Good afternoon, and a warm welcome to the 2023 Annual General Meeting of BP p.l.c.
You're still not telling us the truth about the ecological climate crisis. You're still not telling us the truth. You knew 40 years ago the damage that burning hydrocarbons was doing to the world. You're still digging the stuff out of the ground. You're still pumping it out the oil well. What do you want to say to my grandson about the sort of world you're making for his future? 2050 is far too late.
We're nearly at the tipping point now. You need to be taking action right now today to get to net zero. It's just not good enough. You've known the science for 40 years. Yet you've kept on peddling the same old lies about sustainability and green growth. I'm really sorry, it's not enough, it's not good enough. You can't keep doing this to us. People in third countries are dying because of your operations now. People where you operate drilling and pipelines are dying because of pollution of their environment. Animals are dying.
Chuck her out. Chuck her out. Make your point.
Do you want?
Again-
Check the rule.
Get out.
We will come back to a question and answer session later, so thank you for your intervention. I think we try to move on.
Now. I don't need to read my script. Please don't. Could you make my microphone live? Ahmed. If I could then, however, if I may interrupt. If I may interrupt, thank you for your comment and for your contribution. That is not the time to be making that contribution to the meeting. We did have a dedicated question and answer time in our plan for today. Unfortunately, you've already disrupted the meeting, and I have no choice other than to ask you to leave the meeting. Thank you. Helge, may I please hand back to you.
Yeah, thank you, Ben. again, a warm welcome to the 2023 Annual General Meeting of BP p.l.c. To all our attendees online as well as in person. I'm Helge Lund, the Chair of BP's Board. I am chairing our meeting today from the ExCeL Center in London.
Excuse me. We have now had two interruptions at this meeting. Would security please remove this lady from the meeting.
It is oil giants like you who are driving-
Thank you. You've made your point, and the point has now been made twice.
Stop your greenwash. Step up and take responsibility.
Security, please remove this person from the room.
From the vast profits you make. Stop your drilling. Stop your lands. Shut down BP.
Okay.
So we try to-
Thank you.
proceed, again.
It's an emergency.
All right.
You must stop drilling.
This is my third and last time of asking. Please remove this individual from the room.
You must stop drilling. Can't you hear us?
Thank you. Thank you. I'm sorry to have to intervene. On that basis, please now leave the meeting. I will hand the meeting back to our chairman. Back to you, Helge. Thank you very much.
In the unlikely event of an emergency during our meeting, please follow instructions.
You must stop drilling. Can't you hear us? This is an emergency. You must stop drilling. Can't you hear us?
Sorry, Helge.
On safety, again, please follow instructions from our team of ushers and the Excel staff, who will lead you to safety. On my left today, we have in order, Paula Reynolds, Senior Independent Director and Chair of the Remuneration Committee. Ben Mathews, Company Secretary, and Bernard Looney, Chief Executive Officer, and Murray Auchincloss, Chief Financial Officer. On the screens on my right, we have, Dr Johannes Teyssen, Tushar Morzaria, Chair of the Audit Committee, Melody Meyer, Chair of the Safety and Sustainability Committee, and Pamela Daley. On my left.
Sorry.
Hina Nagarajan, Amanda Blanc, Satish Pai, Karen Richardson, and last but not least Sir John Sawers.
Sorry, Helge, to interrupt. Okay, this is the third and last time. Please, please leave the room. Security, please remove this individual from the room.
Ths is a climate emergency. Must pay loss and damage.
Here we go. We've had enough disruption.
Anybody can-
We've had enough disruption. Please leave the meeting.
Do you hear us say, "loss and damage"?
This is your final warning, madam. If you do not walk out on your own, I will have to remove you. Thank you. Thank you, security team. Helge, back to you. Apologies for the disruption. Please.
We are just after 1:00PM . and quorum is present, and I formally declare the meeting for open. In a moment, we will hear from Bernard Looney, the CEO, and Paula Reynolds will then make some remarks on remuneration. Ben Mathews will cover the procedural arrangement for today's meeting. After that, we look forward to responding to your questions on the resolutions the board has put to shareholders today.
First, I would like to offer some reflections on the progress BP has made since 2019. I begin with 2019 because we saw accelerated concerns about climate change, a threat scientists had been warning about for decades, and finally leading to a broad and intensified impetus for action. What began as a young person's movement spread rapidly through our institutions, the business world, and the capital markets.
We at BP, we welcome that shift because it began to bring what the world wanted more closely in line with what the world needed. We also saw in this change a clear opportunity for BP. Over the course of the year, we came to four judgments at the board, all of which were foundational for BP's subsequent reinvention and launch of BP's new strategy in 2020. The first judgment was simply that the world is on an unsustainable path. This might seem obvious, it wasn't, of course, new to us in BP, it is nevertheless an important truth.
Let me ask you a question?
Second-
Why are you-
We judged that energy markets-
Resolution 25. That is about the Paris Agreement. Why are we stopping?
Excuse me. Excuse me. Please would you sit down.
For the right-
Please would you sit down. There is time scheduled in this meeting for questions to be raised.
My children, my grandchildren have a reason-
This is my second time of asking. I will not ask you again. If you carry on, I will ask our security team to remove you from this room.
I'm thinking of my own grandchildren.
Okay. I apologize, but you're not accepting my request.
I am listening. I take it. I want to know why we cannot-
Either sit down and wait until the question and answer session, or you will be removed from this meeting. It's up to you.
It is up to you.
Absolutely. Remove her.
Right.
I need to be clear.
Will you now sit down?
Yes, I will sit down.
Please-
No offense that you discuss in this way.
You've made your point. There will be time for you to make that point in the question and answer session. I'm not going to ask you again. Please either sit down or leave this meeting.
No, no, please sit down.
Okay, out you go. You've decided. Please remove.
You cannot accept-
Thank you. Could we now restore order to this meeting? Please remove this lady. I would like-
Remember, my granddaughter is called Mia. Think about your grandchildren.
I appreciate your remarks.
We can't wait until 2050. She will be 50 by then.
She will be 60 by then.
Okay. Okay. That is okay.
Keep the order. This is final of our meeting.
My-
Think about.
Okay. Thank you.
My opportunity to understand.
My apologies to the room. Helge, if I may, we'll try having restored order, pass it back to you to continue. Thank you.
Let's then go to the second judgment that we made. We judged that energy markets will transform and change, and energy will transition increasingly towards lower carbon sources, and the production of energy will decentralize and also localize. Third judgment, while oil and gas will still be needed for decades to come, they will be increasingly challenged.
Fourth, and importantly, we judged that BP has the capabilities within which to help build the energy system of the future, capabilities that we believe can create value for our shareholders along the way. Inside the BP, we have thousands of scientists, engineers, economists, and all kinds of other experts with the skills the world needs to reimagine energy. Not only do they have the skill, they also have the will. A lot has changed since 2019 when we came to these four judgments.
None of us predicted the pandemic, nor Russia's invasion of Ukraine, nor the volatility that followed. Navigating a company as big and complex as BP through such an environment has been challenging. Yet our belief in those four foundational judgments has only been strengthened. At the same time, the last few years have reinforced for us the importance of flexibility.
We knew that the transition would be challenging, we knew we wouldn't get everything right, and we knew that even the right choices in one context might need to be adjusted as circumstances change, both to manage risks, but importantly also to seize opportunities. Of course, what we did not know then was how or how soon we would need to exercise that flexibility. We did exercise that flexibility first in February last year when we increased the ambition and scope of our net zero aims.
Do you like wildlife? Do you like the natural world?
Okay.
Do you want to see it destroyed? Is that what you're doing?
Once again, I apologize for the interruption. Please would you sit down? Please would you sit down?
When he says it's crazy-
Second time. No. Okay. I'm gonna move directly, please. Security team, please remove this individual from the room. Security, please remove these people from the room. Please go ahead.
You know that the British public will hold you to account for your actions. You know that you will be held to account for your climate crimes and your crimes against humanity because of your greed and because you have refused to take the climate crisis seriously.
Okay.
Do you think you'll get away?
Once again, I apologize to the meeting for these disruptions. We will try and maintain order as best as we possibly can. Helge, back to you. Thank you.
On the topic of flexibility, we did exercise that again in this February when we provided an update on BP's strategic progress, shaped by conversations the board had been having since the middle of 2022. Our strategy update was influenced by three factors. First, the realization that Russia's invasion of Ukraine could ultimately cause the energy transition to accelerate, but that the world needed access to more oil and gas in the near to medium term.
That realization was consistent with what we were hearing from governments, customers, investors, and also the market. Second, we had seen another societal shift, debates around energy were no longer simply about how we could achieve lower carbon energy, but energy that is secure and affordable too. Energy security, affordability, and decarbonization are all areas where BP can contribute. We welcome this rebalancing of the debate.
It should not, however, lead to a slower energy transition, but it should lead to the creation of a better, more resilient, as well as a decarbonized energy system. The third factor, and importantly, that influenced BP's recent strategic update, was BP's strong financial and operational and strategic performance.
As Bernard will explain, BP has been performing well since we began this transformation journey in 2020. These three factors, a change in the world's energy needs, a shift in what society wants from its energy system, and consistently strong performance, all gave the board both conviction that the strategy we set in 2020 is working and then the confidence to deepen our investment into that strategy.
You are fueling the climate crisis. Climate crisis-
Okay
...across the world.
I am sorry for these constant interventions at today's meeting.
...earlier, the drought in Madagascar.
Please cease your questions.
It's caused by fossil fuels.
Okay, we're gonna have to move. I'm sorry. We're gonna have to move straight to remove this disruption from the room. Please go ahead. Please go ahead. Please go ahead.
Sorry, can you give my mic, yeah. These companies are accessible. You all have children and grandchildren here. Do you not care about their future? Do you not care about them starving to death on the corpse-filled earth? What the fuck is wrong with you all? You have no heart and no head. BP must fall. BP must fall. BP must fall.
Okay. My apologies for the language and for the conduct of the meeting so far. We are attempting and will continue to attempt to restore order. Helge, back to you.
As we have said consistently, the energy transition is complex and not everyone will agree with every decision that we have been making, and there will always be a range of views. We are listening to those views, and we are grateful for the broad support shareholders have given so far. Of course, the foundation of BP's strategic progress is safety.
Nothing is more important, generally, safety continues to improve within the company. Tragically, four people lost their lives while working for BP last year, and several others were injured. The board and the leadership team have the same goal, everyone who goes to work at BP site should be also returning safely home at the end of their day. We remain absolutely focused on our goal of no accidents and no injuries.
On maintaining a rigorous commitment to safety across BP, I'm grateful for the leadership shown by Bernard and his team in enhancing the safety of BP's operations, something he will say more about shortly. Subordinate only to maintaining safety, BP's focus now is on strategic execution. I believe we have a strategy that is fine-tuned to deliver, momentum behind that strategy. A diverse and a capable board with the experience and expertise to steer the company in today's complex world, We have a very strong and committed leadership team led by Bernard Looney.
I can also say that the board's governance and decision-making framework has been further improved through the strong constructive challenge made possible by deep trust in the boardroom, also by the engagement we have with stakeholders outside the company, especially our shareholders. In recent months, I have enjoyed meeting many shareholders for discussions on the topics of greatest importance to them. We are grateful for that engagement. It makes BP a better company. That brings me to the resolutions proposed for voting.
Resolutions 1 to 24 form the ordinary business of this meeting and provide the board with the clear authority we need to get on with the job in hand. In contrast, resolution 25 has been filed by a group of shareholders coordinated by the activist group, Follow This. This resolution represents the 4th time in 5 years that Follow This has tabled such resolutions with BP, just as they do with several of our peers and competitors. It is a re-resolution that shareholders have consistently rejected in the past. We ask shareholders to reject the resolution today as well.
BP's board does not support this resolution and recommends voting against it. I and we do not doubt the good intentions of Follow This and their supporters. We share their desire for the world to meet the Paris goals. This resolution is not the answer. What it calls for BP to do is unclear. It does not recognize that our strategy aims, ambitions and aims constitute a coherent and integrated program or transformation for BP. Nor does it take into account the update to our strategy in February.
It would be disruptive of the strong progress BP is making on behalf of its shareholders. The board therefore recommends voting against Resolution 25. In conclusion, and with your support, we will continue the job we have begun. Delivering BP's strategy safely, producing the energy on which societies depend today, while helping to build the energy system for tomorrow, and creating value for our shareholders now and into the future.
Continuing BP's transformation with the same focus, energy, and determination the team has shown for the past three years. Many people deserve thanks for the progress BP is making, Bernard, Murray, and the whole of the leadership team. They have led BP through a volatile period, through a pandemic, a war in Europe, a global energy shortage. They are executing a strategy that your board believes should see BP successfully through the energy transition. I also commend every one of BP's employees for their resilience and their commitment to the task.
Of course, I thank you, our shareholders, whether you are among those who have stayed with BP as we continue to continue our transition to become an integrated energy company, or new shareholders who have joined us for the journey ahead. With the strength of the support you have shown us, BP will continue performing while transforming. Thank you. Now over to you, Bernard.
I'll take it the applause is for you, Helge. Well, good afternoon, everyone, and thank you, Helge. It's lovely, of course, to see some familiar faces in the room, some ex-employees and also some current employees. Before I get going, if it's okay with you all, there are some people that I would like to thank. I'm deeply grateful to our board, not only for their support last year, but also for their testing and their challenging that they do so often. I also want to thank the entire team at BP. As Helge just said, we are living in challenging times, and throughout it all, our teams have done-
BP, your product is killing the planet, you know that, Bernard. As you record profits, millions die as a result of your actions. As you lobby governments-
Again, I apologize. Security will have to remove you from the room for this persistent disruption. Security, please go ahead.
You invent terms like carbon footprint to make it-
Please go ahead.
Like it's us, as individuals, who are responsible for the chaos that you have caused. You invented carbon-
The point has been made. Please leave the room.
As individuals who are responsible for the chaos you have caused. You have a conscience, Bernard. I know you have a conscience.
