Glass Lewis Recommends Vote Against Bp Chair Over Blocked Climate Resolution

Glass Lewis recommends vote against BP chair over blocked climate resolution

Proxy Advisor's Recommendation and Shareholder Response

By Shadia Nasralla and Stephanie Kelly

Glass Lewis Opposes BP Chair Over Climate Resolution

LONDON, April 7 (Reuters) - Major proxy advisor Glass Lewis has recommended BP shareholders vote against chair Albert Manifold over the company's decision to block a climate-related resolution from its annual general meeting, according to a note seen by Reuters.

Shareholder advisory firms rarely recommend investors to vote against a chairperson or a board's wishes.

Accountability for Excluding Climate Proposal

Glass Lewis said Manifold, who became BP chair in October, was ultimately accountable for BP's decision to exclude a resolution filed by climate activist group Follow This from its April 23 AGM. The resolution called on BP to disclose how its strategy would perform under scenarios of declining demand for oil and gas.

Concerns Over Transparency and Shareholder Communication

"The decision further raises questions about transparency, shareholder communication, and responsiveness to shareholder concerns," said Glass Lewis, whose recommendations could influence shareholder voting.

It added that shareholders likely expected a more detailed explanation, particularly given potential legal ramifications associated with omitting the resolution.

Shareholder Backlash and BP's Response

Legal & General Investment Management—which holds about 0.85% of BP shares and ranks among its top eight shareholders according to LSEG data—also plans to vote against Manifold, it said on Tuesday. It cited several concerns, including BP's decision to block the Follow This resolution.

BP's website has cited Manifold saying that BP's board viewed the Follow This proposal as invalid and would be ineffective if it were to pass at the AGM.

The oil major has turned its focus back to oil and gas following its expansion into renewables, a shift the company's new CEO Meg O'Neill said she would continue after taking on the role last week.

Other Recommendations and Resolutions

OTHER RECOMMENDATIONS

Opposition to Scrapping Climate Disclosure Resolutions

Glass Lewis has also opposed BP's proposal to scrap two previous resolutions requiring company-specific climate disclosures, echoing a move by ISS, another influential proxy adviser.

Follow This, backed by some European investors representing less than 0.3% of BP shareholders, has urged investors to vote against retiring those resolutions.

BP's Position on Reporting Frameworks

Standardised reporting frameworks have overtaken the older commitments, a BP spokesperson said, adding that the oil major wants to build a simpler company and has had extensive engagement with investors.

BP needs 75% shareholder support to drop the commitments, which shareholders approved with nearly unanimous backing in 2015 and 2019.

Debate Over Online-Only Meetings and Low-Carbon Spending

ISS and LGIM are also against a proposal that would allow BP to hold online-only annual meetings.

In contrast with ISS, Glass Lewis and LGIM support a separate resolution filed by investors led by activist group ACCR, who have previously said their backers account for around 0.4% of BP's shares. That proposal asks BP to publish more information showing that shifting spending from low-carbon projects to oil and gas will strengthen shareholder value.

(Reporting by Shadia Nasralla and Stephanie Kelly; Editing by Bernadette Baum, Susan Fenton and Janane Venkatraman)