Five aims to get BP to net zero:
1. Net zero across BP’s operations on an absolute basis by 2050
or sooner.
2. Net zero on carbon in BP’s oil and gas production on an
absolute basis by 2050 or sooner.
3. 50% cut in the carbon intensity of products BP sells by 2050
or sooner.
4. Install methane measurement at all BP’s major oil and gas
processing sites by 2023 and reduce methane
intensity of operations by 50%.
5. Increase the proportion of investment into non-oil and gas
businesses over time.
Five aims to help the world get to net zero:
6. More active advocacy for policies that support net zero,
including carbon pricing.
7. Further incentivise BP’s workforce to deliver aims and
mobilise them to advocate for net zero.
8. Set new expectations for relationships with trade
associations.
9. Aim to be recognised as a leader for transparency of
reporting, including supporting the recommendations of the
TCFD.
10. Launch a new team to help countries, cities and large
companies decarbonise.
To deliver the ambition, BP will fundamentally reorganise to
become a more focused, more integrated company,
comprising:
- Four business groups to deliver performance and value
growth:
Production & Operations; Customers & Products;
Gas & Low Carbon Energy; and Innovation
& Engineering.
- Three integrators to identify and maximise
opportunities:
Sustainability & Strategy; Regions, Cities &
Solutions; and Trading & Shipping.
- Four core enablers to support business delivery:
Finance; Legal; People & Culture;
and Communications & Advocacy.
BP is committed to performing while transforming:
No change to BP’s fundamental commitments:
- to safe and reliable operations
- to delivering BP’s investor proposition, including
commitments on:
- growing sustainable free cash flow and shareholder
distributions over long term;
- maintaining strong financial frame and cost and capital
discipline, and deleveraging the balance sheet;
- delivering 2021 free cash flow targets.
BP will host a capital markets day in September to set
out its strategy and near-term plans.
New purpose and ambition
BP’s new CEO Bernard Looney today announces a new purpose and a
new ambition for the company.
BP’s new purpose is reimagining energy for people
and our planet.
The purpose is underpinned by an industry-leading ambition
– for BP to become a net zero company by 2050 or
sooner, and to help the world get to net zero – and
this ambition is supported by ten aims.
To deliver all this, BP will fundamentally transform its whole
organisation, and maintain its commitment to performing while
transforming.
Bernard Looney said:
“The world’s carbon budget is finite and running out fast;
we need a rapid transition to net zero. We all want energy that
is reliable and affordable, but that is no longer enough. It
must also be cleaner. To deliver that, trillions of dollars
will need to be invested in replumbing and rewiring the world’s
energy system. It will require nothing short of reimagining
energy as we know it.
“This will certainly be a challenge, but also a tremendous
opportunity. It is clear to me, and to our stakeholders, that
for BP to play our part and serve our purpose, we have to
change. And we want to change – this is the right thing for the
world and for BP.”
Helge Lund, BP’s chairman, commented:
“Energy markets are changing, driven by climate change,
technology and societal expectations, and the Board supports
Bernard and his new leadership team´s ambition for BP. Aiming
for net zero is not only the right thing for BP, it is the
right thing for our shareholders and for society more broadly.
As we embark on this ambitious agenda, we will maintain a
strong focus on safe, reliable and efficient operations and on
delivering the promises we have made to our investors.”
Reimagining energy
BP’s new ambition to be a net zero company by 2050 or sooner
covers the greenhouse gas emissions from its operations
worldwide, currently around 55 million tonnes of
CO2 equivalent (MteCO2e) a year,
and the carbon in the oil and gas that it produces, equivalent
currently to around 360 MteCO2e emissions a year –
both on an absolute basis. Taken together, delivery of these
aims would equate to a reduction in emissions to net zero from
what is currently around 415 MteCO2e a
year.
“This is what we mean by making BP net zero. It directly
addresses all the carbon we get out of the ground as well as
all the greenhouse gases we emit from our operations. These
will be absolute reductions, which is what the world needs. If
this were to happen to every barrel of oil and gas produced,
the emissions problem for our sector would be solved. But of
course, the world is not that simple; the whole energy system
has to be transformed and everyone has a contribution to make –
producers and sellers of energy, policy makers and everyone who
uses energy.” - Bernard Looney
Therefore, BP also aims to help its customers reduce their
emissions by halving the carbon intensity of the products it
sells, again by 2050 or sooner – offering customers more and
better choices of low- and no-carbon products.
BP also aims to install methane measurement at all of its
existing major oil and gas processing sites by 2023 and then
reduce the methane intensity of its operations by 50%.
And over time BP also aims to increase the proportion of
investment it makes into non-oil and gas businesses:
“We expect to invest more in low carbon businesses – and less
in oil and gas – over time. The goal is to invest wisely, into
businesses where we can add value, develop at scale, and
deliver competitive returns.” - Bernard
Looney.