Please leave the room.
I know you think about-
Security.
Thanks.
Stop the harm, BP. Stop drilling for fossil fuels. Millions are dying as a direct result of your actions. You know that, Bernard.
you're-
I know.
You're now leaving the meeting.
Bernard, I know.
You're now leaving the meeting, and I would like. The point has been made. We will now move on with the business of this meeting. Bernard, thank you. Back to you.
Thank you, Ben, sorry for that. I was talking about our teams and thanking them for the work that they have done in what is has been a very difficult time for everyone in the room, everybody online, and for the world. What our teams have tried to do throughout it all is keep that energy flowing, which is important, and at the same time, growing the parts of the business that are helping BP's transition and indeed, the world's transition.
I, if you'll allow me, am incredibly proud of the job that they are doing. Finally, I wanna thank you, the owners of our business. We never forget, trust me, that investing in BP is in itself an act of trust. We thank you for that trust, and we do our best for you each and every day. Helge also said that people won't always agree with every decision that we make, and he's right, of course. For some people, anything less than deep and immediate cuts to the production and sale of hydrocarbons is simply not enough.
I would like, if it's okay, from here to address that issue head on. We recognize that the world's carbon budget is finite, and apart from the pandemic, global emissions have risen every year since the Paris Agreement. The transition needs to be rapid, and it's a very important and, it also has to be orderly. Rapid in the sense that we need low carbon energy deployment at a scale and pace that's consistent with the Paris goals.
Orderly in the sense that supply has to meet demand. People need energy available at the flick of a switch. Something that's still not a reality in many parts of the world, many parts of the world that I visit. Let me expand on what Helge just said. People all over the world need energy to heat their homes, to power their businesses, to get from A to B.
The truth is, today, that energy is predominantly hydrocarbon-based. The war has shown us what happens when the supply of that energy gets squeezed, but demand stays the same. What we get is huge price volatility. We get governments worrying about how to keep the lights on. We get economic pain affecting billions, both in the developing world, but also in the developed world.
It's clearer than ever that the world wants and needs a better, more balanced energy system. Energy that is not only lower carbon, but energy that is secure and affordable as well, what's called the energy trilemma. As an integrated energy company, BP is very deliberately set up to help solve this problem. We have the skills, we have the scale, we have the networks, the infrastructure, and importantly, we have the ambition.
I hope you don't hear that in a boastful way. It's something that we built over decades. We see two ways that we can help. Investing to help accelerate the energy transition and, not or, investing in today's system to keep affordable energy flowing to where it's needed while driving down operational emissions. Take transport.
We are helping the world to keep moving today with gasoline and diesel, at the same time, we're rapidly building an electric vehicle charging network. Take natural gas. We're producing it to power businesses and homes today, as we do this, we are expanding in wind and solar. It's the same for natural gas, for making steel and cement. We produce it, we're working to build out hydrogen to switch to. Jet fuel for planes, at the same time, we're scaling up sustainable aviation fuel to switch to.
That uniquely is what an integrated energy company can do. The good news is that we're making real progress. Helge said I would talk about our performance, there are quite a few points, if it's okay, that I would like to share with you. Safety always comes first at BP, and that is where I would like to start. There is nothing more important to us at BP than safe, reliable operations, as you would expect. Everything we hope to achieve depends on making sure that everyone gets home safely at the end of the day.
In 2022, four people tragically lost their lives while working for BP. Families lost loved ones, colleagues lost friends, and I feel that deeply, as I know others do across the company. We're determined to honor their memory by learning and living the lessons. Despite these tragic events, we did make progress on safety and on putting the systems in place to make BP a safer company. We've upgraded our Operating Management System to be more reflective of our current organization and also more flexible.
It's still a rigorous system for the disciplined management of our core risks. Now it's equally effective for the new businesses that we're building and the different type of risks that they face. We're also developing and progressing process safety improvement plans for every one of our sites. This helps us maintain a high level of vigilance and control for our biggest site-specific risks. We're making improvements. In 2022, this resulted in a 19% combined fewer, what we call Tier 1 and Tier 2 process safety events. It was also one of the safest years on record in our upstream operations.
There's something vital that underpins all these systems and processes, supporting a culture of care for others, whether it's physical safety or whether it's mental health, in the field or on the forecourt, we want our people to look out for their colleagues and to look after them. Safety always comes first. When I came into this role a few years ago, I said we would perform while transforming, that we would meet today's energy needs, deliver competitive returns, and transition BP to a lower carbon future.
Last year overall was a year of strong performance. It's still early days, of course, but our plan, we believe, is working. Our confidence, quite frankly, is growing, and that, I hope, is demonstrated by what happened in 2022. If it's okay, I'd like to briefly take you through the highlights. On the operational side, we delivered our highest upstream plant reliability on record, along with our lowest per barrel production costs since 2006.
This helped us generate a $40.9 billion operating cash flow for the year, an underlying replacement cost profit of $27.7 billion, and a return on average capital employed of 30.5%. All three of these figures are a record financial performance for the company, giving the board the confidence to increase the dividend per ordinary share by 21% throughout the year. As we perform, rightly, we pay more tax. In the U.K. for 2022, we paid GBP 1.8 billion, or $2.2 billion in taxes from our North Sea business.
Globally, we expect to pay $15 billion in taxes for 2022, the highest ever annual tax bill for our company. We also continued to drive down our operational emissions, delivering sustainable greenhouse gas emission reductions worth 1.5 million tons of CO2 equivalent. There's one other number that really matters to me. Pride in our company is growing. In our last employee survey, the number of people who said they were proud to work at BP hit a new company record, 78%.
These are the people, in many ways, who know BP the best, and it says a lot about their belief in the direction that we have set. We are performing, and at the same time, we are also transforming. In many ways, 2022 was the year when BP's transformation really started to take shape. We have now significantly increased our investments in the non-oil and gas parts of our business that we call our transition growth engines. That's bioenergy, that's EV charging, that's convenience, renewables and power, and hydrogen.
We grew their share of our capital spending from around 3% in 2019 to around 30% last year. That's 3%-30% in 3 years. We're growing our new biofuels business. In 2022, we completed a $3 billion deal to acquire Archaea Energy, one of the leading U.S. producers of renewable natural gas. We're growing our EV charging network. We've tripled it in size since 2019. Lots of threes you'll see. Last year, the energy we sold through bp pulse charge points grew 150%. To build an even bigger charging network, what do we need?
We need land, we need customers. Our convenience business brings us both, and we're growing this too. Last year, we added 250 new strategic retail sites. How about our hydrogen business? Well, it's growing. Last year, we took a 40.5% stake in the Australian Renewable Energy Hub project, which is based in Western Australia.
The goal is to produce green hydrogen for use in industry, helping some of the most energy-intensive businesses decarbonize. Our renewables business? Yes, it's growing too. Last year, with our partners EnBW, BP was awarded a new offshore wind lease option off Scotland's east coast. At 2.9 gigawatts, this will be enough to power the equivalent of 3 million homes. As I like to say, having grown up on a farm, shovels are in the ground. Our project pipeline is filling up.
We will continue to invest in and produce oil and gas. It's the backbone of BP, and we're investing in growing businesses in markets that are only getting bigger over time. Let me tell you a little bit about what this means for the future. In February, we said we now have the confidence to lean further into our strategy. Compared to a year ago, we plan to spend more on BP's transition, and we plan to spend more to support energy security given the reality of today's energy system.
We will invest for today, and we will invest for tomorrow. We now plan to invest even more into our transition growth engines, up to $8 billion more by 2030. Focusing on the more quick, the nearer term, the easy to scale solutions like EV charging and sustainable aviation fuels, solutions that can deliver today.
We also plan to invest more in oil and gas, again, up to $8 billion more by 2030. We will concentrate our efforts on high-quality oil and gas projects, prioritizing where we can deliver quickly and at low cost, keeping emissions down by using existing infrastructure wherever possible. Governments around the world are looking to companies like BP to help them keep energy flowing and affordable. We are determined to play our part.
We're delivering as I speak. Since we updated you on our strategy in February, the following things have happened. In the Gulf of Mexico, we've just started up the first of five major oil and gas projects planned for this year. The deal still needs to close. We've agreed to purchase TravelCenters of America. It's a massive convenience and mobility business in the US, one that will grow our footprint right across the highways of the entire United States.
We're continuing to back Britain. Three of our flagship low-carbon projects in the Northeast of England have just been selected for potential government support as part of the UK's own ambitious energy transition. That's our plan. We're putting it into action. Today, we have real momentum. None of this is possible without the support of our shareholders.
By choosing to back BP, you're backing a company that is growing and delivering for customers, that's contributing to society by investing and paying tax, that has a strategy that's working, that has a team that's fully behind it, and that has a vital role to play in helping to solve one of the greatest challenges of our time, or indeed any time. Thank you again for your support, everyone, and back to you, Helge. Thank you.
Thank you, Bernard, for this excellent review of the progress that you and your team are doing. Lots is going on in the company, so great to hear. I now invite Paula Reynolds, the Chair of the Board's Remuneration Committee, to update you on the work of her committee over the past year. Paula, over to you.
Thank you, Helge. Now on to some of the more pedestrian portions of our meeting. As Chair of the Remuneration Committee, I'd like to talk about the two remuneration-related resolutions that you're being asked to vote on today. There's resolution number two, which is the Directors' Remuneration Report, which covers remuneration from this previous year and really a three-year period. There is resolution number three, which is the Directors' Remuneration Policy, which speaks to the three years starting after today.
Before I summarize the resolutions, I'd like to briefly describe the work of the Remuneration Committee. The committee meets multiple times each year, a number of us also meet with our largest shareholders and shareholder representatives, such as proxy advisory firms and investor associations. Additionally, we take input from employees and other stakeholders.
The committee's role, in essence, is to make sure that the incentives and rewards that we construct are aligned with BP's purpose, its strategy, and its values, behaviors, and indeed, its culture. Much of what we discuss relates to ensuring that pay is linked to performance, and that in that process, we're a fair employer when it comes to our pay and benefits broadly.
The committee does much more than decide what we pay our executive directors and our leadership team members. We don't, nor could we or should we, set the pay and benefits of every person working for BP. What we do is seek to ensure that BP can attract and retain the very best and most talented people in their fields.
As an example of something that we have been involved in over the last couple years is thanks to our 2021 Reinvent bp share plan, more than 63,000 employees were allocated shares in the company. Like you, they will be owners of the company when those shares vest in 2025. As a result, of course, we believe as a committee that this is a very powerful way to align the interests of employees and investors in the company and have everyone pulling in the same direction in what we can all agree is a very complex backdrop.
As a committee, we also supported the fact that BP became the first major energy mobility and convenience employer to be accredited in the UK as a Living Wage Employer. That means that every employee working in the UK for BP receives a minimum hourly range, wage that actually is adjusted across the country, different rates for different places. Outside the UK, we've now carried out a global review of our business, and I'm pleased to say that for 2022, we've confirmed that all BP employees were paid a fair wage.
By fair wage, we mean a wage that meets employees' basic needs as defined in each country. In December of this year, we supported an initiative instigated by management for a one-off payment to employees, recognizing the unprecedented pressure that they were facing in the cost of living crisis. With that sort of backdrop, let me turn to resolution two. This resolution asks you to approve the Remuneration Committee's report on what we paid our executive directors for 2022. It also covers how we paid the wider workforce.
As you think about how you will vote, please keep in mind how the BP workforce as a whole, led by Bernard and Murray, has navigated your company through three years of extraordinary operational, geopolitical, and inflationary challenges as a result of the pandemic and then the war in Ukraine. Each of our executive directors holds very significant responsibilities. They have not only navigated your company through a period of huge change and uncertainty, they've done so while delivering effectively against targets set for them by the plans that we put in place.
As a committee, we've sought to reward appropriately in accordance with BP's current remuneration policy, which you approved, in 2020, for the value created and the strategic progress delivered. In making our decisions, the committee has applied our judgment and discretion, again, in accordance with policy. We don't just use the formula, we make adjustments for circumstances.
In this particular cycle, it meant taking account of both the tragic safety incidents that Helge and Bernard both spoke to, and the volatility of BP's share price over the past three years. The length of the report in the annual report behind this resolution reflects the fact that the committee's discussions were robust and detailed.
As mentioned previously, we benefited from considerable interactions with many of our largest shareholders, we brought them together in a group even to talk about these matters to try to make sure we were hearing the voice of the shareholder. We're grateful to them for their guidance, which we believe is reflected in the pay outcomes for Bernard Looney and Murray Auchincloss.
The next resolution is number three. This is the binding vote on the updated policy, which will guide the future deliberations on pay for the next three years. For those of you who might be close watchers of our policy, you'll note that what we've proposed is largely unchanged from the policy that you approved overwhelmingly in 2020. If it passes today, it will take immediate effect.
The minor modifications that are in there are outlined in the policy materials in the Directors' Remuneration Report. Retaining the core of the 2020 policy gives our workforce, including our executives, confidence and certainty that we're not gonna change the rules midstream. The committee has thought carefully about the specifics of these resolutions for about the last five months. As a result, the board recommends that you vote in favor of both resolution two and resolution three. As always, I welcome your feedback. I certainly ask for your continued support, and I'll now hand the podium back to Helge.
Thank you, Paula. I will now hand over to Ben Mathews, our Company Secretary, to take us through the procedures for today's meeting. Over to you, Ben.
Thank you. Thank you, Helge. Good afternoon, everyone. Again, I apologize for the earlier disruption to the meeting. The notice of the meeting was convened this meeting was published on the 10th of March, 2023. The required notice period has therefore been satisfied. The notice is taken as read. Moving on. Voting on all resolutions today will be by way of a poll. The full text of each resolution is, of course, set out in the notice of the meeting. Resolutions 1 to 20 inclusive are proposed as ordinary resolutions, which means for them to be passed, more than 50% of the votes cast must be in favor in each case.
