By Rosemary

Influential proxy advisory firm Institutional Shareholder Services has recommended that investors vote against a proposal by BP to withdraw longstanding climate reporting commitments, signaling a rare and notable challenge to the company’s board ahead of its upcoming annual meeting.

The recommendation, outlined in a detailed analysis circulated to clients, places ISS in opposition to BP’s leadership at a critical moment, as shareholders prepare to vote on whether to revoke two climate-related resolutions originally adopted in 2015 and 2019. Those measures, which received overwhelming backing from investors at the time, require the company to provide specific disclosures on its climate strategy and related risks.

Proxy advisory firms such as ISS play a significant role in shaping the outcome of shareholder votes, particularly among large institutional investors that rely on their guidance. It is relatively uncommon for such firms to directly oppose board recommendations on governance matters, making the stance taken in this case particularly consequential.

BP’s board has argued that the reporting requirements tied to the earlier resolutions have effectively been overtaken by more comprehensive, standardized disclosure frameworks that have since been introduced across the industry. According to the company, maintaining the older commitments could create redundancy and potentially reduce clarity in its reporting, given the evolution of global standards.

However, ISS rejected this reasoning, stating that the board had failed to present a sufficiently compelling justification for removing the resolutions. The advisory firm emphasized that revoking previously approved shareholder mandates is highly unusual, particularly within the United Kingdom, and warned that doing so without strong rationale could raise broader governance concerns.

In its assessment, ISS noted that the argument put forward by BP—that the legacy resolutions detract from the clarity of newer disclosures—does not adequately address the potential risks associated with eliminating them. The firm suggested that maintaining these commitments remains important for transparency and accountability, especially given the growing scrutiny of corporate climate strategies.

For the proposal to pass, BP must secure at least 75% support from shareholders at its April 23 annual general meeting. This represents a high threshold, particularly given the near-unanimous approval the original resolutions received when they were first introduced.

BP has indicated that, even if the resolutions are withdrawn, it will continue to report climate-related information in line with widely recognized frameworks, including those established by the Task Force on Climate-related Financial Disclosures and other regulatory requirements. The company maintains that these frameworks provide more consistent and comparable data for investors.

The dispute comes amid a broader push by a group of environmentally focused investors to strengthen BP’s climate commitments. Although these investors collectively represent a relatively small share of the company’s ownership—less than 0.5%—their campaign has gained visibility and momentum. The effort has been spearheaded by Follow This, which has been active in advocating for stricter emissions targets and enhanced corporate accountability across the energy sector.

In addition to its stance on the climate reporting resolutions, ISS has also recommended that shareholders vote against a separate proposal that would allow BP to hold fully virtual annual meetings. The advisory firm raised concerns about the potential impact on shareholder engagement, suggesting that online-only formats could limit opportunities for direct interaction between investors and company leadership.

The outcome of the upcoming vote is expected to serve as an important indicator of investor sentiment toward BP’s governance practices and its approach to climate-related disclosures. It also highlights the increasing influence of shareholder advocacy and proxy advisory firms in shaping corporate policy, particularly on issues related to environmental responsibility and transparency.