Daily ESG Briefing: BP pledges to slash oil & gas production by 40% by 2030

The latest developments in sustainable finance

Oil giant BP has unveiled a new strategy which will see it cut oil and gas production by 40% within 10 years. The firm said it will move “from being an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers”. The strategy also commits BP to increasing its annual low-carbon investment 10-fold over the next decade, to some $5bn annually, "building out an integrated portfolio of low carbon technologies, including renewables, bioenergy and early positions in hydrogen and CCUS”; and its renewables capacity by 20-fold from 2019 levels. On hearing the announcement, Mark van Baal of campaign group Follow This described BP as “the first oil major that walks the walk instead of just offering ambitions for 2050, like its peers”. According to Link Group, BP’s dividends fell by 57.2% in Q2 of 2020 – the lowest since 2010. 

More than 90% of global public investors either have, or are in the process of developing, specific ESG investment policies, according to a survey from BNY Mellon and the Official Monetary and Financial Institutions Forum. The findings are based on two surveys: one from earlier this year, which heard from 50 central banks, 11 sovereign funds and 17 pension funds; and a second from last year, hearing from 27 sovereign and pension funds. The biggest barriers to integrating ESG are data, “complexity” and existing mandates, according to the responses.

Alphabet, the owner of Google, has sold $5.75bn in sustainability bonds – the biggest corporate issuance of green or sustainable bonds to date. The deal was part of a broader $10bn offering, and proceeds will be used to fund organisations that support black entrepreneurs, SMEs hit by Covid, affordable houses and green energy, among other things. 

Axa IM, Bank of China, BNP Paribas, BlackRock, and Barclays are among the 18 members of the newly-created Sustainable Bond Market Advisory Group from the London Stock Exchange. The coalition will act as a forum for market participants to provide input on the Exchange’s sustainable bond market, and act as a consultative body on future developments. Membership will be reviewed every two years.

The International Securities Lending Association and its Council for Sustainable Finance have responded to the European Commission’s consultation on its Renewed Sustainable Finance Strategy. The consultation, which will inform the EU’s next policy package on sustainable finance, ran from 8 April 2020 to 15 July 2020.

New Zealand has published its first national climate change risk assessment, created by a group including infrastructure firm AECOM, Tonkin & Taylor and the National Institute of Water and Atmospheric Research. The assessment aims to assist the Government in identifying where it needs to prioritise action in its national adaptation plan, slated for August 2022.

More coal-fired power plants were closed down than were opened in the first six months of 2020, according to US research and advocacy group, Global Energy Monitor. However, China approved the highest number of new plants in the first six months of this year since 2016.