Institutional Shareholder Services (ISS), a prominent proxy advisory firm, has advised investors to vote against proposals put forward by BP's board that would withdraw two earlier climate-related shareholder resolutions and allow the company to stage shareholder meetings in an online-only format.
ISS framed its recommendation around the legal and governance implications of rescinding measures that previously required BP to produce company-specific climate reporting. The proxy adviser emphasized the exceptional nature of such a revocation in the United Kingdom, saying that overturning the earlier resolutions would need very strong justification.
"A particularly compelling argument would be required to justify such a legal revocation, which we believe is unprecedented in the UK context," ISS wrote in its note regarding BP's resolution to retire two resolutions from 2015 and 2019 that required company-specific climate reporting and which had passed with near 100% support at the time.
ISS also addressed the board's contention that the prior resolutions could be detracting from the clarity of reporting and from standardised disclosures. The advisory group said it did not find the board's explanation convincing enough to outweigh the concerns associated with retiring those previously approved disclosures.
"We do not consider the Board’s argument that the prior resolutions detract from the clarity of reporting and standardised disclosures to constitute a sufficiently compelling case to offset the concerns for 'retiring' the relevant disclosures," the analysis said.
Alongside the recommendation on the climate reporting resolutions, ISS included the online-only meeting proposal in its guidance to shareholders, recommending a vote against allowing the company to hold general meetings solely in a virtual format. The note seen by Reuters framed both items together when explaining the advice to investors.
The two resolutions targeted for retirement were originally adopted in 2015 and 2019 and required BP to provide company-specific climate-related reporting. At the time of their passage, each received support nearing full shareholder approval.
Separately, material circulated to investors referenced tools that evaluate companies such as BP using multiple financial metrics and historical performance examples, positioning those resources as ways for investors to assess whether BP fits particular investment strategies. Those materials noted the use of large metric sets and past outcomes for screening purposes.
Contextual note: This report is based on the advisory analysis and the statements contained within the ISS note regarding BP's resolutions and the company's meeting format proposal.