BP could scrap climate plans amid pressure to boost profits

February 21, 2025

BP may withdraw its climate plans as shareholder pressure to boost profits intensifies, especially after activist investor Elliott Management acquired a £3.8 billion stake.

Elliott's stake makes it BP’s third-largest shareholder, giving it leverage to push for a business overhaul. The investor is expected to urge BP to follow other oil majors like Shell by cutting renewable energy spending and selling off non-core assets.

The move comes as the former CEO Bernard Looney embraced net-zero emission goals. However, recent weak profits and performance have increased pressure on new CEO Murray Auchincloss to implement a strategic overhaul.

As such, BP is reportedly exploring the sale of its lubricants business, which operates under the Castrol brand—one of the assets Elliott has flagged for potential disposal.

The Castrol brand serves customers in more than 150 countries in the automotive, marine, industrial, aerospace and energy production sectors. Recently, the brand has expanded into developing liquid cooling technology to help with the issue of overheating at data centres.

Ahead of BP’s strategy meeting, it is expected to scale back its renewable energy commitments. Instead, the company is likely to refocus on oil and gas production to boost its share price and profits.

However, nearly 50 investors, including Scottish Widows, Hargreaves Lansdown, and Royal London, have urged the oil giant to allow them to vote on its plans.

In a letter to BP, the investors reminded the company that it had previously offered a shareholder vote on its transition strategy, and they expect the same level of accountability for any future significant strategic changes.

Elliott is known for acquiring large stakes in underperforming companies and pushing for changes through management and strategic overhauls. For example, the firm recently proposed removing eight members of Southwest Airlines’ board and replacing them with its own candidates.

The move came as Elliott, one of Southwest’s largest shareholders with a 10% stake, argued that the airline's poor performance made new leadership essential.

However, the airline rejected the proposal, branding it an “unnecessary and inappropriate” attempt to “maximise disruption.”

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