BP p.l.c. (BP) Earnings Call Transcript & Summary

[Presentation] Well, good morning, everyone, and welcome to the 111th Annual General Meeting of BP p.l.c. Thanks for joining us. My name is Ian Davis. I'm the BP p.l.c. Senior Independent Director and duly appointed chairman of the meeting. On the 7th of May, we announced that in these unprecedented times and for the safety of our people and shareholders, we would be holding our AGM today as a closed meeting at our offices in St. James's Square. Unfortunately, this has meant that we are not able to permit shareholders to join the AGM other than to meet the minimum quorum required by our Articles of Association. Our aim at this slide webcast is to make the occasion as open, accessible and informative as is reasonably possible within the current restrictive circumstances. And to those of you who had ordinarily have attended the AGM in person, may I express our appreciation for your understanding at these times. Unfortunately, due to continuing current travel restrictions, Helge Lund, Chairman of the BP Board, is not able to attend today's meeting in person and instead joins us via video link from his home in Norway. In his absence from the venue, the Board has asked that I act as the Chair of the meeting. I'll shortly pass over to Helge for him to say a few words. But before I do, I would like to confirm that we have a quorum present here at St. James's Square and the 2020 BP p.l.c. AGM has been duly convened. Today, we're putting forward 23 resolutions. These are set out in the Notice of Meeting. I would like to start by formally proposing all those resolutions. As part of the meeting today, we'll be hearing from our new CEO, Bernard Looney, and addressing some of the questions submitted by shareholders prior to the meeting. But first, I'd like to hand over to Helge Lund to say a few words.

Ian, thank you for that introduction and for agreeing to act as the Chair of this meeting during my enforced absence from London. And thank you also to my fellow directors who are joining us on this webcast. And overall, thank you to our many shareholders for your continued support and interest in our company. And I welcome those of you who have joined today's meeting via the webcast. Over the past year, I have been able to participate in a great number of constructive meetings with so many of you, including in the run-up to this AGM. Of course, this is not how we envisaged conducting this year's Annual General Meeting. In fact, we had a venue booked for today, but this was repurposed as London's temporary COVID-19 critical care hospital. That is itself one illustration of the challenge facing the world in this moment. In our company's 111 year history, we have held AGMs before in turbulent times: during world wars, oil shocks, depressions and recessions. Well, we meet again this morning amid a simultaneous worldwide pandemic and global economic downturn and in the wake of both demand and supply side oil shocks. Together, these factors create one of the most challenging operating environments BP has ever faced. The primary cause, the COVID-19 pandemic is, first of all, a human tragedy with at least 1/3 of a million lives lost so far. And it is a human tragedy with severe economic consequences. Global trade has slowed, businesses have gone under, jobs have been lost as billions of people experience lockdown. All that has affected BP, our employees and, of course, you, our investors, who have seen a fall in the value of the shares you hold. In part, that fall reflects the deep connection between BP's products and the strength of the global economy. The BP Board and leadership team are working closely together as we actively respond to market conditions. We have been through tough times before. Last month, we marked the 10th year anniversary of the tragic Deepwater Horizon incident. We learned a lot from that experience, about the need to become a safer company and also about how to manage crisis and to recover from it too. As our opening video set out today, we are applying that experience as we focus on our 3 objectives of protecting our people, supporting our communities and strengthening our finances. Of course, near-term challenges, even severe challenges do not deflect us from our strategy. Our focus on delivering long-term value for our shareholders is undiminished. Indeed, as many of you will have seen, earlier this year, we began the process of transformation for BP and that process has continued. We have a new purpose to reimagine energy for people and our planet. We have a new ambition to reach net zero by 2050 or sooner and to help the world get there too. We have 10 aims underpinning our ambition, and we have a new CEO, Bernard Looney, who joins us today. And I would like to say how pleased I am to have Bernard leading the company, and Bernard has led much of the thinking of BP's new direction after a long period of reflection and consultation with employees, investors, governments and many others. And now like Bob before him, Bernard has the firm backing of the board as does his new leadership team. Of course, some may wonder if the pressures we now face mean our transformation should be postponed. Well, we draw a different conclusion. The experiences of recent weeks have focused minds on the need to become a different kind of energy company. Though economic well-being should return, we may find the post-virus world a different world, one in which expectations of the energy transition are higher. In a moment, Bernard will say more about what we might see as the world recovers from the pandemic. Along with our focus on strategy, we have also made progress on the effectiveness of your board. During the past year, I've sought to run BP's Board in an inclusive, collaborative and transparent way. This year, we are making further changes, structuring agendas around the 4 pillars of strategy, performance, people and governance. We introduced these changes to better support BP's new purpose and vision. But they've already helped us manage the immediate challenges of the pandemic and its consequences. Before I hand over to Bernard, I want to close by thanking BP's employees for the way they have responded in recent months. We have thousands of people on our front line, providing the energy that keeps the world moving and the lights on, oil rigs, refineries and in retail stations. They are supplying the fuel and food our communities need, supported by their colleagues working from home. Their response has been everything I would expect from BP, in many cases, going far beyond the call of duty. They have been a credit to the company during this crisis, just as they have been in support of our plans for reinventing BP. And finally, I again thank our shareholders. We are grateful for your continuing faith in our company. In the weeks, months and years to come, we seek to repay that faith while meeting the opportunities of the world's changing energy needs. So thank you.

