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I wouldn’t call it unprecedented or particularly shocking news (given how similar announcements piled up during the early months of the Trump administration), when BP announced earlier this year that it was retreating from carbon reduction efforts and shifting its focus back to core operations, meaning more gas and oil production. The company formerly known as British Petroleum (yes, the one with the green Sunshine logo for years) announced in February that it would cut more than 5 billion dollars from its budget allocated to low-carbon technologies, and that it no longer aims to uphold its 2020 climate pledge, nor to increase its renewable energy generation twentyfold, to 50 GW by 2030. To justify this reversal of the progressive sustainability strategy pursued since CEO Bernard Looney took office, the company stated that the energy transition scenario had been overly optimistic. Fortune, however, suspected that the real reason behind the decision was a process that, over the course of just a few years, had turned BP into a takeover target.
The answer came in early April: following Looney’s departure in 2023, Helge Lund, the board chair and another key supporter of the green transformation, also announced his resignation.
To help make sense of this, and more broadly, the internal dynamics behind major corporations backing away from climate commitments, a recent Bloomberg report offered a revealing perspective. Executives who were brought in to deliver on these green pledges spoke candidly about their growing disillusionment. Several stated that for companies, current (green) policy compliance has become far more important than genuine efforts to reduce their own pollution. In other words, what truly matters — what the company could do, with what tools and how — to reach sustainability targets better, faster and more effectively. "Any claim to environmental good faith should be measured by whether the company supports government regulations that require all market participants to go green," the article noted.
I consider this an important point of interpretation, because before anyone summarises what happened at BP as some kind of green karma or a victory for climate scepticism, that is not what is actually happening. The departing Norwegian executive had been the strongest internal supporter of Looney’s 2020 emissions reduction strategy. After his forced exit, however, the company began to distance itself from that path, citing financial pressures and growing demands from shareholders. This included walking back its previously announced target to reduce hydrocarbon production by 40 percent by 2030. The new CEO, Murray Auchincloss, who took over after Looney in 2023, shifted the focus back to oil and gas. The internal battle was decided. Auchincloss stayed. Lund did not.
There is something to unpack in the image of BP turning back toward the fossil fuel sector. A long interview in Fortune featured Auchincloss explaining how BP had ended up in this messy situation. One of the most telling statements in the conversation, to me, was that “BP thought too highly of itself, and it paid the price in terms of results and market position.” Auchincloss argued that shareholders want profits, dividends, and a company that performs financially. And in itself, that’s fair enough. If the company is strong and profitable, it can move more quickly toward sustainability — just as the leading players in the industry are doing.
However, sustainability is precisely the area BP now plans to scale back, arguing that it simply drains money and that refocusing on its core business will improve profitability and help avoid the rival sharks circling, drawn by the scent of blood. Auchincloss reframed the situation by stating that BP must remain strong in areas where it already has proven results and competitive advantages, and renewable energy does not fall into that category. The CEO’s defence was that they are not abandoning their commitment to the transition, but they must somehow finance their carbon transformation efforts. In his words, the capital raised for the green shift should not be spent on experimentation, but rather on productive structures that offer active solutions and “enable the building of continuous growth capacity”. One such initiative is their two carbon removal and sequestration projects, in Indonesia and the United Kingdom, where construction is already underway.
The logic behind the message may be coherent, but as a leader committed to sustainability, it is simply not acceptable — and the bigger question is whether it works at all in a world that has fundamentally changed: the green transition is inevitable, and those who sit it out will be left behind. On top of that, the optics are terrible, pushing the company even further down the spiral. Shell is already watching from the corner, waiting for the right moment and the right price point to put a full stop at the end of the BP story. Strong profitability and a clear sustainability strategy face off against weak returns and questionable environmental goals. The outcome of the battle seems almost inevitable. Rocco Papaleo just stumbles through the big city (Chicago), not quite understanding what is happening to him, or why.
This article was first published on the 15th of July, by Levente Tóth, CEO of mitigia, on their personal LinkedIn profile.
