BP commits to net zero by 2050 or sooner

BP’s new CEO Bernard Looney announced this week a fundamental reorganization of the company to help the company reach its ambition to be a net zero company across its entire operations by 2050 or sooner. This includes emissions from BP fuel burnt by the company’s customers which entails tackling approx. 415 million tonnes of emissions, most of which (360 million) comes from the carbon content of the company’s upstream oil and gas production. The company has also committed to helping the world meet net zero.

The five aims for BP to be a net-zero company are:

• Net zero operations: Get to net zero across entire operations on an absolute basis by 2050 or sooner
• Net zero oil and gas: Get to net zero on an absolute basis from Upstream production by 2050 or sooner
• Halving intensity: Halve carbon intensity of the products sold by 2050 or sooner
• Reducing methane: Halve operated methane intensity, and measurement at all major processing sites by 2023
• New $ for new energies: Increase investment into new energies

The five aims for BP to help the world meet net zero are:

• Advocate: Stop corporate reputation advertising and redirect resources to active advocacy for progressive climate policies
• Incentivize employees: Incentivize employees to deliver on our aims and advocate for net zero by increasing climate element in annual bonus for leadership and 37,000 employees
• Align associations: Reframe relationships with trade associations and exit when appropriate
• Transparency leader: Become a recognised leader in transparency for our sector – support Task Force on Climate-related Financial Disclosures (TCFD) recommendations and work to implement them    
• Clean cities: Create a team dedicated to helping countries, cities and corporations around the world decarbonize

The FT views the commitment as the “most ambitious climate target to date from a major oil company” and notes that “[s]hareholders gave the plan a cautious welcome with BP’s shares closing up 1 per cent.”

UPDATE: The company has since released further details on how it will achieve its commitment.

A new structure

• As of 1 July 2020, BP’s business model is replaced by a new one which is “more focused, more integrated and faces the energy transition head on.” BP calls this “a fundamental reorganization – possibly the most wide-ranging in over a century.”
• The new business model focuses on four core capabilities: (1) operations, (2) customers, (3) low carbon and (4) innovation. These business groups will work with three integrators, to facilitate collaboration and unlock value. Four teams will serve as enablers of business delivery.

Source: BP, Reinventing BP

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‍A new leadership team: The leaders of these 11 teams will form the new BP leadership team

New ways of working: These leaders are now in the process of developing their new strategy which will be announced in September. This will include placing digital technologies at the heart of the business, as well as measures to empower and support teams.

“We have got to change – and change profoundly. But it is more than having to change – we want to change, because it is the right thing for the world, and it is a tremendous business opportunity for BP.”                      

Bernard Looney, BP Chief Executive Officer, Reinventing BP (BP, February 2020)

“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero.”                      

Bernard Looney, BP Chief Executive Officer, Reimagining energy (BP, February 2020)