Well, thank you, Helge. We'll be hearing more from Helge a little later on when we move to answering shareholder questions submitted prior to the meeting. And now I'd like to hand over to our CEO, Bernard Looney.

Thank you, Helge, and thank you, everyone, online for joining us. And thank you also to Ian and to our company secretary, Ben Mathews. Despite the challenges, we are meeting today, thanks to outstanding contingency planning by you and our teams. I'm enormously grateful for everything that you are doing and the efforts you have gone to. Today's event is an important one for 2 reasons. First, this is my first meeting as your chief executive, and you'll understand that I am fully focused on delivering on Helge's and the Board's expectations. Second, this meeting is an important opportunity for us to listen and learn. I'm under no illusion we are accountable to you, our shareholders. We never forget who owns the company. Last year, you asked us for more disclosure by means of the special resolution proposed by Climate Action 100+. We listened and we learned. The Board supported the resolution and we acted on your advice. I personally continue to value and benefit from our ongoing engagement with Climate Action 100+ and the investors it represents. We welcome and appreciate the statement of support they made earlier this week, both for our net zero ambition and our response to the COVID pandemic. I look forward to continuing the helpful dialogue we have been established with them. And also to continuing discussions would follow this as outlined in our joint press release earlier this year. Also last year, when we met in Aberdeen, we heard from a shareholder called Jo Alexander. Jo used to work for BP for 10 years, in fact, but left 5 years ago. She said she felt at the time that BP's corporate purpose was not consistent with her inner purpose. We met with Jo later in the year, and we talked about the plans we were developing for BP, for the new purpose and the ambition that Helge just mentioned. I'm delighted that Jo decided to rejoin the company to help us deliver those plans. Jo is rejoining a company full of good people trying to do good things that has never been clearer than today in their response to the COVID-19 pandemic. I remain in awe of how our colleagues have stepped up to care for each other, to help their communities and to strengthen BP's resilience. As you saw in the film and in this slide, the BP team is truly living our new purpose: to reimagine energy for people and our planet. And it's a huge privilege to support them in this role. It is a responsibility I never imagined when I joined BP 28 years ago. I love the company, your company, and I'll do everything I can to keep it safe and successful. We are taking calm, decisive action. We have a clear direction of travel for the future. And we are committed to delivering for you at all times. Let me talk briefly about each of those 3 things. But before I do that, let me first of all pay my own tribute to Bob Dudley and to Brian Gilvary for their outstanding leadership for the last decade. Their stewardship means we entered the current brutal environment with good operating momentum and financial discipline, strong liquidity and extensive optionality in our portfolio. That is reflected in the underlying profit of $10 billion we reported for 2019 and in the operating cash flow of $26 billion. Of course, today's challenge is of a different scale than any experience before. Demand for our products has fallen further than ever. We have an excess of supply in the market, and measures to combat the virus have added complexity. In the face of this, our people have been performing heroically, especially those on the frontlines of the business, keeping our retail sites open and running our platforms, our refineries, plants and trading and shipping operations. Their capability and remarkable courage gives us confidence in our resilience. And we are in action to strengthen the financial health of BP, reducing our capital expenditure by 25%, targeting $2.5 billion of cost savings by 2021 compared with 2019, and building a wall of liquidity which currently enables us to access around $32 billion of cash and undrawn facilities. Through our actions, we aim to lower BP's cash balance point to below $35 a barrel in 2021. Importantly, that figure assumes lower gas prices and refining margins. And we are taking these actions, mindful of our people and the need to keep them safe and well, nothing is more important; mindful of the communities where we all live and work, we want to help where we can; and mindful also of you, our shareholders, who expect value from your investments. At the same time, we are maintaining momentum on the plans for reimagining energy and reinventing BP that Helge has just spoken about. The more we understand the current situation, the more I am convinced that the decisions we took in February are right for 3 reasons: increasing uncertainty surrounding the future demand for oil and volatility in oil markets; increasing awareness of the fragility of the world we live in and of the opportunities to build back better, greener and more resilient; increasing attractiveness of stable returns from some renewables to which capital has continued to flow. This, at a time when some oil contracts turned negative as they did last month for a day for the first time in history. We set a direction of travel in February for BP to be a leaner, faster-moving, lower carbon company. We're making good progress with this transformation, and I look forward to sharing more details when we host a Capital Markets Day in September. Let me finish by emphasizing how committed we remain to performing while we transform BP. We are in action for the near term in response to the current environment, and we are transforming for the future to enable BP to deliver the reliable, affordable, low-carbon energy the world wants and needs. But we do so fully focused on the fundamentals that have served us so well: safe and reliable operations and our commitments to you, our shareholders. We are operating in an environment of greater uncertainty that any time most will recall, but we are in action, not just to weather the storm, but to emerge transformed and stronger for the opportunities ahead in the energy transition and our net zero ambition. Thank you, and back to you, Ian.

