BP (bp) – along with Shell, Equinor, and other oil and gas companies – has announced it will be reducing investment into renewable energy, refocusing on oil and gas production.
Oil and gas investment is expected to increase by $10bn a year while renewable energy programmes will have investment cut by approximately $5bn. This comes after investors expressed dissatisfaction with company profits and share price.
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However, moves such as this come at a very serious cost to our collective ability to reduce global carbon emissions.
Once again, we are reminded that a company’s obligations are to its shareholders. bp’s words of commitment to moving ‘Beyond Petroleum’ – as Lord Browne once put it – have proven to be just words after all. Despite their extraordinary and disproportionate impact on the quality of life of the public, oil and gas companies have shown that they cannot make more than one solemn promise.
Commitments to net zero are shown once more to be fickle and expendable in the face of shareholder pressure to make more money quickly. Of course, this is hardly surprising, but it does leave one wondering what alternatives there are.
One such alternative could be public ownership of energy production, oil and gas included. This addresses the first issue of accountability. As companies are only truly accountable to their shareholders, perhaps we should make everyone a shareholder.
It is clear that private profit-generating interests exist in opposition to long-term environmental sustainability and the collective interests of the public.
However, through public ownership, these objectives become more greatly aligned. Initiatives such as Great British Energy proposed by the British government are an example of what such ownership structures could look like, investing in renewable energy and owning and operating renewable energy projects.
Another alternative could be to make commitments to net zero legally binding or otherwise put in place more stringent processes for changing them. This could go some way to ensuring a higher level of public accountability and would ensure that a company does not make commitments and then renege on them as soon as it becomes inconvenient to keep to its word.
That kind of behaviour erodes trust, not just in the companies themselves, which might be reflected in their share prices, but also in the principles of net zero at a time when major political forces do not believe in it or even in climate change. That kind of behavior has potentially dangerous consequences and it is worthwhile considering that enforcing corporate responsibility would be the responsible thing to do.
These are just two measures that can be taken. Though they may be necessary, it would be preferable if companies were to demonstrate their own responsibility on the matter of environmental sustainability.
Of course, oil and gas companies such as bp are in a difficult position, their industry being uniquely damaging to environmental sustainability. However, as Sir Ian Cheshire has said to the British Broadcasting Corporation: “The science hasn’t changed”.
The future must be in renewable energy, not fossil fuels. If oil and gas companies want there to be an energy market left, or indeed any sort of market at all, they need to realise that future as soon as possible.
This is a matter not just of the future of the habitability of this planet but also the viability of their own companies. If bp wants to exist in another 100 years, it needs to realise the future of renewable energy as soon as possible.
Moving to increase investment in oil and gas while reducing investment in renewables demonstrates that the company cannot be trusted with its own future, let alone everyone else’s. So perhaps it is time that responsibility was put into different, more accountable hands?