Whereas resolutions 21 to 25 inclusive are proposed as special resolutions, which means that for them to be passed, at least 75% of the votes cast must be in favor, again, in each case. Please note that only shareholders, proxy holders, and corporate representatives are permitted to vote. I should remind you that a vote withheld is not a vote in law and will not therefore be counted in the calculation of the proportion of the votes cast either for or against a resolution.
Once the poll opens, you can vote at any time until the chair declares the voting closed after the conclusion of the shareholder questions. Helge will then give you a clear prompt later on in the meeting to warn you when voting will close. On voting, there are three ways to vote at the meeting today. Those of you joining us online can vote via the electronic meeting platform, Lumi. For those of you here in person, you may use either the electronic voting handset or a paper poll card.
Instructions on the applicable methods are on the screen behind me right now, and they'll appear again before voting closes. If anyone here in person requires any help to vote, please just raise your hand, and an usher will come and help you. For help with using the Lumi platform, please see the user guide in the Documents tab. If you've already cast a proxy vote, you do not need to vote again. However, if you do choose to vote again today, your votes cast at this meeting will replace any proxy vote you've previously lodged.
The preliminary indicative results will be shown on the screen after the poll closes at the end of this meeting. The final voting results will be published via our regulatory announcement and displayed on our website as soon as practicable after this meeting concludes. On questions, only shareholders, proxies, and corporate representatives are permitted to ask. Guests are not permitted to ask questions. To allow us to answer as many of your questions as possible, please keep them short and concise.
Questions must, of course, be relevant to the business of the meeting. For those of you joining online, if you have not already submitted a question, you may do so through the electronic meeting platform. Please just select the Question tab at the top of your screen and type your question into the text box at the top of the page.
Questions can also be asked via telephone. Details on how to do this are provided on the electronic meeting platform. If you're dialing in, please remember to state your name and confirm whether you're a shareholder, a proxy, or a corporate representative before proceeding with your question. Of course, for those of you joining us in person today, you'll have been provided with the opportunity to pre-register questions via the question registration desk before the meeting started.
For those of you who didn't pre-register a question, but you still wish to ask one, please make yourself known to an usher at any point during the meeting, and they'll take you to the relevant reserved seating area. An usher will then inform you when it's time to ask your question. When asked to speak, please begin by giving your name and confirm whether you are a shareholder, a proxy, or a corporate representative. Helge, with that, back to you for the formal business of the meeting.
Thank you, Ben, for that explanation. The poll is now open for voting. It will remain open until I announce its closure, which will be after the end of our question and answer session starting soon. We will now proceed to the part of the meeting where your questions can be addressed. I propose to allow around an hour to address questions.
This year we have had a number of questions submitted by shareholders in advance of today's meeting, and many of those questions have been on the same or broadly similar themes. In order to maximize the efficiency of the meeting and to provide the opportunity for those of you who have joined today to also raise your questions, we will collate some of the questions that were submitted and provide a single answer.
This will help to avoid repetition and ensure the smooth running of the meeting. Again, for efficiency, we will aim to respond to all questions that are on the same or similar subject matter before then moving on to another topic. We want you to have the opportunity to ask questions of your board today, and in the interest of hearing from all those who wish to speak, may I please remind you to keep your questions short and also relevant to the business of the meeting. Ben, perhaps would you please introduce the first set of questions?
Yeah, of course. Thank you. Thank you, Helge. ladies and gentlemen, the first topic that we will be focusing on is on the company's strategy. We have a pre-submitted question from Mrs. Mehta, who is asking why it is that BP is not joining forces with Rolls-Royce for mini nuclear reactors so as to enhance the U.K.'s energy security and self-sufficiency. Helge, would you like to pick that up?
Yeah, please, Bernard.
Thank you. Mrs. Mehta, thank you for your question. I think if I could just address it in two parts. One is about nuclear, one is about what we're doing to help Britain. On nuclear, it's not an area of focus for BP. We have to focus on what we believe our strengths are. Nuclear has not been part of BP's strategy over the years, and it's not part of our strategy today.
We are focused on the 5 transition growth engines. Hopefully you're not too dismayed by that because what we are doing to enhance the security and the efficiency and the affordability of energy in Britain is, I hope, you will see quite significant. In many ways, the UK is a microcosm of BP's strategy overall. We're still an oil and gas producer in the North Sea today.
We're actually adding 2 more rigs in the fleet there, which are very important, which we will hope will help deliver oil and gas to help Britain in today's energy system, which is important. At the same time, we're actually investing right across the piece when it comes to helping the UK transition. We have offshore wind in the Irish Sea and off the Scottish coast that we hope to develop. We are building solar plants in Britain through Lightsource BP. In fact, I read during the week we're building a 350 megawatt solar plant, which I'm told is the largest that's been built in Britain.
We're expanding our EV charging infrastructure because people aren't buying electric cars, not necessarily because they can't get one, it's often because they're worried about the infrastructure. We're gonna spend up to GBP 1 billion this decade. We're building a carbon capture and storage system off of Teesside.
We're gonna build a net zero power plant at Teesside. We're hoping to build a green and a blue hydrogen facility at Teesside. I hope you'll see from that we are backing Britain. We are investing in today's energy security and affordability. At the same time, we're doing what we can to help the U.K. transition.
Bernard, thank you very much for that response. Mrs. Mazur, again, thank you for the question. The next one we have is from Mr. Hurst, who has asked if drivers have to wait to charge their electric vehicles, will all petrol stations have coffee shops and facilities such as toilets with baby changing units? Bernard, is that a question you'd like to pick up?
Indeed. Mr. Hurst, thank you for your question. In many ways, you're speaking right into the strategy here because, as we said in the opening remarks, when customers are charging their car, an important part of that offer is that they are able to get the things that you quite rightly ask that they want and need, such as a cup of coffee, a snack, somewhere to sit, clean toilets, all of the things that matter to people.
That's part of our strategy. We intend to put 100,000 charge points on the road by 2030. We've now already tripled the number between 2019 and 2022. Central to that offer is that convenience offer that you just laid out. In fact, it's one of the things that we think we have an advantage in. Would you believe that today in Britain, over half the people who visit a BP petrol station don't actually buy fuel? They come for the convenience offer, the great partnership that we have with Marks & Spencer here.
convenience and EV charging, particularly where there tends to be longer dwell times with charging, is core to the strategy, core to the offer, and what we hope will help people make that shift over time to that different means of propulsion for their car. that's what we're trying to do, Mr. Hurst has asked a very pertinent question and one that speaks right into the core of our strategy in that area.
I think you all can see the commitment of the CEO to EV charging, and I know that he is also a big lover of coffee, so I can assure you that this will be a very good offer as we move forward. Back to you, Ben.
Brilliant. Thank you, Helge. Thank you, Bernard. Mr. Hurst, thank you again for the question. If we then move on, the next pre-submitted question that we have was from Mrs. Shkukina. Apologies if I've pronounced that incorrectly, Mrs. Shkukina. The question is, what is the current legal status of the Rosneft relationship? Is there any possibility of payment of the Rosneft dividends or financial proceeds due to BP once the war, I think in Ukraine ends? Helge, maybe you'd like to pick that up.
Thank you for that question, Mrs. Shkukina. We remain actively engaged in marketing our Rosneft shareholding, and we will update the market as and when appropriate. We took our decision on the 27th of February 2022 to exit Russia, and we did that in the best interest of BP for the short, medium, and long term. We stand by it.
You saw the impact on our reporting. We took a $24.4 billion post-tax write-down, the largest such impact, I think, on any company, and writing off the value of our interests, removing half of our reported reserves and one-third of our reported production, as well as no longer receiving dividends. To be clear, Rosneft dividends, we have not received any dividends since we announced our decision, and we do not expect to receive any either. back to you, Ben.
Thank you, Helge. Again, thank you for the question. We're gonna move on now to two questions which I'll merge into one. The question is on the topic of the Gulf of Mexico relating to when it is that we believe BP will recover from the Deepwater Horizon incident and recover the losses. Bernard, would it be okay for you to pick that up?
Very good. Well, we are just past the 13th anniversary of the Deepwater Horizon accident that happened on April the 20th, 2010. The first thing is that 11 people lost their lives in that accident, and we remember them all the time. We have a saying inside the company that we will never forget, and therefore, our thoughts must always be with their families and their friends because we can't bring those 11 people back.
Thankfully, beyond that, the Gulf itself, the Gulf of Mexico has recovered. I believe we can say that. As for BP, I think BP is strong and healthy today on the back of multiple changes that we have put in place since the accident. Multiple changes. I've talked earlier about the improvements in safety, the 19% reduction in process safety Tier 1 and Tier 2 events this year. Talked earlier that we've had our best reliability, which in many ways, operating reliability is a proxy for safety because that means that the operations run well.
When they run well, they tend to be safe. When they tend to be safe, they tend to run well. We had our best reliability on record. In many ways, I think the company, as I said, is in strong shape. It's healthy. We must never remember that 11 people lost their lives there, and that is the thing that will endure with us for the rest of our time, indeed, as it most certainly will for the families involved.
Thank you, Bernard. Again, thank you for the questions. Continuing on the topic on strategy, Mr. Joseph registered a question asking, Murray, maybe you'd be able to take this, asking for an update on the financial performance of BP and Thorntons brands in the U.S. Is BP going to completely get out of refining in the U.S.A.?
Great. Thank you, Mr. Joseph, for your question. The U.S. remains a key region for BP. We've invested over $140 billion in the U.S. since 2005. Last year, you saw us continuing to invest there with the Archaea Energy and EDF acquisitions. We've also started up the Argos platform in the Gulf of Mexico. That's our 5th operating platform that's operating there. As Bernard said earlier, we've announced the agreement to acquire TravelCenters of America. Thorntons has integrated very well.
It's been a few years since we bought it. It's now integrated well, with ampm, Amoco, and the BP brands, and it's operating very effectively. Gross margin has grown significantly over the past few years, well ahead of the 6% growth that we see across the rest of the retail sector. It's doing better than the competition.
Regarding refineries, we're happy with our refining portfolio globally now, including in the U.S. We're very committed to the Whiting and Cherry Point refineries in the U.S. Whiting is our largest refinery globally at 440 KBD, and we have plans for biofuel projects at Cherry Point. Of course, we're exploring both green and blue hydrogen opportunities at both Whiting and Cherry Point. Thank you for your question.
Great. Thank you. Thank you, Murray. Appreciate that. Thank you, Mr. Joseph. Moving on, Mr. Miller registered a question, and he would like to know what the impact is on any current plans with respect to the long-term profitability of BP to achieve our climate change targets. Bernard, is that something you could pick up?
Very good. Mr. Miller, thank you for your question. The best way to answer this is really through our transition growth engines. We have 5 of them, led by renewables and power. We have hydrogen, we have convenience, we have EV charging, and we have bioenergy. That's always the problem with saying 5. You've got to make sure you can remember all 5. They're the 5.
The way that we measure profitability is twofold. One, through what we call EBITDA or earnings, and secondly, through returns, the returns that we make on those investments. Now, those 5 transition growth engines delivered probably between $1 billion and $1.5 billion of EBITDA maybe just a year or 2 ago.
By 2030, we will grow that one and a half billion dollars of EBITDA to something like $10 billion-$12 billion of EBITDA from those 5 transition growth engines, which is an incredible rate of growth, and we're investing to make that happen. You'll see that material earnings come through as we approach the end of the decade. The returns on those investments are strong.
You know, we see in places like bioenergy, we see very strong 15%-20%, sometimes more rates of return. That's how Mr. Miller, we assess the profitability. We're very careful with investing your money to make sure that it does translate not just into a good for society, but also importantly, that it creates value for you, the owner of the company.
Thank you, Mr. Miller, again, thank you for that question. If I move on, we have a question registered from Mrs. Foley, she asks, Bernard, I think I know what you're gonna say on this. She asks: Why are you not doing more on renewables instead of even more drilling? Bernard.
Great. Well, Mrs. Foley, and thank you for your question, and obviously, it's a question that I have heard before. What I want you to know is that we are doing more, and if I expanded beyond renewables into areas like bioenergy, which is things like sustainable aviation fuel or biogas, where we're capturing gas from landfill sites that would otherwise leak into the atmosphere.
We're doing much more in EV charging. We're doing more in renewables and power. We're doing more in hydrogen. We are doing more. In February, we actually announced that we would spend up to $8 billion more this decade. Now, $8 billion on top of what? Well, that's between $55 billion and $65 billion into those five transition growth engines this decade. We went, Mrs.
Foley, from 3% of our money being spent in those areas or invested in those areas in 2019 to 30% last year. That's 3%-30% in just 3 years. I think anybody would have to say that that is quite a significant change. We hope that that number can get up to 40% by the middle of the decade and even up to 50% by the end of the decade. As I said in my opening remarks, it's an and, not an or. As we do that, we also have to invest in today's energy system.
That's why, at the same time, we also said that we would invest up to $8 billion more into hydrocarbons, into today's energy system. It's an and strategy. It's not an or strategy. To your concern, I think the evidence and the fact base is very compelling that we are doing what you, I think, want us to do, which is lean heavily into that energy transition, and that's what we're trying to do.
Thanks, Bernard. Again, Mrs. Foley, thank you for your question. I think we have 1 more question that was registered, and then I know we've got a question in the room from one of our shareholders, Mr. Culverson. Before that, we have a question registered from Mr. Holman who asks, what is it that BP could do to reduce fuel prices at the pumps? Murray, is that something you could pick up?
Sure. Thanks. Mr. Holman, thank you very much for the question. We do recognize how difficult it was for people last year as pump prices rose. Fortunately, this year, the prices have relaxed. Pump prices really are predominantly driven by the international price of oil, and BP does not control that. For our part, what we aim to do is provide high quality fuels and services that we price competitively. Thank you for your question.
Thank you, Murray, and thank you for that question. In the room here, we have a question point A, from Mr. Coulson. Mr. Coulson, please go ahead and ask your question. Thank you.