Thanks, Bernard. We invited shareholders to submit questions for the company before today's meeting. Thank you very much to all of those shareholders who have submitted questions. We would address these now, and we will host answers to those questions on our website as soon as possible after the meeting.

Our first group of questions relate to BP's response to the current operating environment. And what we've been -- what we have seen and heard regarding BP's response to the COVID-19 pandemic and the volatility in energy markets. The first question is from [ Tom Gowers ], an ordinary shareholder based in Australia. Can BP still deliver the ambition and aims it set out on the 12th of February? I'd like to ask Helge to comment on this and the perspective of the Board first and then hand over to Bernard. Helge?

Thank you, Ian, and thank you, [ Tom Gowers ] for the question. As a Board, we are focused on the governance of the company, and we have been meeting weekly since the COVID-19 crisis started, mindful of the exceptionally challenging circumstances. The effects of the pandemic have hit hard, really hard, and we want to help where we can. We are taking action to help those in need and what you see is BP putting our purpose to action. I believe this unwavering focus on our purpose is crucial as we work to deliver our net zero ambition. And Bernard, is there anything you would like to add?

Thanks, Helge, and thanks to [ Tom ] for the question. It is a good question, and it's one that I have heard a lot of recently. Before the pandemic, people all over the world were wanting the same thing, reliable, affordable energy that is cleaner. And the pandemic is offering all of us a look at what a different path might look like, clearer skies, cleaner airs and cities. So to [ Tom's ] question, does the pandemic crisis deepen or weaken our commitment to the ambition we set out in February? For me and for the Board, it deepens it and it can accelerate our transformation. And as a leadership team, [ Tom ], we remain focused on delivering those plans for the reinvention of BP and building of new business models to meet those changing demands. And as an example, we just recently announced the next stage of our reorganization. So in summary, we remain absolutely committed to what we set out on the 12th of February.

The next question from [ Charanjit Singh Kooner ] asks how will BP change its remuneration packages for senior employees as well as its contribution to society to keep pace with the new normal? I'd like to invite the Chairman to answer the first part of this question.

Thank you, Ian. At this stage, our focus is on the safety of our workforce, suppliers and customers and on lending our support where we see greatest need. Remuneration matters will be considered at the appropriate time as the impacts of the pandemic become clearer and we understand more fully the implications of any new normal. Until that clarity emerges, a decision on remuneration packages will be premature. Of course, the decisions we take will be made in line with our remuneration policy, which though it was designed pre-COVID-19, is adaptable to changing external factors such as the pandemic. And critically, the remuneration committee will exercise oversight and judgment in all decisions. And Bernard, you might want to address the second part of the question.

[ Charanjit ], thank you. As I said, earlier, I am really in awe of how our colleagues in BP have been responding to the crisis. We've got thousands of good-hearted people, and they are doing amazing things, I think, for their communities around the world. And I think it is important to say that as a company, we're not doing this because we feel under pressure to do so. We're doing it because it's the right thing to do. It's how we live our purpose. There are many examples of BP people stepping up, providing free fuel and discounts to emergency services, vehicles and workers as you saw on the video, donating PPE to health services, donating use of our supercomputer in Houston to aid researchers and donating ethanol from our biofuels production for sanitizers. And I believe strongly that how companies support their communities really matters. And that is not just over the coming weeks and months. It's for the long term as we rebuild and recover during what is being talked about, and as you said, as the new normal. So we're thinking really hard about your question of how we can contribute to building back better, greener and more resilient.

