Now BP and Shell will consider the cost of climate change when doing business

BP will support a shareholder resolution calling on the company to release information about how climate change could affect its business. It’s the second big win for climate-conscious investors this year: Shell agreed to support a similar resolution last week. Both the Shell and BP resolutions were submitted by a coalition of activist investor groups representing more than 150 major shareholders in Europe and America.

The resolution asked Shell and BP to reduce emissions, to invest in renewables, to provide transparency about bonuses that reward “climate-harming activities,” and to test how their business models would hold up if governments were to take action to limit global warming to 2 degrees Celsius. These steps are good business, the resolution argues, “given the recognised risks and opportunities associated with climate change.”

Analyses suggest that in order to stay below the 2 degree level, much of the fossil fuel in the ground will have to stay there — including all of the oil remaining in the Arctic, which both Shell and BP are hoping to tap. If governments take more stringent action to confront climate change, these resources could end up stranded, despite the high value oil companies place on them.

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