Thank you, Mr. Chairman. I was mainly going to say that you've answered my question on the importance of our present dealings with Russia. I would add it's a very sad state of affairs when you remember what work our former splendid Chief Executive Officer, RW Dudley, put in over the years to get where we were. Thank you, Mr. Chairman.
Thank you. Thank you, Mr. Coulson. I don't think there's anything, as you say, that we can add beyond what we've said already in response to that, but we appreciate you registering the question with us. We didn't have any other registered questions. What I would like to do is just to check whether there are any other questions in relation to the company's strategy that we have either in the room here or on the telephone line. Just checking and looking around. I'm not seeing, Helge, any raised hands, so-
I suggest we then move on to the next topic.
To the next topic.
Yeah. Please.
Our next topic was going to be on net zero, on the climate issues, of course. I know that we did have the resolution, as we've already heard from Follow This, and we have Mark van Baal with us in the room here. Can I just check with Mr. Van Baal? Yes, I see you waving your hand. Did you have a question or point you wished to make to shareholders in the room? If you could make your way then please to the question point. Thank you.
Thank you. Thank you for this opportunity. Mr. Looney, Mr. Lund, good to see you again. In 2019 at the AGM of BP in Aberdeen, I remember that Mr. Dudley, after a lot of protesters were dragged out and shouting, "This is a crime, a crime scene," that Mr. Dudley said, "I prefer a Shakespeare performance." Because of that, we set our key question today, and that was in 2019, scope three or not scope three? Back then, scope three was the elephant in the room.
The emissions caused by fossil fuels was the elephant in the room. BP advised shareholders to vote against the Follow This resolution in 2019 that requested scope one, two, and three emission targets. Mr. Dudley answered that scope three was not his problem. Fortunately, a group of responsible shareholders voted for the climate target resolutions. Mr. Lund heeded that call. In the same year, he changed BP's position on Scope 3, and he chose Mr. Looney as his new CEO, who accepted responsibility for Scope 3.
Mr. Lund, you're under a lot of pressure today, but I'd really like to commend you again for crossing the Rubicon on Scope 3. That's a crucial step for an oil major that cannot be understated. Also, you're investing a lot in renewables these days. However, unfortunately, the elephant in the room is still there. The elephant in the room today is only less visible between BP's plethora of aims. This elephant is the total Scope 3 emissions of BP by 2030. Science and responsible investors are very clear.
To achieve the goal of the Paris Climate Agreement, to limit global warming to 1.5 degrees Celsius, the world must almost halve emissions by 2030. BP has many aims, but none of these covers BP's total emissions by 2030 in absolute terms. Promises of 2050 are empty without meaningful interim targets. Therefore, BP's overall aims are not Paris-aligned yet. Again, a promise for 2050 is empty.
I can only promise you that I will not be here in 2050 on this, on the AGM of BP. I stand here today on behalf of Follow This, a group of responsible shareholders in oil and gas companies that files climate resolutions. Today, Resolution 25 offers shareholders a vote to support BP to align its aims, covering all Scope 3 emissions by 2030 with the goal of the Paris Climate Agreement.
Let me emphasize to shareholders, we, as Follow This, believe that BP can lead and thrive in the energy transition. BP can meet increasing demand for energy services while reducing greenhouse gas emissions to levels consistent with the global intergovernmental consensus specified by the Paris Accords. Today is an important day, not just for your future, mister, as Chair, Mr. Lund, not just for BP, not even for the oil industry, for, but for the world at large.
Today, investors can show whether they mean business about climate change. By voting for Resolution 25, filed by Follow This and asset manager, Degroof Petercam Asset Management, one of Europe's leading investors, shareholders support BP to align its aims with Paris. To be clear, the metrics and the strategy are entirely up to the board.
Feel free to add another 10 aims if you like, as long as they lead to large-scale emission reductions within this decade. Unfortunately, BP has urged shareholders again to vote against this climate resolution that really is made to give you, a shareholder, mandate to thrive in the energy transition. Supposedly, the resolution is encroaches on the board's responsibility.
It's unclear, simplistic and disruptive. I think it's quite contradictory, all these four arguments. The resolution is indeed simple, but can therefore not be unclear. It leaves the strategy entirely up to the board, and it's only disruptive if you are not Paris-aligned. The four arguments, like the plethora of aims, distract from the elephant in the room, and that is that BP has not set targets that will lead to large-scale absolute emission reductions by 2030.
Again, the world has to almost halve emissions in the next 10 years. Today, investors have the opportunity to leave no doubt that meaningful Scope 3 targets by 2030 are a crucial component of meaningful climate action. They can do so by voting for resolution number 25. In 2019, your predecessor gave a straightforward answer to the question, do you really think Scope 3 is not your problem?
He said, "No, it's not my problem." You made great steps after that. Today, my question to you, Mr. Looney, is, do you really think that BP can be Paris-aligned without re-reducing BP's total Scope 3 emissions by 2030 in a large scale?
Mark, thank you. Thank you for the question and for the engagement. Helge, if it's okay with you, what I would suggest is that we had one related question from another shareholder that was registered in advance. I'll just read that out, and then we'll respond both to Mark's question to Follow This and to the registered question. The registered question is.
Thank you.
The registered question is from Mr. Stylianou. Again, as I say, on a similar theme, why is it that the board is recommending that we vote against that we shareholders vote against the resolution on climate change targets? His comment was that he expected BP to be more aware, open-minded, and progressive. Helge, shall I pass that to you?
Thank you, Mark. Good to see you again, and good to see you at our annual meeting. It's always good to have our challenges. I suggest what we do is maybe I give a little bit of context as the board has thought about it, and I'm sure that Bernard can go a little bit more into specifics on your question. Let me start by saying that we share full of this desire for the world to meet the Paris goals.
We believe this resolution, as I've said in my opening remarks, risk disrupting BP's coherent and also integrated program of transformation is the totality. We agree with you that the world needs to reduce absolute emissions and transition away from oil and gas. That's the basis of our strategy. That's why our ambition has two parts: to get BP to net zero and to help the world get to needs net zero too. I think it's fair to say that we are in action on both parts. Since we set our ambition, we have made some very significant progress.
I think you will agree a 41% reduction in Scope 1 and 2 emissions under Aim 1, a 15% reduction in Scope 3 emissions under Aim 2, and also reducing methane intensity over operations by nearly two-thirds under Aim 4. On all of these matrices. We're also investing more into our transition. Bernard talked about we have moved our investments into transition engines from engines from 3% to 30% of our CapEx into bioenergy, EV charging, convenience, renewables and power and hydrogen.
We are in a different direction than we were in the past. In February, we announced that we are deepening investment into our existing strategy too. As part of this, and again, the numbers are high, we are now aiming to invest between $55 billion and $65 billion in this decade in these transition growth engines. We are going at pace. Why is that important?
Because we believe that the key part of our contribution to the Paris goals is to give customers lower carbon choices that the need, that the world needs and also wants, and lower carbon choices that help them to transition away from the hydrocarbons on which today's energy system mainly depends. That's exactly where we see most of these transitions spend going. Again, EV charging, bioenergy, renewables and hydrogen.
That is why we have Aim three using carbon intensity to reflect our progress in delivering lower carbon alternatives. Our contribution to the Paris goal is broader than any such metric alone can hope to show. We are investing at scale under our latest plans in those lower carbon alternatives. We are also advocating for low carbon policies, importantly, to accelerate the transition, like the Inflation Reduction Act that we supported in the US, and also generating value for our shareholders to keep BP strong.
The great business opportunity presented by the transition itself. In short, we are building a BP that produces the energy on which society depend on today while helping to build the energy system for tomorrow. Ultimately, the Follow This resolution, and again, risks disrupting this coherent-An integrated program of transformation, nor does it, in our view, take into account the actions BP has already taken.
That's at the heart of why the board has recommended that shareholders vote against it. Our rationale was, I think, very clearly put out on page 29 of the notice of meeting, I don't know, Bernard, whether you wanna add a few thoughts.
No, very happy to. Helge and Mark, good to see you. Haven't caught up in person in a while, but, as ever, we, as Helge said, we're very aligned, and we respect your goals. But if I could add a couple of things, and that may or may not be helpful, but I hope it'll be helpful. Mark, you say that you believe that the resolution itself is simple.
I can assure you the challenge is not. It's an incredibly complex one that simply cannot be boiled down to a few words in a resolution. I say that for the following two reasons, if I may. The first is around, you mentioned the IPCC expectations of a 45% reduction in emissions by 2030. Of course, the IPCC, we have enormous respect and regard to.
For everyone, that doesn't mean that every sector reduces by 45%. In fact, for oil and gas companies, it means about a 10% reduction in demand by 2030. BP actually is going to be 25% lower, you would argue more on the aggressive side of that. The majority of the reduction is gonna be driven by coal this decade. 70% of that reduction is gonna come from coal, actually, this decade.
That's not my words. That's the language of the IPCC. That's just one thing I want to make sure everyone understands. Then the second one is just a, an example. We mentioned this company, TravelCenters of America, that we are in the process of buying. It's still subject to shareholder approval and regulatory approval and lots of things, I have to caveat it with all of that.
Let's just put ourselves into that little story for a moment. To help the world transition, just remember that in the United States, 70% of all freight in America travels by road. 70% of all the freight travels by road, an enormous trucking and logistics operation. Many of those companies that operate those fleets want to decarbonize, and they want companies like BP to help them decarbonize.
What do we need to do to give them to help them? We need to do two things. We have to have the products that help them, and we do. We have biogas we have from Archaea. We have biodiesel from our Cherry Point refinery. We have EV charging from our Pulse network. Over time, we will have hydrogen as it emerges in trucking. That's one thing you need.
You need the products. The second thing you need is you need the infrastructure. You need the physical sites to be able to put that offering on. That's what this acquisition is about. Now, when we buy that, Mark, if it completes, our reported emissions will actually go up for a period of time. The world's emissions won't change, but BP's reported emissions will actually go up.
Actually, we believe that we can help the world and that United States trucking and logistics center transition much faster than it might otherwise do because we have the balance sheet, we have the capabilities, and we have the ambition to help them to do that. That's an example of the complexity in this subject. What on the surface might seem like going the wrong direction is actually helping the world transition. I think it's very important also that the shareholders in the room and the shareholders on the line understand why we are saying that this is not the right thing to approve. Back to you, Helge.
Thank you, Bernard. Ben.
Thank you so much for the answers. Thank you so much. Very long answer, let me try to remind the shareholders what the question was. The question was, do you really think BP can be Paris aligned without reducing BP's total emissions by 2023, 2030? That was the question.
I had a long answer. I didn't hear an answer to this question, maybe that's good. You also know that without large scale emission reductions, you cannot be Paris aligned. I hope today shareholders realize this and vote, use the power of their vote to encourage you to align your targets with the Paris Climate Agreement. Thank you so much.
I think, Bernard, do you wanna give a quick response to that?
We absolutely believe that when you look at our aims and all of the work that we are doing, that we are absolutely consistent with Paris. I say that for the following reasons. Number 1, the IPCC information that I just gave, where the IPCC would call for 10%, or for 25%, or a 10% reduction, our production is going down 25%. Secondly, we are advocating around the world to help drive these policies in support of things like the IRA, in support of the transition on policies to electric vehicles.
Thirdly, Mark, we're investing. We're investing to help the world transition. Lightsource BP did 0.7 gigawatts of renewables of solar in 2019. With our help as their partner in 2022, they did 2.7 gigawatts. The same goes to EV charging, to hydrogen, to sustainable aviation fuel. When you look at the totality of what we are doing, including making BP a more resilient company to climate change, we absolutely believe that in totality, we are indeed compliant with Paris. Thank you.
Okay. We've always commanded BP's big steps in the last five years. Shareholders, I have to be honest to your CEO, if he's telling you that he's, with this aims, he's Paris aligned, he's misleading his shareholders. I'm sorry about this.
I think, if I may, Helge, I think, Mark, the point's been well made. I think the board's position is well stated, as you will have seen, the shareholders will have read in the proxy materials for today's meeting. Thank you very much indeed for your question.
Thank you for coming. What we will do, and I hope that's also answered Mr. Filiano's question, what I want to do in the interest of time, if that's okay, Helge, is to move on to Mr. Crossman, Matt Crossman from Rathbone Investment Management. I know you had wanted to come and put your question to the meeting. Thank you for taking the time to come and see us today. Appreciate it.
Great. Thank you so much, Mr. Chairman, good afternoon, fellow shareholders here in the room and online. As you've said, my name's Matt Crossman from the Rathbones Group. I'm here today as a corporate representative. We're a wealth manager. I'm here representing many hundreds of our clients who have shares in the company. Mr. Chairman, my question's for you and all the members of the board, and it regards page 87 of the annual report and accounts that we're discussing currently.
We're told that the board considered a number of climate related issues during the year past, including approving and agreeing to put to shareholders the opportunity to vote on the net zero ambition report at the 2022 AGM, a report which summarized our company's net zero ambition and the actions we plan to pursue it. Mr.
Chairman, the global investment community, of which Rathbones is a part, has welcomed greater transparency on climate change. The 700+ investors in the Climate Action 100+ initiative currently represent $68 trillion in assets under management and broadly welcome companies attempting to formalize their net zero plans and put them forward to scrutiny at AGMs just like this.
It shows a sound approach to risk management on a systemic issue that affects our long-term financial and societal future. Mr. Chairman, it also shows good faith in seeking partnership with key stakeholders on a defining issue for our company's future. I don't need to remind the board, but for the good of my fellow shareholders, last year, some 10 billion shares or 88% was cast in favor of the net zero plan.
This was a sound endorsement of the company's leading strategy on climate change in the various threes and three years that the Chief Executive has mentioned so far in the meeting. This brings us to the announcement, the strategy announcement the company made in February, which has been referenced in a number of remarks so far.
One thing which hasn't been referenced yet is that within that strategy update was the slight change in attempt to scale back certain crucial leading elements of our company's climate targets. Again, those targets discussed and approved by 88% of shareholders. Our company was one of the first oil and gas companies to announce an ambition to cut emissions to net zero by 2050. The move in February caused the brand reputation to be challenged.
