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BP, Shell Put Oil Ahead of Earth, ESG Group Warns Investors

Oil giants focus excessively on fossil fuel production, a green advocacy group concluded, and urged investors to demand clear plans for controlling climate change.

Joe McGrath: October 25, 2017

Performance targets of energy companies Royal Dutch Shell and BP remain too heavily biased towards hydrocarbon production, a report has warned.

ShareAction — a U.K. charity that promotes environment, social, and governance-oriented investing — looked at BP and Shell’s greenhouse emissions management policies, asset portfolio resilience, corporate key performance indicators, executive incentive structures, and influences on public policy. The group concluded that the oil giants prioritize the production of fossil fuels, which could incentivize management behavior “misaligned” with shareholder interest, as defined by ShareAction.

The activist group urged investors to step up pressure on the two businesses for corporate policies supportive of “<2°C” — a less than 2°C rise in global temperatures by the end of the century.

“Given the potential risks faced by asset owners and asset managers from climate change, ShareAction believes that it is now prudent for investors to escalate engagement with BP and Shell to request clear planning around a time-bound <2°C transition strategy,” the report states. FULL ARTICLE

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