BP Pivots Away From Renewables Pledge After Disappointing Earnings

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BP’s CEO plans on tuning down the company’s shift to renewables, The Wall Street Journal reported Wednesday.

BP CEO Bernard Looney has expressed disappointment in their recent investments into the renewable energies space, according to the report. Notably, BP bought Archea Energy for $4.1 Billion for the purpose of growing the company’s footprint in the green energy sector.

The CEO reportedly plans to shift away from their environmental, social and corporate governance goals, commonly known as ESG, due to the poor performance of renewables. BP claims their goal is to become carbon neutral by 2050 or sooner with benchmark goals set for 2025 and 2030.

Looney this as a “course correction” rather than a longterm strategy change for the company, according to the WSJ.

The company has faced intense scrutiny from shareholders, frustrated that BP has lagged behind rival Exxon Mobil, which has stuck closer to oil and gas rather than pivoting to renewables. Furthermore, BP has been pressured by the European government to move away from traditional oil and gas extraction renewables over climate change and environmentalism concerns.

BP initially announced a plan to reduce oil and gas production by 40% in 2030 from the 2019 levels.

BP claims that oil will make up a dramatically smaller part of global energy consumption by the year 2050. The shift to renewables would thereby keep the company globally relevant in a changing world.

In a recent statement, Spencer Dale, Chief Economist of BP, also addressed the difficulties and nuances that come with transitioning from fossil fuels by highlighting the Russian invasion of Ukraine.

“Global energy polices and discussions in recent years have been focused on the importance of decarbonizing the energy system and the transition to net zero.” Dale said. “The events of the past year have served as a reminder to us all that this transition also needs to take account of the security and affordability of energy.”