Given the recent IPCC assessment report on the context, it seemed an odd time to be seen to be scaling back climate ambition. Clearly the experience of the last year was another unprecedented year in which the energy transition unfolded at an unpredictable and rapid pace.
I'm not here today to question the wisdom of management in responding to the seismic shifts in global geopolitics and soaring commodity prices that we saw in the wake of record financial results for all shareholders. My question is a simple one. If 88% of shareholders approved a level of ambition last year and management sought to change that level of ambition, why aren't we voting on the revised plan here today?
Thank you, Mr. Crossman. Again, thank you for coming to raise that question with us today. Helge, we have a similar question, registered from a shareholder, Mr. Mack, which was about why the board didn't consult with shareholders when changing the carbon reduction strategy as we have. I'd suggest maybe just in the interest of time, 'cause there's still a lot of questions to get through, that maybe we try and address both those questions in one, if that's okay.
Yeah. Thank you, Ben. First of all, Matt, thank you for your question and also for coming and attending the meeting. Really appreciate it. Also thank you for your question, Mr. Mack. We certainly indeed respect your views. However, also respectfully disagree with your description on what we are actually doing as a board and as a company. To be clear, our strategy is not changing, our destination is unchanged, and it remains actually to get to net zero by 2050 or sooner across our operations, production and sales. Importantly, our ambition to help the world get to net zero is also unchanged.
In general, on top of that, during extensive engagement with investors, we have heard little appetite to date for a new resolution from BP, both before the announcement of 7th of February and after. Of course, there are always a range of views on topics such as this, and we work to engage widely and understand those views. In that engagement, the majority of our shareholders have been very clear with us that their role is not to encroach on the directors' responsibilities, and therefore they are not asking for an opportunity to vote on our strategy or any related aspects of our ambition and aims.
While there is no mandatory requirements to offer an annual say on climate, and as we have said, we will keep under review whether to offer a shareholder vote on our net zero ambition in the future if we believe it's appropriate to do so. Either way, we'll continue to provide annual updates on our plans and progress,
I think most of those that read our annual reports and the other reports will see that we're quite detailed in reporting on this in the sustainability award report and also in the net zero ambition progress update. Our commitment to transparency. Importantly, we will continue to engage with you and all the shareholders and welcome their range of views as we move forward. Again, Matt, thank you so much.
Thank you. I think, Helge, that answers both of the questions that were raised. Just again, trying to move things along 'cause we have a lot of questions on the understandably on the climate. We have a question then from Mr. Mason, that was registered, which was on the following line. It says, "Greenwashing is immoral. Why does BP do it?" That's the that's the question. He calls for BP to invest its profits in low carbon energy and to stop investing in oil and gas with more than a 15-year production horizon. Bernard, would that be one for you to pick up, if that's okay?
Yeah, very much, Mr. Mason. Thank you very much for your question. While greenwashing will mean different things to different people, I'm sure we don't agree with greenwashing, nor, by the way, do we believe that we do it. I just wanna make two points, if I may, Mr. Mason. The first is that we are focused on action. It was actually a shareholder who said to me,
"Don't tell me about what you're doing, show me what you're doing." I thought that was quite right. Words are cheap, as my mother used to say. We are focused on actions, not words. When I say that, we talk inside the company about, as I said in my opening remarks, about shovels in the ground, because I'm a believer that nothing changes on a PowerPoint slide.
Things are only changing when we're digging a hole in the ground, whether it's putting in the foundations for a new hydrogen facility or putting in the cable for a new charging station or putting in a new turbine offshore. It has to result in physical work, and that's my push to our team, which is we need shovels in the ground. If I look at probably the best metric that I can give you, which is, are we spending money in this space, the answer is very clearly yes.
As I said earlier, 3% of our capital in 2019 went into our transition growth engines. Just 3 years later, that number was 30%. That is, I think, incredible change in a relatively short space of time in a company of our size. It is about actions, not words. It's about shovels in the ground. Then just the second thing I want to say is that transparency matters in this space. As we are doing those things, we're also very transparent, and you will see it in any of the advertising that we ever do, that we put at the bottom that BP is predominantly an oil and gas company today.
We are generating and drilling wells around the world. We're bringing on new projects. We're investing in that. We were clear in February that we would invest up to $8 billion more in hydrocarbons this decade. Transparency matters. We are also in the oil and gas business, and we're in that business because that's what the world needs today to keep the energy flowing and to keep it affordable.
Having us do it, I hope, rather than something else, somebody else, means that it will be done with the lowest possible emissions. It's about actions, not words, shovels in the ground. It's about transparency, and I hope we're being transparent.
Thank you. What I'd like to do, Helge, if this is okay, is we have a question in the room, I believe it's in this room from Mr. Miller, David Miller. I can't see. Yes, Mr. Miller, thank you. Would you like to go ahead and please ask your question?
Thank you. Good afternoon, chair and board. Quick aside before I ask my question. Back in the day, I used to run the British Gas AGM. I have experience of lively and controversial AGMs. I suppose this was epitomized at its height with Cedric Brown, our CEO at the time, who was accused of being overpaid in his salary.
The unions brought a whole load of pigs and a trough to come and demonstrate against Cedric Brown's salary. We managed that situation. What I wanted to say was that the oinks of the pigs, in my mind, had more coherence than some of the earlier interruptions that you guys experienced this morning.
Which segues me into my question is, it is absolutely clear in my mind to any rational and objective person that climate science is not settled. Indeed, it is far from settled. It is also clear in my mind that the headlong rush to net zero in 2050 will have catastrophic economic consequences.
Indeed, it was reported to me that a previous chairman of your board earlier this week had suggested that the global economy would have to contribute 6 trillion, and I'm not sure if it's dollars or pounds, but hey, we're at 6 trillion, doesn't matter, dollars or pounds, a year to have any chance of getting to net zero by the arbitrary date of 2050.
I am concerned, and looking around this room, many people's grandchildren, our grandchildren, in some cases I can see great-grandchildren, are going to have a job and an economy to live and work in in 2050 and beyond. There is a future for fossil fuels going out to the end of the century.
My question to you, the board, is I understand you operate under this media, political, pressure group, you know, world out there of believing that the world's in crisis and you have to go headlong to show all your, what you're doing. I'd ask you to grow a pair and actually enjoin the, a adult and grown-up debate about the realities of net zero and the role that fossil fuels will play for us as an economy going into the future. Thank you.
Thank you. Thank you, Mr. Miller, and in particular for your remarks regarding the conduct of the AGM, well noted. Helge, could I pass Mr. Miller's question to you?
Mr. Miller, thank you for your question, let me try to tackle it, and maybe you can add on a little bit, Bernard, if you will. Starting point is, of course, that this is not a disruption. It will change and develop over decades because energy is part of every part of the society. When we developed our strategy, we saw and still see the Intergovernmental Panel on Climate Change, IPCC, as the most authoritative source of information on the science of climate change. The science is, as we see it, pretty clear. The world is on an unsustainable path and the carbon budget is actually running out, and we need to deal with it.
We believe that the world needs a transition that is rapid, but that is also orderly, and that was also a key part of the adjustment of the strategy we made in February. We see ourselves as an integrated company, we're investing, as Bernard said earlier, $8 billion more in this decade to support the current energy system, primarily oil and gas, then $8 billion more in terms of building low carbon businesses, what we call the future growth engines of BP. That is a foundation of our strategy and our strategic direction. Perhaps, Bernard, you wanna add?
No, Mr. Miller, I very much appreciate your remarks. I think we're, in many ways, we're broadly aligned. Even the IEA net zero scenario, which is 1.5 degrees, which is no overshoot, has 20 million barrels a day of oil and gas production in 2050. Even that IEA scenario has $455 billion of investment in oil and gas this decade. People don't like to talk about that's the truth.
As Helge says, what we're trying to do is we believe it's important that we do both. We believe it's important that we continue to invest in today's energy system, which from an oil and gas standpoint represents about 52% of the world's energy. It needs that investment.
We get that need from society, from governance, governments around the world. We will continue to do that. At the same time, we believe that there are opportunities that we can do to help the world diversify its energy mix and things like sustainable aviation fuel or EV charging or whatever. I come back to Mr. Miller, what we talked about earlier. This is not an either/or conversation for BP. It is very much an "and" conversation, that's really the essence of the strategy that we updated you with in February. We very much appreciate your remarks.
One quick one. The IPCC report is not a Bible. It is merely a set of computer models and predictions, please don't rest any laurels on the IPCC report. All I'm asking you guys really is to be the grown-ups in the room and to recognize that there are a whole set of consequences which are coming into play, not only in understanding climate change and climate science, but also the economic consequences. I would just like to hear a bit more from BP of adult conversations rather than bending in the wind to all the various lobby groups. You guys need to help develop proper adult conversations. Thank you.
Thank you.
Thank you, Mr. Miller. I think we move on.
Thank you. Thank you, Mr. Miller. Helge, we will move on. Very conscious of time. I think, in the interest of time, we will just take maybe two more questions under this section because there are many others that we wanted to try and deal with today. We've amalgamated three of the questions that we had submitted in advance.
The questions were in sum to ask the board to outline why it is they are taking action to tackle climate change, whether they believe climate change is caused by human activity, and why it is that BP is choosing to continue to invest in fossil fuels rather than renewables. Helge, is that something you wanted to...
I think we already discussed this a little bit, but thank you for the question and let me just reiterate the key points. We see the Intergovernmental Panel on Climate Change, as I said, as the most authoritative source of information on the science of climate change. In our view, the science is clear. The carbon budget, as we discussed before, is running out, and we need to deal with it. We believe that our net zero ambition and aims, again, taken together, set out a path for BP that is consistent with the goals of the Paris Agreement. What do we mean by consistency with Paris?
That means that we are consistent and meeting the goals set out in the articles of articles 2.1A and 4.1 of the Paris Agreement on Climate Change. They believe that our ambition and our 10 net zero aims need to be considered as a package for carbon consistency. That is because they combine to set BP's direction for net zero, supporting society's drive towards the Paris goals and enabling the BP to succeed also in the Paris consistent world, i.e. making BP more resilient. I leave it with that.
Thank you.
Ben. Thank you.
Thank you, Halvard. Again, thank you for the question. I think the last one, if that's okay, Halvard, we'll take under this particular section is from Laura Peterson. It's a question that's been sent in to us online. She is attending the AGM as a representative of the Union of Concerned Scientists. Her question relates to BP's approach to reducing absolute emissions from its global operations.
"Internal corporate documents," she writes, "reveal that BP is using asset divestments as a substitute for real reductions in global warming emissions." She says, "According to documents made public as part of a House Oversight Committee investigation, a BP executive wrote to employees in March 2021 that divestments are and continue to be an important part of our strategy.
They enable us to strengthen our balance sheet and high grade or diversify our portfolio. While these divestments may not directly lead to a reduction in absolute global emissions, they can accelerate the pace BP can grow low carbon to businesses that underpin our aim to reduce oil and gas production."
The question, finally, is, "Why is BP knowingly using financial maneuvers," this is her word, "using financial maneuvers to evade its responsibility to reduce absolute emissions from its operations?" Bernard, is that okay for you to pick up?
Very good. Laura, thank you for the question. I don't know who the BP executive was. It may well have been me. All I would say is that the memo is entirely accurate. We absolutely use divestments as a part of enacting our strategy. We're very, very transparent about that. Where divestments contribute to our emissions reductions, we're very, very transparent about that.
Rest assured that when it comes to our aim one, which is Scope 1 and 2 emissions, people right across the company inside BP are heavily engaged. I am in many meetings discussing how we can accelerate, and we've got a meeting coming up on this, what more we can do to drive operational emissions down inside the company. The note is correct. We will continue to divest.
It's part of normal portfolio management, high-grading the portfolio, making it better, making it higher quality. It's not financial maneuvering. It's simply trying to create value and certainly not about selling emissions. We're very transparent where the emissions reductions come from, and we are absolutely focused on reducing our own operational emissions, and I can point to projects all across the world, whether it be in Germany, replacing the power for the facility with renewable power.
These are the types of things that we're doing and evaluating right across the world. I understand your question. I think we're very transparent in this case. Divestments are part of the strategy. It isn't financial maneuvering, it's financial optimization. It's optimizing our portfolio, and if we have emissions that are associated with those, we're very transparent in our annual report about that. Hopefully that helps, Laura, and happy to talk to you afterwards if you'd like to.
Thank you, Bernard, thank you for that question. Halvard, I don't see any other questions that we have on this topic, so I'm going to move on to the next area, which was in relation to the company's dividend. Maybe this will be for you, Halvard, and perhaps also Murray to cover a little. A number of questions, same area, so I will just summarize them.
Questions being, we have received multiple questions. Why is it that BP is not increasing the dividend? I think maybe related to that, we had another question from Mr. Holman about what % it is of profits that are paid over to shareholders. After that, there was a question from Mr. Arunditz in relation to the dividend reinvestment program, which Halvard, I'd be happy to cover.
Thank you, Ben. This is a very difficult time for society and people, and understandably focused on the global profits we are making from businesses around the world. Basically, we see our job as three things. One is to investing to bring the energy the world wants and needs to the markets. We pay taxes and of course, providing returns for the many people who actually own BP shares, and you in the room are all those.
A resilient dividend is BP's first priority within our disciplined financial frame. In 2022, we grew distributions through an increase in our resilient dividend and delivery of a material share buyback program on top of that, paying more than $14 billion in distributions. Taxes, we paid $15 billion.
In 2022, we paid more than $4 billion in dividends, and our dividend per ordinary share for the fourth quarter of 2022 was 21% higher than a year ago. Very importantly, it is fully accommodated within Our cash balancing point. The dividend decision is a matter for the board, actually each quarter. At BP's current forecast, we see a capacity for annual decrease in dividend per share of 4% at $60 per barrel oil price. We pay actually around 4% of all FTSE 100 company's dividends.
