BP’s share price fell on Wednesday, after CEO Murray Auchincloss announced the company was undertaking a ‘reset’ of its plans to shift to renewables.
Commenting on the share price fall, AJ Bell head of financial analysis Danni Hewson, said, “It’s not easy being green, especially in 2025 when the overriding sentiment coming from the US White House is ‘drill, baby, drill’. BP’s CEO Murray Auchincloss has been under pressure to deliver [a] reset from investors unhappy at falling profits and a share price that’s lagged competitors.
“The reset had been expected, but the real question was how far the company would go in rolling back its green commitments and whether it would accede to reported pressure to shed its renewables sector entirely.”
‘Optimism for a fast transition’
At a capital markets day event, Auchincloss said that the company’s “optimism for a fast transition was misplaced”, with the business planning to cut its renewable energy investment from £3.95 billion a year to between £790 million and £1.58 billion, and increase fossil fuel investment.
As Hewson noted, the drop in BP‘s share price that followed the announcement was for one of two reasons – whether investors were “disappointed because they wanted the company to go even further, or if others have been disappointed by the U-turn.”
Net-zero pledge
In February 2020, then-CEO Bernard Looney announced that BP would become net zero by 2050.
“So much has changed since then, not least the surge in energy prices following Russia’s invasion of Ukraine that ravaged household budgets and put governments under pressure to keep costs under control, even if it meant slowing the energy transition,” Hewson commented.
“There will be plenty who will criticise BP’s move on environmental grounds and others who will question whether the step back is short sighted. There’s also another question over whether Mr Auchincloss has done enough to appease the activists and whether this reset will be the last.”
‘Cannot be trusted’
Elsewhere, responding to BP’s announcement, 350.org said that the oil giant’s plans are ‘at odds with people’s needs for clean, affordable energy, international climate targets, and scientific consensus’.
“This move by oil giant BP clearly demonstrates why super-rich corporations and individuals, chasing short-term profit for themselves and shareholders, cannot be trusted with fixing the climate crisis or leading the transition to renewable energy we so badly need,” said Matilda Borgström, UK campaigner at 350.org.
“The climate crisis isn’t going away, and neither is public demand for urgent action to fund the switch to safe, affordable renewable energy. Pumping money into more oil and gas increases the risk of climate impacts for us all, flies in the face of legal climate targets, and with the renewables sector growing exponentially is a big risk to the shareholders that BP is so keen to please.” Read more here.
