, Railpen, The Local Authority Pension Fund Forum, and Royal London Asset Management, also plan to vote against Manifold. Proxy advisor Glass Lewis recommended shareholders vote against his election, noting the decision "raises questions about transparency, shareholder communication and responsiveness to shareholder concerns."

Shareholder Objections to Online-Only AGM

Shareholders, including Follow This, have also objected to BP's resolution to move all AGMs online, claiming it would remove the ability for shareholders to effectively voice their disagreement. Follow This founder Mark van Baal stated, "An online only meeting would be devastating for shareholder rights."

Activist Shareholder Actions and Legal Proceedings

Activist shareholder ACCR has called on BP to outline how it will deliver returns following its pivot back to upstream investment, describing the AGM as an "immensely consequential moment for shareholder democracy at UK public companies." Follow This has taken legal action against BP for failing to include its resolution, with further updates expected after the AGM. BP has included a separate activist resolution requesting a breakdown of capital expenditure plans and strategies for all new oil and gas development.

Support from Major Shareholder Norges Bank

Despite the dissent, Norges Bank Investment Management, BP's second-largest shareholder with a 2.98% stake, plans to vote in support of BP's AGM recommendations. Norges Bank stated it would not support a shareholder proposal that appears "overly prescriptive" regarding strategy or operations, or that sets "unrealistic timeframes, targets or methods for implementation." Van Baal lamented this decision, calling it "the end of stewardship for Norges."

Context of BP's Strategic Shift and Market Performance

This year's AGM comes one year after BP shifted away from its renewable energy splurge to create greater shareholder value. Calls to not re-elect former chairman Helge Lund at last year's AGM drew support from around 24% of shareholders, though Lund had already announced his intention to step down. Manifold, former CEO of CRH, was named as Lund's replacement in July last year. BP's share price has surged by almost 60% over the past year, buoyed by major new discoveries and progress on its asset disposal program, while fuel supply and price shocks from the Iran conflict have highlighted the importance of oil and gas companies in energy security. Against this backdrop, the level of support for green activist resolutions remains unclear, with RBC Capital Markets analyst Biraj Borkhataria stating that Follow This' resolution "doesn’t make any sense to us," arguing that pushing for a supply-side driven energy transition is "doomed to fail."