Thanks, both. I'd just like to add personally that although not related to our remuneration policy, both Helge and Bernard have pledged to donate 20% of their salaries for the remainder of 2020 to mental health charities of their personal choice. In addition, BP has confirmed that it will pay all directly employed U.K. retail employees the real living wage with effect from the 1st of August 2020. This rate is set by the Living Wage Foundation. I believe this recognizes the importance BP places on its frontline employees who serve millions of customers and bring the purpose and values of BP to life day in and day out. I'd now like to turn to our next question, which concerns BP's environmental remediation provision. [ Andrew Evans ] asked what this provision covers? Bernard, perhaps you could respond to this.

Thanks, [ Andrew ], for your question. And just for those who may not be familiar with what remediation is, it is about the places where we have been active and it's about restoring them. As it says on the ID badges, our identification badges here at work that all of us have at BP, our safety and environmental goals are no accidents, no harm to people and no damage to the environment. And in terms of the activities covered by remediation, it ranges from removing soil or pumping out groundwater that might have become contaminated to using biological processes or settling ponds to target and degrade pollutants. In 2019, [ Andrew ], our provision for remediation was just over $250 million across the 1,200 sites that we are responsible for, which is less than 1/3 of the number in 2006, mostly as a result of closing old operational sites. Of that $250 million, just under 2/3 went towards progressing sites to closure, about 20% went to remedial investigation at new and existing sites, and about 15% went to the monitoring of operations and the maintenance of current sites. I hope that helps, [ Andrew ].

Our next question is from [ Robert Gerasimas ], who asked if BP will follow Royal Dutch Shell by reporting renewable energy losses as a separate line in the quarterly earnings release? Bernard, over to you.

Thanks. Thanks, [ Robert ], for the question. Firstly, it's not really for us to comment on other company's reporting. I think you can understand that. But what I can say is that we set out in February on a multiyear journey, one that will see us investing more and more in renewables over time and less and less in oil and gas as we position ourselves for the future and reinvent BP. And as part of that process, we are reviewing how we will report to your question, how we will report externally to reflect our new organizational structure with the aim of doing so from the first quarter of 2021. And of course, our disclosures will continue to comply with IFRS 8 operating segments. Back to you, Ian.

A number of shareholders have asked about the BP dividend. Firstly, [ Benjamin George ] asked will BP cut the dividend. Helge?

Yes, I will respond to this one, Ian. And -- but I mean, the Board reviews the dividend each quarter in the context of the circumstances and outlook at that particular time. The factors that we consider include the environment, underlying business performance, the financial outlook and other factors which may vary quarter-to-quarter. We're also mindful of our broad responsibilities to multiple stakeholders, including staff, society and shareholders. The first quarter dividend was reviewed as usual in full, and the decision was supported by the underlying performance of the business in first quarter and the strength of the actions we are taking to strengthen our finances. And the Board will take the same approach when reviewing and making the decisions for future dividends. Thank you, Ian.

Thanks, Helge. There is another question here that you may want to answer from an ADR holder, [ Robert Johnson ]. Why was the scrip program abandoned?

So thank you for your question, [ Robert ]. The Board decided to suspend the scrip program for the third and fourth quarter 2019 and the first quarter 2020 interim dividends. This reflected our continued progress but also our commitment to completing the buyback program we announced in October 2017 to manage the dilutive effect of the scrip program. That buyback program was completed in early 2020. Any decisions with respect to future dividends will be made by the Board following the end of each quarter. Whether a scrip alternative is available will be announced for each dividend and a notice will be published on our website.

We now have 2 questions from shareholders regarding share dealing. [ Sujoy Sen ], an ordinary shareholder has asked when would BP enable shareholders from outside U.K., for example, in India, to sell their shares online? I think Ben, perhaps it's best for you to answer this one.

Yes, of course. And thank you, Ian. I'm delighted to do so. Shareholders resident in the U.K., in the EEA, in the Channel Islands or indeed in the Isle of Man may be able to use the dealing service offered by our registrar. For further jurisdictions, it's not as straightforward. And so I'd recommend shareholders with similar questions refer to the more detailed response on our AGM Q&As, which will be hosted on our website. Thank you, Ian.

And we have another question here that you may also want to address. [ Mark Higginbottom ] would like to ask if BP will reinstate the dividend reinvest plan for non-U.K. shareholders.

Yes, of course, any decisions with respect to future dividends, including whether to offer a scrip alternative, will be made by the Board following the end of each quarter. In instances where the Board elects to offer a scrip dividend, we continue to work with our registrar to expand the list of countries for which scrip is available. I'd recommend that you visit mybpshares.com for a full list of countries where this option is currently available.

Thanks, Ben. Our next question is from Amnesty UK and relates to human rights and whether BP is integrating climate change into its human rights policy and has addressed climate-related human rights impacts of its activities. Helge, perhaps you could address this question.

