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BP announced a turnaround from its previous renewable energy pledges on Wednesday - and this time, there was no need to yell.
What does this mean?
In a stunning twist that no one could've predicted, Big Oil shareholders decided money must come first. So, determined to drill up more of the slippery sludge, BP said it'll increase its annual oil and gas spending by 20% to $10 billion in the next couple of years. That should put it on track to produce 2.5 million barrels of oil a day by 2030. And all BP had to sacrifice was, well, Mother Nature. To fund the moneymaking plot, the oil giant will slash its annual renewable energy spending by 70% to around $1.5 billion, as well as sell off a bunch of business segments to raise $20 billion and trim its share buyback program.
Elliott Investment Management is one of the shareholders whispering in BP's ear. That's on brand: activist investors like Elliott buy up big stakes in companies and use that sway to influence strategic decisions, with the aim of making shareholders more money. So assuming BP's switch up proves lucrative, Elliott may take part of the credit. But that claim could be contended: governments and companies have recently shifted to favoring fossil fuel production over green initiatives, so BP might've dumped the do-gooding soon anyway.
For markets: They do say change comes from the bottom up.
BP's pivot probably won't scare off institutional investors - even those that care about the earth beneath our feet. See, they tend to push for change from within rather than ditching a company outright. And in fairness, BP's green-minded budget is still in the billions. But retail investors are more judgmental: 42% said they'd avoid a profitable opportunity if it didn't align with their values.