In setting the dividend per ordinary share and buyback each quarter, the board will take into account factors including the cumulative level of an outlook for surplus cash, and also the cash balancing point, and the maintenance of a strong investment-grade credit rating, because that is important due to the risk in the financial markets and in oil and gas markets moving forward. I think that's the framework that the board thinks about. Anything to add there, Murray, or?
That's good. Thank you. I think we've addressed both of those questions, Helge. If I may, I'll just pick up on the question from Mr. Erandit on the dividend reinvestment program. The question was, when will that program be reintroduced? I should just clarify, actually, you know, the board has opted to suspend the Scrip Dividend Programme. It was a different program.
The scrip program in relation to quarterly dividends, and we don't expect, the board doesn't expect to offer a scrip election for the foreseeable future, as we've already outlined. We're very much in the process of buying back our own shares right now rather than issuing new shares.
Of course, ordinary shareholders and ADS, or American Depositary Share, holders, have the option, subject to a few exceptions, but they do have the option already to participate in the dividend reinvestment plan. We have details of that actually in our reporting documents, but if you've got any questions about that, please let us know and we'll try and point you in the right direction. Thank you for that question. We then had Helge, a question at point A, from Mr. Torrey. Peter Torrey, welcome.
Good afternoon, Mr. Chairman, my fellow shareholders. I'm an individual shareholder from Hendon in North London. I like to attend the AGMs, whether it be BP or fun-loving Shell, as it was last year. The interruptions you had here today was paled into insignificance to what happened last year. We almost had a riot. Mr. Chairman, it's coming here today, I was trying to put together my question, statement, rhetorical questions, et cetera, you've touched on it very briefly about the market forces regarding the price of oil.
It's out of your control, isn't it? If you make a big profit because of market forces, is that such a terrible thing? It's not your fault, is it? Anybody's fault. It's the market forces, Russia, Ukraine, et cetera. This takes me back now. I'm trying to put the egg and chicken egg scenario together. Going back to Deepwater Horizon those years ago, you didn't pay a dividend for three terms, did the government give you a refund on the taxes that you paid?
Because now they're making you pay this windfall tax, aren't they? It's outside basically of your control. Agreed? Also, I had the good fortune to go down to Mission in Texas, which is right on the very bottom of Texas. I drove all the way up to Charleston, South Carolina, and I took the side roads, the coast road, and I distinctly remember stopping at a lovely place called Destin, and I asked a couple of fishermen there, "Were you affected by the pollution?" They said, "Not at all." I'll choose the words carefully here for delicate ears.
They said, "BP's been had over on this." Did anybody actually from the board or the company go out and actually look with their eyes instead of doing everything which seems to be now online? Did they actually go and see if there was pollution out there? We know there was, but it wasn't all over the place, surely, and you must have paid an awful lot of money. It's a sort of rhetorical statement question, not controversial. I'm just very interested to know what actually happened and about the taxes as well.
Yeah.
Deepwater Horizon and then the market forces.
Thank you.
Sorry if I didn't put it together too well, but I think you get the gist of what I'm trying to say.
Perfectly clear. Thank you very much, Mr. Torrey, and thank you for attending and raising that issue with us. Maybe, Helge, I would, I would just suggest again in the interest of time, that actually that question leads into some of the other questions we've had in relation to the U.K. tax environment. Maybe, Murray, this is something that you could pick up as well as responding to Mr. Torrey's questions. I'll just play back to everybody, the questions that we have registered in relation to tax.
The first of which was from Mr. Rayner claiming the, or, "BP blames the huge increase in the price of fuel on our suppliers, and then you announce record profits. Why shouldn't we be paying a windfall tax?" I think a second and not unrelated question was from Mr. Jones, which is about, "Why can't the U.K. government give BP a tax rebate on the windfall tax now that oil prices are a lot lower?" The third and final one, which I think is probably sensible just to sort of assemble into one, is that a question that we have from Mr. Hayes, who says, "What impact will the opposition party's windfall tax have on profits?
Yes.
Maybe I can plant those via Helge through to you.
Maybe, Murray, a few sort of framing comments, thank you for your question, Mr. Torrey. In many ways, we are in an industry with lots of risks in every dimension of the word, technology risk, market risk, commercial.
... risks, political risks, geopolitical risks. To some extent, big energy companies are risk management institutions. I think a consequence of that, there are so many factors that you cannot control. You need to build a strong balance sheet so you can withstand sort of the pressures that from time to time come on companies. The financial frame that Murray, Bernard proposed to the board three years back is exactly set up to make sure that we stay strong, but at the same time, we can serve shareholders with dividend.
I just wanted to say, as a matter of principle, that taxes is for the authorities in the different countries we operate to assess and to decide, and we have to live with that in those countries we are. Perhaps after Murray has spoken on the tax, perhaps you wanna say a little bit about Gulf of Mexico. You have been there a lot also after the Deepwater Horizon and of course, can give a more precise feedback to you, Mr. Torrey on that. Murray, perhaps first.
On the taxation points, in the United States, we haven't paid very much tax over the past few years, due to losses incurred through the Deepwater Horizon, so there haven't been many taxes paid. We'd expect to move into tax-paying position sometime soon, but we haven't paid for quite some time. In the U.K., as you said, Chairman, taxes are a matter for the government, and we're not gonna speculate on what could come from changes in government. As a matter of fact, yes, we have had windfall taxes in 2022. In Europe, we had the solidarity contribution, which was a charge of about a half a billion euros for the company.
In the UK, we had the Energy Profits Levy, which increased the overall tax in the UK North Sea to 75%. Three out of every four dollars we make in the UK now goes to the government. For 2022, that was $2.2 billion, as Bernard said earlier, $700 million of which was made up from the EPL. That's the answer to the tax part of the question. Bernard, over to you.
Mr. Torrey, thank you. Destin is indeed a beautiful place, a beautiful beach, and I'm sure you had a great drive and I can't speak for the other board members, but I know we have board members who have homes in Texas and in Florida. In my earlier years post the accident, I spent a lot of time going offshore, going through South Louisiana.
It's an area that we know pretty well, and I don't think it's also controversial to say that I think the Gulf of Mexico itself has recovered well. I don't think that's controversial. The issue with the accident, of course, is goes back to the fact that 11 people lost their lives in 2010. That's why we come back, Mr.
Torrey, to safety always being the first thing that we focus on because people lose their lives, and it can have enormous impact on communities, on the environment, and indeed on our company and on you. Therefore, that's why we hold it in such high regard. Hopefully, that's a little bit helpful and happy to chat afterwards also.
Thank you. Thank you. I'm sure I speak on behalf of everybody. We thank you for the dividend. Thank you for the increase in the dividend. It's nice to have an investment income, and I have no complaints or qualms. I sleep well at night. I invest in my money. I take the risk. When things go down, you lose. When things go up, you win. It's like that's the way of life. It's very nice to have the, is it U.K.'s largest company providing us an employment for everybody. Thank you for all the good work you do. Thank you very much for your time.
Thank you so much.
Thank you.
Thank you, Mr. Torrey. Appreciate your remarks in particular. We have then a question in the room from Captain David Hawker, who I think is coming up to the question point. As he is coming up to the question point, if I could just take the chance to remind everybody that the poll on the AGM resolutions is still open. Please do cast your votes for those resolutions whether or not you're in the room if you haven't done so already. Thank you, and Captain Hawker, welcome. Over to you.
Thank you, sir. I have two questions, unrelated. First, I never served in the BP tankers, but when I was serving, the BP tankers had a very good reputation for their service and the way that the men were treated. What is the current size of our tanker fleet? I believe it is a credit to Britain, and can we get this publicized, such as on television? The second question, sir, is there any way that some of our profits can be used to help the people suffering financially in Britain? Can we get that on television?
Thank you. Thank you, Captain, for your question. Bernard, would you like to pick that up?
Very good. Captain Hawker, lovely to see you as always. I should add that Captain Hawker, painted a little painting of RMS Mauretania for us following last year's AGM, which we have and we're very proud to have. Captain Hawker, thank you for that and thank you for Your two questions. In terms of the ships that we have, our BP shipping fleet, we're very proud of our shipping men and women that operate throughout the world today.
They actually went through enormous hardship during the pandemic. Enormous because what would normally be maybe a three-month crew change or a six-month crew change, because of the restrictions that were in place in ports around the world, these people, these men and women, were sometimes at sea for nine, 10, 11 months. It was one of the most challenging aspects of the pandemic for our people. I think it's very hard for us to understand just what they did, quite frankly, through that process. We have, Captain Hawker, to your question, we have 12 total ships today.
We also have 58, what we call time-chartered, vessels. This shipping fleet is run by one of our executive vice presidents, Carol Howle, who has a great interest in this area and in the safety of that fleet, and it's something, as you say, that we're very proud of and, I'm delighted that you have asked a question about it and, I can get to talk about those men and women who do, I think, tremendous work for BP, but tremendous work for society as they move energy safely, around the world. In terms of the cost of living crisis, I think we're doing what we can.
I think I don't want to repeat what Helge says, Captain Hawker, but I think the ways we can contribute are, we can invest in the energy system. That's what we're doing, $16 billion last year. We pay our taxes. We paid $15 billion, so we invested more than we paid taxes last year. Then we have to take care of our owners, you all, and make sure that you get the return on your investment. We, as Helge said, paid about $4 billion in dividends last year.
Beyond that, we have paid millions of GBP and to charities here in Britain last year to help where we can. Our people wanna help Captain Hawker. They volunteer. We have policies to help people volunteer so that they can give time. We try to do work with charities right across Britain. We don't say so much about it, but I can assure you that we do. We do what we think our big role is, which is, to invest, to pay those taxes and to, take care of you. Captain Hawker, thank you for that question.
May I just quickly say, can we have representatives of BP, shall we say, trained in public relations to, particularly on television, get this message across to Joe Public?
Thank you. I thought for a moment you were suggesting I needed some training. It may well be true, but I understand your point, and I appreciate it, Captain Hawker. Thank you.
Thank you, Bernard, and thank you, Captain Hawker, for those questions. However, I think we should move on then to the next area, if you agree, on environment and safety. I wanted to jump to a question we've had from Dr. Walpole. This was the question that was registered in advance of today. I'll read it out.
It's great to hear that BP is taking its social responsibility seriously and has a target to cut oil and gas output by 40% by 2030 and to spend $5 billion a year on low-carbon projects. In working to meet these targets, he says, "What will BP do to ensure that projects and interventions promote human rights and health equity, including allowing indigenous groups to steward the land and earth resources?" Bernard, I'm sure you'll want to pick that up.
Very good. Well, Dr. Walpole, thank you very much for your question and your particular interest in this area. No matter where we do business around the world, we obviously aim to do so responsibly, and we aim to respect the rights of the workforce in that area and indeed our neighbors in that area. We have aims, aim 12, which is about supporting a just transition that advances human rights and education. We have a human rights policy that obviously calls out the need to respect the rights of all people, including, to your question, indigenous people.
It recognizes that it's important that we identify indigenous people, that we consult with indigenous people, and it sets out how we apply the principles of free and prior and informed consent, where practical, ideally before we begin activities. On health, we are aiming to understand the top health and well-being issues facing communities where we work, including indigenous communities. By 2025, Dr. Walpole, we want to allocate 10% of our social investment towards sustainable solutions that address priority health issues.
There are some of the things that we're doing on a policy framework, on an investment framework. I would just add that our people aren't just doing that because of those policies and aims and frameworks. They're doing it because they want to do that. Our people, as you would expect, are good people.
They go to these countries, they're employed in these countries, they have the same desire that you would expect any good human being to have, that we respect each other, and we treat each other well, and we look out for each other. That's what our people are like. Yes, we have supported policies and aims, but at its core, we have good people who take a great interest in this. Do what they can to make a difference. That's what I would say, Dr. Walpole, and I hope that's helpful.
Thank you, Bernard, and thank you, Dr. Walpole for the question. We now within this section have a question on gas flaring in Iraq. This is a question on the telephone. Operator, if you could open the line and allow for the Ali Hussein Al-Mada to ask his question, please. Do we have the line open?
The line is live. Please go ahead with your question.
Please ask your question. Thank you. Do you hear us?
Hello?
Ye s. Hello. Hi. You're connected to the AGM of BP. Welcome. Please go ahead. Ask your question.
[Foreign language]
Okay. Hello, I'm Hussein Jalloud, speaking with the aid of an interpreter from the south of Iraq. On Friday, I lost my 21st year old son, Ali Hussein Jalloud, from leukemia caused by pollution. He'd been suffering with the disease since he was 15 years old. My son grew up here in Rumaila, Iraq, inside one of the biggest oil fields in the world, run by your company, BP.
From the door of our house, Ali can see the black smoke of gas flaring 24 hours a day. We can smell the toxic chemicals from these flares in this region and neighborhood. Of the flares of the oil fields. Well, sometimes it gets very difficult to breathe. Oil rains just like rain. A lot of people are sick here because of this pollution and this air.
Cancer is very spread in the region. Cancer became just like a flu. Everybody could be affected. BBC recently made a documentary which proved that there are high levels of chemicals, benzene in the air and that our children in our children's body. His greatest wishes were that gas flaring and pollution would stop because he loved nature, and he would that pollution would not affect his nature. His favorite place was a small cabin inside his house. He wished, and all other children could enjoy playing and breathing freely outside.
Thank you. Okay.
[Foreign language]
Th is year you claim that you have reduced gas flaring and black smoke in Rumaila, but I can share videos with you taken from my home of the black choking smoke near my home taken this week, and nothing has changed. You also said that you are supporting our communities with a health fund, but the hospitals here are overwhelmed and overcrowded, especially those related to cancer cases. I had to sell every-
Hi. Are you still on the line?
Apologies. We are losing audio from that line, but the line is still connected.
It's still connected. I wonder, Helge, whether there's a preliminary comment we might wish to make while we're attempting to reconnect. Helge, is there anything you would want to say by way of introduction?