Thank you, Ian, and let me begin by saying, let's say, we welcome the challenge of others to help us make a positive and sustainable difference to people's lives. No matter where in the world we do business, we aim to do so responsibly, respecting the rights of our workforce and our neighbors. We believe that to be essential to fulfilling our purpose, reimagining energy for people and our planet. As I stated at last year's AGM, we support the UN guiding principles on business and human rights. For people all over the world, the human rights safeguard much of what is most precious to them and their families, their freedom, their way of life and even their identity. If those rights are abused, the personal toll can be terrible and companies have a part to play in preventing that. And I'm pleased to say that our human rights policy, which we have updated this week, sits alongside our net zero ambition and aims. Those set out the ambitious contribution we want to make to help the world get to net zero and which we believe is the right way for us to help address the global issue of climate change. We also want to contribute to sustainable development and are working to do more to support the delivery of the UN sustainable development goals. And we also recognize the importance of a just transition as envisaged by the Paris agreement, one which delivers decent work, quality jobs and supports the livelihoods of local communities. We aim to actively advocate for policies that support net zero. This includes encouraging the use of finance and revenues from carbon pricing to support the just transition.

I will move on to our next set of questions, which relate to BP's role in the energy transition. A number of our shareholders have asked does BP's net zero ambition fall short of being consistent with the Paris goals? I'd like to ask Helge again to respond to this first before passing on to Bernard.

Thank you, Ian. And first, let me say that we, as a Board, are looking forward to working with Bernard and his executive team to meet our new net zero ambition. We remain focused on it even in these uncertain and challenging times. And it is important that we are transparent about the consistency of our strategy with the Paris goals. Those who were with us at last year's AGM might remember that we supported the Climate Action 100+ resolution requiring us to describe, among other things, the strategy that the Board considers in good faith to be consistent with the Paris goals. We did so in this year's annual report, and I think it marks a major step forward for BP. We want to continue to enhance our disclosures in this area and plan to provide an annual review of progress against the elements of the resolution in next year's corporate reporting documents. Bernard, you might want to add.

Yes. Thanks, Helge. I mean this is an enormously important question, and let me just give an example that illustrates how much this issue really does matter, this question of consistency. A few weeks ago, I was on a team's call to our team at our refinery in Toledo in the United States. And this is right in the middle of the pandemic with prices down and demand write-down when people with lots of worries. And our net zero ambition was part of the conversation. And one of the members of the team thanked me for what we laid out on the 12th of February around the energy transition. And I asked him why? And he said, given a choice, I choose my grandchildren every time. So it matters to people that we get this right. We believe that our net zero ambition and the 10 aims that underpin the ambition set out a path that is consistent with the Paris goals. It's important to take the ambition and the aims together because being consistent with the Paris goals is not just about emissions. It's about a company's overall contribution to getting the world to net zero. And that includes activities like advocating for net zero policies, it includes engaging with trade associations to make sure our views on climate change are clear and pursuing opportunities to work collaboratively with those who share the same views. This bigger picture is why we disagreed with an assessment earlier this month by an organization called the Transition Pathway Initiative, TPI. In its report, the TPI suggested that our net zero ambition is not consistent with Paris. And we respectfully disagree. The TPI's analysis focuses heavily on 1 measure. It's called carbon intensity. But by itself, we don't believe that carbon intensity is a reliable single measure of progress towards the Paris goals. This is because total emissions can rise even as carbon intensity falls if the amount of energy supplied and used grows faster than the pace at which the intensity is reduced. And that's a problem because what the world does need is it needs total emissions, absolute emissions to come down. And that's why at BP, we're aiming to become a net zero company through absolute reductions to net zero in our aims #1 and #2. And it's why our aim #3 to have the carbon intensity of our marketed products is supplementary to our absolute reduction aims. And we know that many people want to know more. And we will, as we said in February, come back in September with the next level of detail.

Thanks for that explanation, Bernard. I will come back to you with a question from Sarasin & Partners, which is a bit more technical if you're happy with that. They have effectively asked why the Board believes $70 per barrel and 4 million BTUs are the best estimates when they are not consistent with the global agreement to cap temperature increases to well below 2 degrees centigrade? And why the company has not disclosed what the impact would be on the balance sheet of using a Paris-consistent price set of $50 per barrel, $2 per million BTUs and $11 BBL refining market margin as set out in the strategic report? So quite a technical question perhaps for you, Bernard.

