Announcing Intention to Abandon Renewables, BP Misleads Investors by Blaming Low-Carbon Strategy for Poor Performance

It’s not a secret that oil and gas giant BP has been underperforming compared to its industry peers, but the company has long attempted to place the blame on its low-carbon energy strategy and climate commitments rather than its core business struggles. Ahead of Capital Markets Day, Reuters broke the news that BP’s chief executive will abandon a target to increase renewable generation 20-fold by 2030, returning the company’s focus to fossil fuels. But new analysis shows that BP has been misleading investors – and the public – through relentless media campaigns about the real reason for its massive profit loss and subsequent layoffs.

A closer look at the data reveals that BP’s financial setbacks in 2024 and early 2025 are more closely tied to the oil market’s volatility and mismanagement of its fossil fuel assets rather than its low-carbon investments. Despite claims that green policies are dragging down profits, BP’s spending on low-carbon energy remains minimal, and its share price fluctuations align more with market-driven trends than climate announcements.

Market Performance Points to Oil and Gas, Not Green Policies

Analysis of BP’s returns in 2024 and early 2025 indicates that key drops in BP’s share price—particularly in June, July, October, and November of 2024—were driven by underperformance in its core oil and gas business rather than its climate strategy. The market responded negatively to oil price fluctuations and concerns over BP’s fossil fuel assets, not to its previous commitments to net-zero targets. 

BP initially announced in February 2020 that it would become a net-zero company by 2050, with plans to reduce oil and gas production by 40% by 2030. This was reiterated in August 2020. However, by February 2023, BP had already scaled back its targets, reducing the planned cut in oil and gas production to just 25%. In October 2024, it was reported that BP would entirely abandon its 2030 production reduction target in favor of increased investment in fossil fuel-rich regions.

Despite BP’s claim that its climate policies are hurting investor confidence, there is little evidence to support this assertion. Analyst recommendations remained largely stable in the wake of BP’s climate-related announcements in 2020 and 2023. While “buy” recommendations fell by 30% between February and August 2020, they rebounded by 23% after BP’s February 2023 climate rollback. This fluctuation cannot be attributed solely to climate commitments but rather to the reality of oil and gas markets – an inherently unstable sector.

BP’s Low-Carbon Spending Remains Minimal, While Investors Remain Concerned

Contrary to claims that BP is heavily investing in the energy transition at the expense of profitability, its low-carbon capital expenditures from 2020 to 2023 accounted for only 6% of total capital expenditure. In contrast, BP spent 19% on gas, some of which it conveniently includes under its “low-carbon” strategy. This means that BP’s meaningful investments in renewable energy—such as solar, wind, hydrogen, and carbon capture—are a fraction of its overall spending, and in line with industry peers like Shell and TotalEnergies.

BP’s inconsistent climate policies have sparked concerns among investors, with major institutional stakeholders questioning its commitment to the energy transition. 48 investors holding 2.5% of BP’s shares told the company they won’t accept further cuts to BP’s net zero plan and the company will need to hold a vote if they want to scrap their climate commitments. In the press over the last few months, AXA Investment Managers, Border to Coast Pensions Partnership, and Zürcher Kantonalbank have all expressed skepticism over BP’s lack of transparency and failure to consult shareholders before scaling back its net-zero targets. Additionally, climate-focused investors like the Australasian Centre for Corporate Responsibility (ACCR) argue that BP’s capital allocation does not align with a meaningful energy transition.

BP’s attempt to shift the blame for its poor financial performance onto climate action does not hold up under scrutiny. The company’s struggles in 2024 have been primarily linked to oil market volatility and its fossil fuel assets rather than low-carbon investments. Meanwhile, BP’s actual spending on clean energy remains marginal, and investor sentiment reflects broader concerns about its inconsistent strategy rather than an aversion to climate commitments. Instead of misleading stakeholders, BP should focus on executing a clear and sustainable energy transition that delivers long-term value.