Yeah. Perhaps, Bernard, you wanna comment on the situation?
Very good. Mr. Hussein, salaam alaikum. I want to personally express my own condolences clearly on the loss of your 21-year-old son, Ali Jaloud. I can only imagine how difficult it is for you and your family, and I can only also pass on the condolences of the BP board, the BP leadership team, and indeed, all of us here at BP around the world. Rumaila is an oil field that I have visited several times myself over maybe the past decade or more. It is a field that is operated by a company called Rumaila Operating Organisation. BP is part of that group of partners. I don't say that in any way to distance ourselves.
It's just a matter of fact, and I think it's a matter of importance for people to understand that. Mr Hussein was commenting on, I think, a few areas that I can give an update on, and that I hope I can give shareholders around the world an update on.
The first is around gas flaring. We are continuing, and the Rumaila Operating Organisation is continuing to reduce flaring at Rumaila. In fact, over the past, I think seven years, flaring has reduced at Rumaila by over 65%, with 20% of that improvement coming in 2022. We are making progress. Progress is being made, and progress must continue to be made and will continue to be made. We want to reduce it as we go forward.
Secondly, black smoke was mentioned and we are looking, and the Rumaila Operating Organisation is working on this. They've prioritized 6 facilities that operate near local communities, and work was completed at 3 locations, and work is ongoing at 3 locations that we expect to have completed by the end of this year. I can't comment on Mr. Hussein's comment that he can still see it from his house. I don't know, but maybe it's one of these facilities, I'm not sure.
We are working, and the Rumaila Operating Organisation, the operator, is working on that. In terms of community engagement, we are working on that, as you would expect. In reference to the earlier question about how we engage with communities, we continue to engage with local community representatives. As you would expect, that organization is prioritizing social welfare, fund support for community health initiatives. We've delivered renewed communications.
We've improved staff training, and we're encouraging the reinstatement of community committees. You know, nobody wants to hear something as tragic as this. As I say, our condolences are with you. As I said, I can't comment on the cause of your son's loss of life, but that's not the point. He's gone and you and your family have lost a 21-year-old son that you shouldn't lose. On the issues that you referred to, I can assure you that it is an area that gets continued focus from the leadership team at BP, with some of the executives visiting and driving improvement as we have done.
Importantly, as the Rumaila Operating Organisation has done over the past several years, and we will continue to do so. I'm not sure there's much comfort there, but I hope that is in some way helpful. Thank you.
Thank you, Bernard.
Thank you, Bernard. Thank you, Helge. Thank you for that question. I don't believe we've been able to reconnect the line there, but I think I hope Bernard's comments will have been helpful in the circumstances. I would like to move on to the next question, which was submitted in advance from Mr. Lakshminarayan, excuse me. On the question is on racial inequality in the workplace, asking what it is that BP is doing about the opportunities for a third generation of British-born ethnic minorities. Helge, is that a question you'd like to-
I can do that. Thank you, Ben. Important question, important for BP, important for the board, and for Bernard and the whole team at BP. We aim at creating a business where our colleagues feel safe at work every day. In 2020, we established our framework for action against racial injustice and set ambitions for representation in the U.K.
Our goals are 50%, 15% representation at senior leadership, and above, 25% representation across levels, and a 20% or greater uplift in the Black representation across all levels. We have seen a steady improvement in the U.K. minority senior management representation driven by hires and promotions, and our middle management representation has also increased. We are focused on improving and driving inclusion further.
For example, we have talent attraction and hiring practices which leveraged market, leverage market data insights on available skills and demographics to help us build a diverse shortlist, very important. We are working to extend our reach to diverse talent pools by seeking to understand and remove current potential blockers.
Our most senior leaders have access to diversity data, so we can set the tone at the top for the organization, I think we all know how important that is. We run mandatory race education training for all our U.K. and U.S. employees. Around 9,000 employees altogether have been trained to date through these programs. Very comprehensive effort. We are making progress. More to do.
Thank you, Helge, and thank you for the question. We'll move on to a further pre-submitted question, which is workforce related. What progress has been made on transparency and accountability for addressing bullying and harassment cases by managers, especially those targeting female subordinates? Helge, did you want to?
Yeah. Again, a very important question for the board in the oversight role. The board takes seriously its responsibilities to assess and also monitor culture at BP. We actually receive updates on key cultural metrics to help our assessment of whether BP policy practices and behaviors are aligned with the company's purpose and also values and, of course, strategy.
We want to have a speak-up culture at BP where everyone is able to raise concerns safely and without fear of any retaliation. Our code of conduct sets very clear expectations for all of us, both bullying and harassment, and how we address concerns when they are raised. Concerns and inquiries can be raised through multiple channels, which include our confidential global helpline, what we call OpenTalk in the company.
That is actually available 24/7 in more than 27, no, sorry, 75 languages, even better. One of the hallmarks of a strong organization is how it listens to all concerns raised and addresses them as appropriate. Our ethics and compliance team is responsible for oversight, governance, and reporting on BP's process for addressing concerns and is investigating potential breaches of the BP code of conduct.
They're also transparent about the number of concerns or inquiries received every year, and we follow them tightly throughout the year. We also take steps to identify and correct areas of non-conformance and take disciplinary action where it is appropriate. BP has, of course, 0 tolerance for retaliation, just to say that. Thank you.
Thank you, Helge. Thank you for the question. I'd now like to move to a question in the adjacent room from Mr. Nasser Rafiq. Mr. Rafiq, we can see you.
Hello.
Hopefully, you can hear us. Please go ahead and ask your question.
Good afternoon, Chairman, fellow board members and shareholders. My question goes on the fact can we consider as a company doing an audit? On the past behavior of the business and the human cost. For example, people are looking at slavery now, seeing how they made profit from it or exploitation of indigenous communities where profits got made. I'm not blaming you for the past, but if you look at the history of BP and how we came about, how the people of Iraq, Iran, in that area didn't get any profits, the profits went out.
What can we do to make sure that the communities where we make money, that those communities prosper? Because it's, you know, the world's changing and capitalism needs to change. I'd just like to say to fellow shareholders, to those shareholders that want capitalism to change, we can use BP as a company to make sure that we're not focused just on profit.
We focus on providing our contribution to a world which cares and makes everybody out of poverty. To those shareholders who are only interested in their own pockets, things are going to have to change, because the world's in the mess we're in because people have always thought about money. I like the changes your board is making. What are we going to do now to try and make sure we move forward and set an example? Thank you, Chairman.
Thank you. Thank you for the question. Helge or Bernard?
Yeah. I think this is a question that maybe, Bernard, you wanna comment a bit on because this is, was a very central part also of changing the purpose of BP when we changed the strategy back in 2020. It's a topic very important for the board, and I know with very strong commitment and engagement from our CEO, Bernard Looney. You really recall that we have a new purpose as of 2020. I mean, that means reimagining energy for people and the planet. This goes directly into that. Bernard, you wanna say a few words?
Yeah. Mr. Rafiq, thank you for the question and as Helge says, I think our purpose speaks very much to the points that you are making. I very much understand the question, and I understand the question about audit, and I won't comment on that now. What I can tell you is that the purpose of the company is very much, as Helge said, about reimagining energy for people and the planet. We're doing a lot of work today, here in the UK.
We have legislation around modern slavery, for example, and the board spends time in understanding the modern slavery issues that we have around the world. You might wonder, why is BP talking about something like that? The reality is that today, in many parts of the world and in many industries around the world, people sometimes have to pay a lot of money to simply get a job, and then they're sort of indebted to the person that they, that gave them that job. They're sometimes at work in foreign countries and don't have access to their own passports.
Sometimes they're at work where they have a contract that's not in their own language. And this is pervasive about through many industries in many parts of the world, and we're working incredibly hard to make sure that we identify any situations where those things might happen inside our own company and take corrective action when we find it. And you don't sometimes have to go very far abroad to find it. So we understand the question.
We, of course, are very focused on this issue today, and as I said earlier, Mr. Rafiq, we have a human rights policy, that sets out our commitment to respecting, internationally recognized human rights. We are focused very clearly, and our people are focused on assessing and addressing human rights risks within our projects and our operations. Hopefully that gives you a little sense of what we're doing on an ongoing basis.
We have board and committee meetings this week just to take you into the operating practices of the company. In the Safety and Sustainability Committee two days ago, this was one of the topics on the agenda. Of course, this is an evolving area. We have to learn. We have to develop our practices. I think the ambition and the direction is very, very clear. Thank you for the question.
Thank you, Helge. Thank you, Bernard, as well. We have 1 question in the adjacent room. I think, if you agree, Helge, we've had well over an hour of questions now. It'll be time to sort of come to the last few questions that we have registered before closing the meeting, closing the polls.
Yeah.
If that's okay with you, we'll take this question from Mr. Collins. Mr. Anthony Collins. Hopefully, you can hear us clearly in the adjacent room. Good. Thumbs up. Thank you. Away you go.
Hi. Thanks for having me. I'm here today on behalf of traditional custodians who live close to the North West Shelf processing facility in Western Australia, the Karratha Gas Plant. BP's involvement in the North West Shelf joint venture partnership resulted in the bulldozing of sacred rock art there in the 1970s and 1980s. Sulfur and nitrogen oxide pollution from the North West Shelf has continued to destroy the 1 million or so pieces of sacred rock art in the area ever since, and it is predicted that the 50,000-year-old rock art could be lost within our lifetimes.
This will only get worse if the huge Browse Basin is opened, of which BP is also a joint venture partner. These facts are about the destruction of cultural heritage are denied by the operators Woodside. My questions in regards to this are before any final investment decision on Browse is made, I have been asked to invite the board to meet with traditional custodians on Murujuga, the traditional country around that area, look them in the eye and tell them directly whether you will prioritize their cultural heritage.
The short-term profits of the expensive and very dirty Browse Basin. While I'm on Browse as well, I'd just like to get a bit of a sense as to what your thinking is going forward on an FID for Browse. Going back to a point that you made in the last section around the need around emissions reductions most heavily on oil and gas companies post-2030. Surely that means that Browse is completely out of the question.
Mr. Collins, thank you. Thank you for the question. If that's okay, I'll go direct to Bernard to take that if that's okay.
Mr. Collins, thank you for your question, and welcome. I'm not aware of the issue that you described in the 1970s and so on, but obviously, as a company, as I've said earlier, respecting local people, that involves respecting them as individuals. That involves respecting their property, and that involves respecting their cultural heritages, is a big part of who we are.
We will absolutely take you up on the offer of listening to the concerns that you have described. We engage with people from all walks of life with all challenges, it makes us better. Someone from BP, either our local leader or leader in the region, we will follow up on your request, and we will make sure that we engage and listen.
As regards to Browse, I understand how you characterize it. I would, however, characterize it a little bit differently, and that is that the Browse gas field, which is a large gas field for those of you who don't know, in Australia, it's offshore. Australia, as we know, is very close to Asia. One of the ways that Paris will be met, the Paris goals will be met is one of the ways will be by helping Asia stop burning coal and move to natural gas.
That is a part of the solution. Therefore, that gas could be an incredibly valuable commodity, not just in a financial sense, but importantly, in a climate sense, as it helps the world get off of coal and onto a lower emissions fuel, which natural gas is.
Very much appreciate the concern around that. We are looking at Browse. There will likely be many forms of carbon capture and storage associated with Browse to minimize its impact. Browse could be a real help to Asia to get off of coal and to lower its emissions. I won't say any more on Browse beyond that. Thank you, Mr. Collins, for your questions. I appreciate it.
Just if I may. Thank you, Mr. Collins. Appreciate your question. Bernard, thank you for that response. We'll turn now to questions we've received from a number of shareholders in relation to pensions. What I'll do is I'll just combine the questions that we've had here, but essentially the question is, why has the board not agreed to an increase of greater than 5%?
And a further question on why it is that BP's pensioners are being given an effective real value income cut at the same time as the company is making windfall profits. Linked to that was. In fact, no, just that's all of the questions that we have as one on pensions. So I don't know whether, Helge, you want to kind of take it through?
Yeah. Thank you, Ben. Just a reminder that this is actually not a matter for the board itself. The Trustee Board of the primary U.K. pension fund submitted a request to the BP management team to apply for an above-inflationary discretionary increase above the 5% RPA cap. Bernard, maybe you should address it.
Is there a question in the room on this subject, Ben, as well? Ben?
I can see there's one question in the room. Thank you very much, Bernard.
Maybe it's.
Should we pick that up at the same time?
Yeah, maybe take that first, Ben.
If that's okay.
Yep.
Please. Just, if you could tell us your name and your share as a shareholder.
Hello, Ben. My name is Phil Clark. I'm a shareholder. I also worked for the company for decades. I'm now a BP pensioner. The context of my question is the BP website. Looking at the page on our beliefs and code of conduct, one of these beliefs is care for others. It says, "Put yourself in other people's shoes, especially our partners, suppliers, and customers. Ask how we can help them." The BP pension is fundamentally a good scheme, as we've heard.
Pensions rise with inflation every single year, although when inflation is high, BP's approval has to be sought for increases over 5%. I came to this meeting last year because inflation was 7.5%. BP had refused to allow an increase above 5%. The consequence of this was that BP pensioners suffered a permanent and irreversible reduction in their retirement income of 2.5%. This came as an immense surprise to the pensioner community, as in the past when inflation was high, BP had always supported its pensioners.
Be clear, what I mean by that is pensions increased by inflation and never, and can't increase in real terms. I'm here again this year because inflation at the reference date for this year's increase was 13.4%. The pension trustees recognized the impact of the cost of living and requested BP to allow an increase above 5%. BP has refused this request. This is despite the fact that the pension scheme has a significant surplus and could afford to pay a lot more, and BP is currently, of course, making so much cash, it doesn't know what to do with it, and could easily top up any fund if necessary.
The consequence of this is that BP pensioners in the UK will suffer a real reduction in their pensions of 8.4%, which with the previous year's real reduction now means that over 2 years BP has slashed pensioners' retirement income by 11%. This is galling, as BP used to take care of its pensioners, but this board seems intent on making retirement a misery for its most vulnerable stakeholders. BP did issue a statement to explain its refusal.