Thanks, Ian, and it's a very good question, and thanks to Sarasin & Partners for submitting it. And the current situation is reminding us if we needed reminding how hard it is to predict what the price of oil is going to be. None of us imagined at the start of the year that the price would be around $30 a barrel in the middle of the year. When we published our annual report in March, the effects of COVID-19 were not well-known or understood. They are still not well-known or understood, and they probably won't be for some time. But COVID-19 has made an uncertain environment even more uncertain. And our assessment at the time of publishing the annual report was that there was uncertainty over the pace of transition to lower carbon supply. And that there was uncertainty about demand and social, political and environmental actions that will be taken to meet the Paris goal. And as is disclosed in the annual report, we considered forecasts and scenarios in which Paris goals are met and those in which the goals are not met. In applying international accounting standard 36, we are required to apply our best estimate of prices when performing impairment tests. And so the prices we applied reflected this uncertainty. Deloitte noted that these prices were reasonable when compared against a range of third-party forecast that represents those forecasters' best estimates. In order to demonstrate the effect of lower price assumptions on the group assets, we also provided 2 sensitivities. And we have always regularly reviewed our price assumptions to ensure they remain appropriate. And we do so more than ever now, given the current circumstances. Regarding the second part of the question, we do not consider there to be a single Paris-consistent price set. Indeed, I think we'd all agree, there are many different pathways to achieve the Paris goals and each of which could result in different prices for oil and gas and refining margins. And the prices detailed in the strategic report are those that we use to evaluate the consistency of new material capital investments with the Paris goals during 2019. And as you would expect, they represented management's view at that time of a low case for long-term assumptions. Back to you, Ian.

Thanks, Bernard. Sarasin & Partners also asked if the Board could confirm how executive bonuses would be impacted if the financial statements were drawn up in a way consistent with the Paris agreement. Helge, perhaps you could address this one.

Yes, thank you, Ian. As I have mentioned in the previous answer, the annual bonus is determined in line with performance in a number of areas, including environmental measures. And the remuneration committee reserves the flexibility to consider the performance measures and their ratings over the 3-year term of our new remuneration policy. And we believe our strategy is consistent with the Paris goals. We see opportunities in helping the world decarbonized through new business models and creating cleaner cities, areas that help form part of our short-term and longer-term executive reward packages. We plan to provide more information on our future strategy and near-term plans at our Capital Markets Day in September 2020. So back to you, Ian.

Continuing on this theme, the Follow This group have contacted us and said, in 2020, they are asking the same 2 questions to every oil major in order to offer shareholders transparency and clarity about the medium-term impact of their climate ambitions. The question's from [ Mark van Baal ] on behalf of Follow This. Firstly, will your climate ambition lead to an absolute emissions reduction for your total yearly scope 1, 2 and 3 emissions by 2030? And secondly, will your climate ambition lead to a fundamental shift in investments away from fossil fuels to renewables of at least 50% annually by 2030? Bernard, perhaps you can address these.

Well, thank you, [ Mark ], for your questions. And indeed, thank you for your challenge, which makes us better. And [ Mark ], I look forward to continuing the helpful dialogue we have going on with you and you're supporting investors and I look forward to BP engaging with you on a possible shareholder resolution for next year's AGM. So while I can't give you the answer right now as we've discussed, you will be aware that this is something that we have been and are working on. And as I have said, we expect to set out more detail on our near and medium-term plans for the next decade at our Capital Markets Day in September. And this is a journey that is going to play out over decades, and we will have more of the answers to your questions as we go along that journey. But we will provide the next level of detail, and we look forward to sharing it with shareholders who can take it into consideration at next year's Annual General Meeting. So thanks, [ Mark ].

We've had 2 questions on behalf of Climate Action 100+. Firstly, could the Chair confirm that in BP's Capital Markets Day in September, it will give more clarity on its short and medium-term targets aligned to the announcement of its net zero ambition? And can the company confirm that this will cover the following areas: planned levels of investment in traditional oil and gas and low-carbon technologies, greenhouse gas emission targets for energy produced and sold scopes 1 to 3, and the links of its various targets to remuneration. We've also had 2 related questions on remuneration from [ Rachel Mander ] from ShareAction. She asks, will BP reassure its shareholders that the annual bonus will not include any direct or indirect growth metrics that incentivize increased fossil fuel production? And will BP explain how it will measure the energy transition metric? Helge, perhaps I could ask you to address the first question and touch on the specific points raised by ShareAction. And then I'll come back to the second CA plus -- 100+, which maybe Bernard could address.

