Shareholder Group Urges BP and Shell to Address Falling Oil Demand

• Follow This requests BP and Shell publish 10-year reports detailing capital expenditure, production plans, and cash flow projections under declining demand scenarios, including IEA forecasts that predict oil demand could peak around 2030
• Previous climate resolutions achieved only 20% investor support at BP and around one-third at Shell, compared to 80% at Phillips 66, prompting the group's shift in strategy
• Both BP and Shell have recently scaled back renewable energy commitments to focus investment on oil and gas projects, making the demand for decline scenario planning more pressing

Summary

Climate activist group Follow This has filed shareholder resolutions urging BP and Shell to disclose value creation strategies in the event of declining global oil and gas demand. The move represents a strategic shift for the Dutch organization, which suspended its nearly decade-long campaign for emissions cuts in April 2024 due to insufficient investor support.

The resolutions request both energy majors to publish reports covering at least 10 years, detailing capital expenditure, production plans, and free cash flow projections under declining demand scenarios, including those from the International Energy Agency (IEA). The initiative is backed by investors managing approximately €1.5 trillion ($1.75 trillion) in assets, including Achmea Investment Management, the Ethos Foundation, and several European local pension funds.

This campaign follows mixed results from Follow This's previous emissions-focused resolutions. Investor support reached roughly 80% at Phillips 66, 60% at Chevron, around one-third at Exxon and Shell, and only 20% at BP.

Both BP and Shell have recently scaled back renewable energy commitments to prioritize oil and gas investments, aligning with broader industry trends. The timing coincides with evolving IEA projections: the agency expects oil demand to peak around 2030 under scenarios incorporating proposed policies. However, under a baseline scenario reflecting only existing government policies without climate aspirations, the IEA now projects continued growth in global oil and gas demand through 2050.

The resolutions highlight growing investor concerns about energy companies' long-term strategic planning amid uncertain demand trajectories and the energy transition, particularly as major producers double down on hydrocarbon investments despite climate commitments.