The ambition also includes a series of aims targeted at
supporting the world’s progress towards net zero:
- More actively advocating for policies that support net
zero, including carbon pricing; stopping corporate reputation
advertising and redirecting resources to promote net zero
policies, ideas, actions, collaborations and its own net zero
ambition.
- Incentivising BP’s global workforce to deliver on the aims
and mobilise them to become advocates for net zero; increasing
the percentage of remuneration linked to emissions
reductions.
- Setting new expectations for BP’s relationships with trade
associations, making the case for BP’s views on climate change,
being transparent where views differ, and being prepared to
leave those where alignment cannot be reached.
- Being recognised as an industry leader for the transparency
of reporting, working constructively with the TCFD and other
groups to develop good practices and standards for transparency
of reporting. BP today announced its support for the
recommendations of the TCFD.
- Launching a new team to create integrated clean energy and
mobility solutions and to help countries, cities and
corporations around the world decarbonise.
Reinventing BP
The structure of BP’s organisation – and of much of the
industry – has been broadly the same for more than a century,
split into separate organisations – upstream, downstream, and
other businesses. To deliver its new ambition and aims, BP will
now undergo a fundamental reorganisation.
“We need to reinvent BP. Our historic structure has served
us well but, in order to keep up with rapidly-evolving customer
demands and society’s expectations, we need to become more
integrated and more focused. So we are undertaking a major
reorganisation, introducing a new structure, a new leadership
team and new ways of working for all of us.”
- Bernard Looney
Under the plans, BP’s existing, largely autonomous business
segments – upstream and downstream – will be dismantled and the
group reorganised globally into a more focused and more
integrated entity, comprising 11 teams. The heads of these
teams will make up BP’s new leadership team.
Performance and value growth will be delivered by four business
groups:
-
Production & Operations, led by Gordon
Birrell, will be BP’s new operational centre, bringing its
operations together, focused on driving safety, efficiency
and value growth.
-
Customers & Products, headed by Emma
Delaney, will focus on customers as the driving force for the
energy products and services of the future, and on customer
experience and expansion in rapidly changing markets.
-
Gas & Low Carbon Energy, led by Dev Sanyal,
will unite energy teams currently dispersed around BP to
create focused low carbon solutions. It will also pursue
opportunities in decarbonisation and new value chains such as
hydrogen and CCUS.
-
Innovation & Engineering, headed by David
Eyton, will bring added momentum to BP’s venturing and
Launchpad investments and act as a catalyst for creating
value from disruptive opportunities. It will also house BP’s
engineering discipline and safety and operational risk team.
Three integrators will be established to find and maximise
opportunities for BP:
-
Strategy & Sustainability, headed by Giulia
Chierchia, who is joining BP from McKinsey, will ensure that
sustainability is embedded at the top of BP and provide a
single group-wide approach to strategy and capital
allocation.
-
Regions, Cities & Solutions, led by William
Lin, will build relationships with regions, cities and large
corporations, aiming to develop integrated energy and carbon
solutions that can bring emissions down at scale.
-
Trading & Shipping, led by Carol Howle, will
build on BP’s existing deep expertise in its existing
business to more effectively help BP capture new commercial
opportunities and add value.
Four teams will serve as enablers of business delivery:
-
Finance, led by Murray Auchincloss.
-
Legal, headed by Eric Nitcher.
-
People & Culture, headed by Kerry Dryburgh.
-
Communications & Advocacy, led by Geoff
Morrell.
Over the next few months, the new BP leadership team will focus
on building their teams and on developing BP’s strategy to
deliver the ambition.
“Together we will aim to build a more agile, innovative and
efficient BP. A purpose-driven, digitally-enabled,
fully-integrated organisation. I’m confident that this new
leadership team, together with all our people, have the skill
and will to turn BP into a thriving sustainable energy business
that is a force for good in a net zero world.”
- Bernard Looney
Performing while transforming
Despite the planned group-wide programme of change, BP’s
fundamental commitments remain unchanged – to safety and to
investors.
“BP needs to continue to perform as we transform. As
committed as I am to making transformation happen, I am equally
committed to some fundamental principles that have served us
well. Safe and reliable operations will always underpin all we
do, and we remain committed to meeting the promises we have
made to our shareholders. We can only reimagine energy if we
are financially strong, able to pay the dividend our owners
depend on and to generate the cash to invest in new low and
no-carbon businesses.” - Bernard
Looney
BP’s commitment to safe and reliable operations is unchanged
with safety as a core value. The new structure is expected to
underpin and strengthen safety performance.
BP also remains committed to its investor proposition of
growing sustainable free cash flow and distributions to
shareholders over the long term. It continues to be committed
to a strong financial frame including deleveraging the balance
sheet and maintaining capital discipline, to delivering its
free cash flow targets for 2021, and to staying focused on
costs and pursuing efficiencies.
BP intends to host a capital markets day in September at which
the leadership team will set out more information on BP’s
strategy and near-term plans.