Thank you, Ian, certainly. First, I'd like to Climate Action 100+ and its co-leads, Bruce, Iancu and Sora of EOS at Federated Hermes, LGIM and Aviva for their very constructive challenge and engagement over the past 12 months. As Bernard has set out, we expect to give more detail on our near and medium-term plans for the next decade at the Capital Markets Day in September. It will be an important step in setting out our plans. And as you can imagine, there is a large amount of work underway across the organization to prepare for it. The Board is involved in this work, but it is premature for us to talk about the details at this stage. In terms of the questions relating to remuneration, at this stage, I would also like to thank [ Rachel Mander ] from ShareAction for her question. Let me say, on behalf of the Remuneration Committee that we welcome all dialogue on elements of our remuneration policy. Indeed, our engagements at the end of last year with shareholders highlighted that we should consider balancing our contribution to the energy transition with delivering shareholder returns. And that we should use meaningful and transparent measures to reflect our progress in this area. These measures are reflected in the 2020 remuneration policy proposal. In terms of growth metrics, we have no direct measures that incentivize fossil fuel production. Our indirect measures are influenced by 2 measures: profit and free cash flow. As we made for further detail on our strategy, the Remuneration Committee reserves the flexibility to consider the performance measures and their ratings of the 3-year policy term. The annual bonus is determined in line with performance in a number of areas, including environmental measures. As we have communicated that the weighting of the environmental targets in our 2020 annual bonus scorecard will be doubled to 20%, and that will be combined with fewer measures overall. And shareholders can read more about this in our 2019 annual report. We don't publish in-year performance targets as they are commercially sensitive. But we do publish retrospectively in each annual report and, therefore, we will include further detail in our 2020 annual report. Back to you, Ian.

Thanks, Helge. Bernard, if you're happy to address the second question from Climate Action 100+. They state that they welcome BP's new CapEx tests to evaluate each new material CapEx investment for consistency with the Paris goals and that this is critical to avoid the significant financial risks of investing inconsistent with the Paris goals as well as preserving BP's wider license to operate. Given the possibility of the COVID crisis may have brought forward peak oil, could the Chair confirm that the assumptions currently used, including a test of long-term oil price of $50 per barrel, will be kept under careful review by the Board? And also indicate if this CapEx test could be evolved to include a test of how CapEx is also consistent with finite carbon budgets aligned to BP's journey to net zero ambitions.

Thanks, Ian. And let me start by echoing Helge's earlier comments and my thanks to the representatives of Climate Action 100+ whose challenge and support has again made us better. And let me also reiterate what I have already said about the huge amount of uncertainty around prices. I learned very early in my career that trying to predict the price of oil was really a fool's errand. And it doesn't get any easier, the longer you're in this job. So the price ranges used for our investment governance process inevitably reflect considerable use of judgment. The ranges are reviewed and updated as necessary, typically on an annual basis as our understanding and judgment about the energy transition evolves. So I can confirm that in answer to the question. The price assumptions used will continue to be kept under review. And indeed, as our 2019 annual report made clear more generally as our approach matures with experience, we may adjust or supplement these. I cannot say at this point how our approach will evolve, but I can confirm that we look forward to continuing our engagement with Climate Action 100+ and the investors it represents, which will give us an opportunity to take account of their views on these matters.

Our next question is regarding BP's contribution to the arts. [ Dr. Chris Garrard ] has asked the following by proxy. BP announced that it would stop corporate reputation advertising and redirect resources to promote net zero policies. Will the company now also be reviewing its sponsorship of the arts? And as a related point, he has also asked with the Royal Shakespeare Company and National Gallery Scotland recently ending their relationship with BP, is the Board concerned that a failure to address concerns has damaged the company's social license to operate. Helge, perhaps I could ask you to address these questions.

Yes. Thank you, Ian. And [ Dr. Garrard ], thank you for your question. And you're right that we announced on the 12th of February that one of our net zero aims is to more actively advocate for policies that support net zero. We also announced that we will stop corporate reputation advertising campaigns and redirect these resources to promote well-designed climate policies. And we're proud of our long-standing investment in U.K. arts and culture over the past 50 years. Our art program aims to give access to people and communities across the U.K. and further afield in ways that would not be possible without our support. Indeed, to date, some 53 million people have engaged with BP-supported programs. And as we said in October last year, we're disappointed that the RSC ended our successful partnership early, and similarly in November when the National Galleries of Scotland ended their association with the BP Portrait award. BP shares many of the same concerns that have been raised and which apparently led to these decisions. And we know that the world is on an unsustainable path, which is one of the reasons that led us to develop our ambition and aims for BP and the world to get to net zero in February this year. I believe that companies, such as BP, who have shown a commitment to be part of the transition to net zero, have an important contribution to make to the arts, and it is important that we continue to do so. Thank you.

We've had a number of questions from [ Mr. Barrett ]. So we'll address his questions about our approach to political donations now as respond to the other matters on our website. Bernard, can I ask you to respond to this one, please?

