Global oil and gas major BP is to double down on clean energy investments and create a new low carbon power business unit amidst a “fundamental” reorganisation of its business, aiming to become net zero by 2050.
New chief executive Bernard Looney, who officially succeeded Bob Dudley last week, today (12 February) unveiled a major new strategy as the O&G giant intends to attain net zero status – effectively reducing or offsetting all of its carbon emissions – “by 2050 or earlier”.
Key to this strategy, Looney said, will be the re-organisation of BP into four specific business areas, one of which centred around gas and low-carbon energy.
BP will also look to significantly ramp up its investments in clean energy companies, Looney stating that the firm would look to “invest wisely into businesses where we can add value, develop at scale, and deliver competitive returns”.
Late last year BP increased its stake in global solar developer Lightsource BP to 50%, nearly two years to the day since it first acquired a 43% holding in the firm. Since then, Lightsource BP has increased the number of markets it operates in and established a target of deploying 10GW of solar PV by 2025, turning the company into one of the world’s largest developers.
New net zero ambitions of former upstream solar player
BP of course has a longer relationship with solar PV than its Lightsource stake, having previously tried to crack the upstream market. Those attempts ceased in 2011 when BP Solar was shuttered and the company formally announced its departure from solar PV manufacturing.
Looney said the world needed a “rapid transition to net zero”, commenting that energy that is just reliable and affordable 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.”
But while BP would appear to have scaled up its ambition with its net zero pledge, it comes with a major caveat. BP has also today said it would not change the company’s fundamental commitments, which include delivering on the company’s investor proposition and to grow shareholder distribution.
Green groups have responded quickly to the announcement, condemning BP for what they have labelled as an “inadequate and cynical” announcement.
Rachel Kennerley, climate campaigner for green campaign group Friends of the Earth, said: “It’s an obvious, bare-faced act to maintain their dirty business and it’s this short-sighted vision that has contributed to the crisis we face.”
More to follow…