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BP Shareholders Suggested to Oppose Follow This' Climate Plan
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BP plc (BP - Free Report) shareholders have been suggested by investor advisers — ISS and Glass Lewis — to oppose a climate plan submitted by the activist group, Follow This.
In December, Follow This filed resolutions with six major institutional investors managing assets worth $1.3 trillion.
Follow This expects BP and other energy companies to reduce absolute carbon emissions by 2030, in line with the Paris Agreement. These involve Scope 3 emissions, which account for the majority of emissions.
Per Glass Lewis, the Follow This resolution fails to recognize the serious uncertainty and difficulty in managing and measuring Scope 3 emissions. Glass Lewis believes that the company should be shown some degree of latitude regarding refining and specifying its targets.
BP has set an aggressive energy transition plan to capitalize on the mounting clean energy demand. In a decade, BP has set an ambitious goal of developing 50 gigawatts (GW) of net renewable energy generating capacity, representing a massive improvement from the 2.5 GW capacity that the company has developed so far.
BP was the first supermajor oil company to define what its energy transition would entail. Other oil majors followed with commitments of their own. In February, BP backed out on plans to reduce oil and gas production and associated emissions.
The proposal will represent a change in strategy from the board’s approach, a potential constraint on the board to develop and implement a strategy. In reaction to investors’ advices, Follow This believes that the decision is best for the company than the global economy.
Price Performance
Shares of BP have outperformed the industry in the past six months. The stock has gained 33.1% compared with the industry’s 14.8% growth.
Enterprise Products Partners’ (EPD - Free Report) fourth-quarter 2022 adjusted earnings per limited partner unit of 65 cents beat the Zacks Consensus Estimate of 60 cents. Strong quarterly earnings were driven by higher contributions from the NGL, and Natural Gas Pipelines & Services businesses.
Enterprise Products Partners is strongly committed to returning cash to shareholders. EPD’s board of directors increased its cash distribution to 49 cents per unit, suggesting a 3.2% hike from the last paid-out distribution of 47.5 cents.
Oceaneering International, Inc.’s (OII - Free Report) fourth-quarter 2022 adjusted profit of 6 cents per share missed the Zacks Consensus Estimate of a profit of 17 cents. The underperformance was due to weaker results in certain segments.
For 2023, Oceaneering projects consolidated EBITDA of $260-$310 million and a free cash flow generation of $75-$125 million.
Cactus, Inc. (WHD - Free Report) reported fourth-quarter adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 51 cents. Strong quarterly earnings were primarily driven by increased drilling activity by customers, offset partially by higher total expenses.
At the fourth-quarter end, Cactus had cash and cash equivalents of $344.5 million, which can provide it with immense financial flexibility. Cactus had no bank debt outstanding as of Dec 31, 2022.
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BP Shareholders Suggested to Oppose Follow This' Climate Plan
BP plc (BP - Free Report) shareholders have been suggested by investor advisers — ISS and Glass Lewis — to oppose a climate plan submitted by the activist group, Follow This.
In December, Follow This filed resolutions with six major institutional investors managing assets worth $1.3 trillion.
Follow This expects BP and other energy companies to reduce absolute carbon emissions by 2030, in line with the Paris Agreement. These involve Scope 3 emissions, which account for the majority of emissions.
Per Glass Lewis, the Follow This resolution fails to recognize the serious uncertainty and difficulty in managing and measuring Scope 3 emissions. Glass Lewis believes that the company should be shown some degree of latitude regarding refining and specifying its targets.
BP has set an aggressive energy transition plan to capitalize on the mounting clean energy demand. In a decade, BP has set an ambitious goal of developing 50 gigawatts (GW) of net renewable energy generating capacity, representing a massive improvement from the 2.5 GW capacity that the company has developed so far.
BP was the first supermajor oil company to define what its energy transition would entail. Other oil majors followed with commitments of their own. In February, BP backed out on plans to reduce oil and gas production and associated emissions.
The proposal will represent a change in strategy from the board’s approach, a potential constraint on the board to develop and implement a strategy. In reaction to investors’ advices, Follow This believes that the decision is best for the company than the global economy.
Price Performance
Shares of BP have outperformed the industry in the past six months. The stock has gained 33.1% compared with the industry’s 14.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Enterprise Products Partners’ (EPD - Free Report) fourth-quarter 2022 adjusted earnings per limited partner unit of 65 cents beat the Zacks Consensus Estimate of 60 cents. Strong quarterly earnings were driven by higher contributions from the NGL, and Natural Gas Pipelines & Services businesses.
Enterprise Products Partners is strongly committed to returning cash to shareholders. EPD’s board of directors increased its cash distribution to 49 cents per unit, suggesting a 3.2% hike from the last paid-out distribution of 47.5 cents.
Oceaneering International, Inc.’s (OII - Free Report) fourth-quarter 2022 adjusted profit of 6 cents per share missed the Zacks Consensus Estimate of a profit of 17 cents. The underperformance was due to weaker results in certain segments.
For 2023, Oceaneering projects consolidated EBITDA of $260-$310 million and a free cash flow generation of $75-$125 million.
Cactus, Inc. (WHD - Free Report) reported fourth-quarter adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 51 cents. Strong quarterly earnings were primarily driven by increased drilling activity by customers, offset partially by higher total expenses.
At the fourth-quarter end, Cactus had cash and cash equivalents of $344.5 million, which can provide it with immense financial flexibility. Cactus had no bank debt outstanding as of Dec 31, 2022.