BP sets net zero targets for 2050 and plans reorganization to deliver
BP set a new ambition on Wednesday, to become a net zero company by 2050 or sooner and is planning a restructuring to deliver on that commitment and become a more focused and integrated company.
Its new chief executive officer, Bernard Looney, announced the new purpose and a new ambition for the company, saying: “The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero. We all want energy that is reliable and affordable, but that 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.”
More specifically, the company’s was driving to go net zero across all its operations by 2050, including in its oil and gas production and to cut the carbon intensity of its products by half.
It also planned to install methane measurement at all its major oil and gas processing sites by 2023, reduce methane intensity of operations by 50% and increase the proportion of investment into non-oil and gas businesses over time.
“We expect to invest more in low carbon businesses – and less in oil and gas – over time. The goal is to invest wisely, into businesses where we can add value, develop at scale, and deliver competitive returns,” said Looney.
Looney's BP was also intent on helping the rest of the world to get to net zero, saying that it would support more green policies such as carbon pricing, incentivise its staff to meet targets, set new expectations with trade associations and launch a new team to help countries decarbonise.
To do so, BP will need to reorganise and divide its operations into groups but it vowed that it was committed to performing as it has while at the same time transforming into something better for the future.
Looney added: “We need to reinvent BP. Our historic structure has served us well but, in order to keep up with rapidly-evolving customer demands and society’s expectations, we need to become more integrated and more focused. So we are undertaking a major reorganisation, introducing a new structure, a new leadership team and new ways of working for all of us.”
Helge Lund, BP’s chairman, commented: “Energy markets are changing, driven by climate change, technology and societal expectations, and the Board supports Bernard and his new leadership team´s ambition for BP. Aiming for net zero is not only the right thing for BP, it is the right thing for our shareholders and for society more broadly. As we embark on this ambitious agenda, we will maintain a strong focus on safe, reliable and efficient operations and on delivering the promises we have made to our investors.”