It explained that the pension arrangements around the world for its global pensioners varied and some schemes did not allow for discretionary increases. BP did not see how it could give UK pensioners a discretionary increase if it couldn't give similar increases elsewhere. Really? That's clearly not true, because historically, in the past, BP has always given the discretionary increases. Last year was the first time it didn't do it.
Furthermore, is BP now saying that it's refusing to look after its pensioners as it considers itself bound to give the worst increases possible in accordance with the terms of the worst scheme anywhere in the world? I'm left wondering why BP has set up poor pension schemes and why it is not finding ways of looking after its most vulnerable stakeholders instead of hiding behind excuses of mock fairness.
Mr. Clark.
No, I'm nearly, I've nearly finished. I'm nearly finished, Ben.
Yeah. Can I come to the question?
I'm nearly finished, Ben.
Good. Thank you.
The company in the past always looked to level up and is now looking to level down. BP's statement got worse, and it went further. The company recognized its policy would cause some pensioners to fall into hardship and suggested that any such apply to the benevolent fund for assistance. Really, is that what BP wants to communicate, that its pensioners must rely on charities to survive whilst BP makes record profits?
Its CEO and CFO are paid $10 million and $5 million, respectively, which were both increases in excess of 100% over the prior year. Truth be told, though, any pensioners are unlikely to go to the admin of applying to the benevolent fund for help, and they're more likely to end up going to the local food banks. Is that what BP wants?
Mr. Clark, I think we do have to stick to your question.
Nearly got there, Ben, promise. It's pensioners to rely on the food banks while still making these extraordinary profits. Is this caring for others? I have 2 questions were there, and they're actually for Paula, if you don't mind. First of all, as your role as Senior Independent Director, do the non-executive directors support the executives in their decision to slash pensions of the company's most vulnerable stakeholders, despite the vast profits being made?
Do the non-execs support that? Secondly, as Chair of the RemCo, and it's lovely you're here because you fill all these seats, I couldn't establish from the report in the annual report and accounts whether executive directors are rewarded for reducing costs by slashing pensions or penalized for a substantive deviation from BP's stated values of caring for others. Can you, Are they better off slashing our pensions or?
Okay.
-or supporting us?
I think-
I've actually got a request of.
Okay.
-of the chairman, please. Mr. Chairman, can you please intervene in the name of BP values and protect BP's most vulnerable stakeholders from the actions of the executive directors?
Mr. Clark, thank you. You've made your points well. I think the first of those questions, Helge, probably you've answered already. Did you want, in the first case, just want to come back to that, and maybe Paula might comment?
I think basically we have clarified the accountabilities around this. I suggest, Bernard, that perhaps you wanna go a little bit deeper into the thinking and the background and how you have thought about it.
Phil, good to see you, thank you for putting the case forward. Having spent almost 32 years at the company, as you might imagine, I have many friends and ex-colleagues here in the U.K. who are pensioners, and therefore, this is not the first time that I have had this question. I have received many emails which we responded to around this.
I think you, however, have articulated it very, very well. I wanna start, Phil, by saying that, you know, I and Murray and the team are incredibly grateful for what you and your pension colleagues have done for BP. We stand on the shoulders of the work that you have done for BP over decades, and we never take that for granted.
We know, obviously, as I say, from the conversations that I've had with... pensioners and the conversations that all of you have with your family, friends, and some of your pensioners, that it's a very difficult time for people, right across the U.K., and pensioners are no exception. As a result, the decision of management, and it is the decision of management and ultimately myself, was not an easy one. I take no comfort, Phil, in responding to you in the way that I'm responding to you, but it is what I have to do.
We have to recognize our responsibility to all of our stakeholders, shareholders, customers, and current and former employees all around the world. We considered this issue carefully, as I would expect you would want us to.
Yes, we decided not to support the request. We decided to award a 5% increase as per the policy, and to not grant an increase in that 5%. We took many things, Phil, into account to do that, including, as you say, the knock-on impact for BP employees from other BP schemes all around the world. We simply cannot take a decision on discretionary increases for U.K. pensioners on their own. We simply can't do that. We have to take it in context. I understand that you will disagree, or you will likely disagree, and I respect that view. I genuinely do. I respect the fact that you will be disappointed by that.
I appreciate the fact that you have learned about what we are trying to instill inside our company around care for others, and I can assure you that is what we are trying to do. My first responsibility is to our company, and I believe that is how I can best serve the pension scheme. We can chat afterwards if you wish to.
Thank you. Scott, thank you for the question. Sorry.
From Paula, if the non-execs are happy with that.
What?
Let me just say this, which is, you know, I think we fully understand the points you've made. As Helge Lund mentions, the board is not the one that actually makes the decisions with respect to any of the pension schemes. It kind of falls in the category of what I talked about at the outset. You couldn't possibly expect that that would be the responsibility of the board to be looking at individual pension schemes.
I would say this, is we are aware of the decision that the company made. We support the management's set of considerations in it, that they came to with great seriousness. I think we also recognize at a broader level that the challenge around pension schemes is it's many generations. It's not just around the world, but it's many generations.
The reason that the fund is there for pensioners to go to is it recognizes that the challenge of pension scheme inflation rates falls differentially on the entire population. Our care for others includes the fact that the company has sponsored a scheme where people can make application. We think that structurally that is one of the great benefits of the way that we think about trying to fairly administer. We support the management and all the considerations that Bernard and the team went through before coming to the decision.
Just to clarify that one point, if you don't mind, and I'll go away. If you look at the website for the benevolent fund, it does actually say the fund is there to solve specific short-term issues. It is not there to help with the long-term costs such as everyday living expenses. It won't help. If you look at the accounts for 2021 for the benevolent fund, as I have, the total amount granted is only GBP 45,000, and that's the combination of loans and grants. It actually wants the money back at the end of the day. The benevolent fund is a weak thing. You are sending pensioners to the food banks, I'm afraid.
If there are any employees left here, it would be useful if you could take these thoughts, go back to the office, discuss with your colleagues, because now you know how BP approaches its pensioners. We need to shine a bit of light of publicity on this. Mr. Looney, I do respect you. A lot of time for you. I've been engaged in an extraordinary amount of email correspondence about this issue, and there's a lot of very angry pensioners. Next year you might get a lot of very shouty people with zimmer frames coming along to the meeting. I look forward to that.
Let me just respond to your direct question to me. Of course we understand the background and the concerns that you and your colleagues have. As you may imagine, as a Chair, I stay in constant contact with Marianne and Bernard, and I know-
How deeply they have been into this question and other complex issues. It's not an easy decision, they have made a decision also based on the values of the company. I have no intention of intervening in three years period. The Remuneration Committee led by Paula also applied its own discussion, which led to an overall reduction in pay outcomes, as you have seen from the report. We, the Board and the Remuneration Committee, indeed believe those outcomes fairly reflect the complexity of running a global enterprise like BP during a very challenging period.
The Board is fully supportive of the governance process surrounding remuneration decisions, and it has been an extraordinary, deep set of meetings, engaging widely outside the company as well. Therefore, we endorse and support the work of the Remuneration Committee. Perhaps, Paula, you wanna add a few specifics?
I think there's a series of questions that broadly go to the question of why do we pay what we pay in light of the environment around us? Then there's even a question about why do we pay what we pay when you consider issues like pension and dividends in the background. As I described in my opening remarks, we have a very specific mandate at the Remuneration Committee, and it's to file a policy, have shareholders approve that policy, and then administer the programs under the policy.
While we end up reporting very prominently in the Directors' Remuneration Report, how we pay executive directors, the framework that the policy addresses also basically speaks to our entire workforce. We effectively, when we adopt a program, a policy, when shareholders approve a policy and then we administer a policy, we are effectively saying to the entirety of the workforce, "This is the basis on which you're gonna be paid over the next 3 years." It's highly weighted.
The higher up you go, the more highly weighted it is to performance. For example, at the very front line, it's much more of a salary structure. The higher up you go, much more of the total pay that's delivered comes through the form of stock or bonuses. Everybody's in the same scheme. We have everybody, as I said, rowing in the same direction because every employee is a shareholder.
What we ended up over this three-year period to keep in mind, and I thought the video at the front end was really quite good of saying what happened in year one, year two, year three, is by year three, having been through a pandemic, having been through a major geopolitical disruption, and having lost a substantial amount of our oil and gas reserves and supplies, is the company had a record year.
That record year at the end was tempered by the fact that the share price didn't improve all the way through. It improved at the end. Today, of course, BP shareholders, all of us are enjoying the benefit of the successful three years, notwithstanding the complexity that we went through.
The bottom line is this, is that based on the performance goals that we set in 2020, and the performance that was turned in by everybody in the company, the plans have paid out at the levels that are generally consistent with the formulas. As I also said at the beginning, we had some issues at the Rem Co to consider with respect to the very top leadership, and that is: What is leadership's responsibility for the safe environment and how we might adjust there?
What is the some of the mechanics around the fact that our share price had a lot of volatility in it, and so should we make some adjustments to the ultimate size of the vesting? We made some downward adjustments to the executive directors. By and large, it was a formula. We've had a great outcome over the 3 years. The formula has worked to deliver significant value for all of us. We conferred with many, many shareholders through this period.
As I said at the beginning, we convened for 5 months to talk about how we were going to ultimately administer the plan. Talked to many, many shareholders, and the whole idea is if we benefit, we benefit together. If we don't perform, then we don't benefit. In fact, of course, this has been a remarkable, remarkably complex 3 years with a tremendous outcome, and deserves to be rewarded to our leaders who have been steadfast through this incredible period of time.
Paula, thank you. We have 1 other question on remuneration that have been submitted online from 1 of our shareholders, Philip Mack. 2 parts to it. What was the basis for the reduction of the- Annual cash bonus outcome for 2022 by 5 basis points on account of the fatalities in the year. The second question was, why did the committee not separate Tier 1 and Tier 2 scores in the 2022 scorecard, given that Tier 1 events are more significant than Tier 2? Paula, is that something you wish to pick up directly?
Sure. For those of you who really go into the details, this is a very thoughtful question, but it does go into the details, so forgive me for those of you who don't follow this that closely. Our process in coming to a decision about how we score the scorecards is we go to other committees of the board for input. In the case of safety, we go to the Safety and Sustainability Committee chaired by Melody Meyer, who's on the screen.
We ask them to go through the specific facts of each particular case of severity, as well as verify the total scores. We talked extensively about the circumstances with respect to the fatalities with the committee. The committee concluded that there was nothing systematic about these fatalities in terms of our practices. There was nothing that was that showed any kind of tone at the top issues. In fact, in these tragedies, there are human factors, but it wasn't anything within our policies, procedures, or operating framework that we could say that there was an inherent flaw.
These are tragic events, but we felt that we had to moderate any kind of recognition of those in light of the facts that the facts of these cases did not implicate the leadership or the risk management practices or the safety practices of the company. The adjustment we made, we think was appropriate to the facts of the case. There's a question about how we measure Tier 1 versus 2, Tier 2 scoring. In that scorecard for that year, those were combined. In the 2023 scorecard, and in the future, those will be separated back into separate measures.
Paula, thank you very much. I don't see any other questions on remuneration in the room or on the line. I think what we will do then is just move, Helge, if it is okay, to the next question, which had been pre-submitted, which was a governance question querying the size of the board and the number of internal, that is to say, executive versus external, by which they mean non-executive appointments.
Yeah. Yeah. Thank you, Ben, and thank you for the question. The UK Corporate Governance Code states that the board should include an appropriate combination of executive and non-executive directors. The code even goes as far as saying on this topic that at least half of the board, excluding the chair, should be independent non-executive directors.
And we believe that we are honoring the principles of the code to ensure that no one individual or small group of individuals dominates the board's decision-making and discussions. And similarly, it has been determined that this is the optimum setup for the board to fulfill its oversight responsibilities, and it's a, I think, a quite common approach when benchmarked against the other large FTSE-listed peers.
Of course, the executive team are factored into board succession planning as appropriate, as overseen by the People and Governance Committee. Of course, an example of that was the CEO change we did a few years back. Bernard came in, and subsequently Murray came in as executive directors of the board as well, and basically following the same principle that we had also previously. That's the background for the composition of the board.
Thank you, Helge, and thank you for that question. I don't believe we have any other questions that have been registered that we can't answer outside of this meeting specifically and directly. I don't see any hands raised in the room or on the line. Helge, back to you to conclude the meeting. Thank you.
Yes. Thank you, Ben, and thank you for, to all of you. It, as Ben says, it looks as we have not received any new questions of substance on the issues relevant to the business of the meeting, and the poll is therefore now closed. The final results of the poll will be published via a regulatory announcement and displayed on our website soon after our meeting.
If you have voted via paper poll cards, please hand these to the members of our registrars team, or place the poll box as you leave the meeting. While paper poll cards are, of course, yet to be counted, we are able to show the provisional poll results on the screen right now.
As you can see, the great majority of our shareholders voted to support the board's recommendations. At the same time, and I want to underline that, we recognize that a range of views has been expressed. I can assure you that we will continue to listen to those views. Meanwhile, we will maintain our focus on delivering BP's strategy, net zero ambition, and also the aims.
As we conclude our meeting, I would like to express my gratitude to 3 groups of people who made it possible. First, I thank the BP team which has delivered this hybrid AGM. I can assure you it has been no small task, so thank you. Second, I thank my fellow board members. The AGM is rightly the moment each year when the way the company's run attracts the closest scrutiny.
Yet behind the scenes, I think you know that the board is meeting, corresponding, and debating basically the whole year through. I wanted to thank board members for their diligence and their commitment to BP. Third, and finally, I would like once more to thank our shareholders for your continued support of our company. That support makes everything else possible, so, thank you. This concludes the 2023 BP p.l.c. AGM. Please safe, stay safe, and thank you and goodbye. Thank you for coming.