Sure. Thanks for your question, [ Mr. Barrett ]. While we do exercise our right to make our position known on relevant issues, we don't contribute to political candidates or political parties. And we prohibit the use of BP funds or resources to support any political candidate or party. We do recognize the rights of our employees to participate in the political process, but employees who -- let's must make it clear that, that personal views and actions are not those of BP. And for more information, you can read the BP Code of Conduct on our website. Thank you.

We received the same questions from 5 shareholders on behalf of ClientEarth related to 2 of our net zero aims. They've asked, given BP has faced criticism in the past for its approach to its advertising, public advocacy and political lobbying, how will the company ensure transparency around its future adequacy spending and activities and demonstrate publicly that any advocacy is in line with the goals of the Paris agreement. Bernard, you made the announcement that BP would end the Possibilities Everywhere advertising campaign in February. Would you like to respond to ClientEarth?

Yes, thank you, certainly. We did state publicly on the 12th of February that one of our aims would be to more actively advocate for policies that support net zero. And as you rightly see, and I believe Helge referenced it earlier. We've also said that we will stop corporate reputation advertising campaigns and redirect these resources to promote well-designed climate policies. And we are focused now on delivering against these aims and want to be transparent in our approach. In terms of alignment with BP's climate policy, including support for the goals of the Paris agreement and demonstrating transparency, I was pleased that earlier this year, we published the results of our detailed review of 30 trade associations' position on climate change. And in fact, this was something that we committed to do, Helge committed to do, at last year's AGM. And for me, this was another -- this was a tangible step and another of our aims to set new expectations for our relationships with trade associations around the globe. We want to work with organizations who share our ambitious approach towards the energy transition. And if we can't reach alignment in our views, we are prepared to leave.

Thanks, Bernard. We now turn to our final question today. [ Kathy Mulvey ], acting as proxy for [ Hannah Gilbert ] has asked about BP's position on the American Petroleum Institute's position on rolling back health and safety regulations in the U.S. And what, if any, time limit BP has set on its effort to change API from within? Bernard, I think it's something that others have asked in recent weeks. Perhaps I could ask you to respond.

Thanks, Ian, and thanks, [ Kathy ], and thanks, [ Hannah ]. And you're right, this is a topic that I have received many e-mails about, and I recently responded to all those e-mails. So let me summarize this for our shareholders listening today. COVID-19 and the challenges it presents does not distract us from our commitment to safe and compliant operations, and the safety of our people and the communities where we operate obviously remains our core value. And with this in mind, we do not read the API's position as seeking to suspend regulation. Rather, we see API asking for some flexibility in the event normal operations are impacted as companies and workers adhere to U.S. CDC guidelines and state-level orders to protect people and communities. And it's important. This largely resembled steps taken to manage the U.S. fuel and energy system during other major crises such as hurricanes. In terms of the question about our time line and our ability to influence API, as part of our recent trade association review, BP noted that API recently took steps to revise its climate position. And their new position and corresponding climate policy principles have shifted. And the association is now more closely aligned with BP. And we're encouraged by this and believe that we can remain a positive influence within API. And we will, of course, continue to monitor this. Back to you, Ian.

Well, thanks, Helge, Bernard and Ben for sharing your thoughts on all these questions put to us at the meeting today. I'd like to remind you that we will also be publishing answers to the questions we have received on bp.com in the coming days. I'd also like to thank you for raising these important points and hope our responses have been helpful. Now turning to the formal part of the meeting. As I said at the start of the meeting, 23 resolutions have been put forward. Our articles provide that we vote on each resolution by poll. I can confirm that prior to the proxy deadline on Friday, 22nd of May, I, as Chairman of the meeting, had received proxy instructions for over 62% of the company's total voting rights. I now ask that those shareholders present in person that wish to complete a poll card do so now. I'll now pass over to the Company Secretary, Ben Mathews, who will explain more about the voting process.

Thank you, Ian. We have appointed Link as the BP registrar to tabulate the poll, and we've asked PricewaterhouseCoopers to act as scrutineer. I'm pleased to confirm that votes received up to the proxy deadline indicate that all resolutions have received significant support and all resolutions have therefore passed. We expect to have the final vote counted shortly after this meeting has concluded, at which point, we will announce the results on the BP website and on the London Stock Exchange. Thank you.

Thanks, Ben. On behalf of the whole Board, I'd like to extend my special thanks to the people within BP who've managed to deliver this AGM in a time of unprecedented uncertainty. Your use of technology, ability to adapt and genuine willingness to do what needed to be done shows real commitment to succeed in reinventing BP. This concludes the 2020 BP p.l.c. AGM. I'd like to thank you on behalf of Helge, Bernard and the rest of the Board for your continued interest and for your support of your company. Thank you, and goodbye.