Dear fellow shareholder,
The year 2022 was challenging for societies, governments, and businesses – including for bp. My belief in effective, purpose-driven boards has been reinforced by the way in which bp met those challenges last year.
In our decision to exit Russia, the board was alert to our responsibilities towards the company’s owners and towards our wider stakeholders, including bp’s employees.
The thoroughness of the board’s review process– concluding within days of Russia’s attack on Ukraine – was enabled by two factors.
First, by robust governance, which required that a decision of this significance be reserved to the full board.
Second, by the trust that exists both among the board’s members, and between the board and the leadership team. Of course, the board’s decision had a material impact on bp, but the response from shareholders and employees was overwhelmingly positive – for which we are grateful. We remain convinced that the decision was the right one.
Since Russia’s attack on Ukraine, the importance of transforming the global energy system has been brought into sharp relief. The world wants and needs a system that is not only lower carbon, but secure and affordable too. The threefold nature of this demand is known as the energy trilemma, and in 2022 the board and leadership team spent a great deal of time focused on how bp’s strategy – designed to address all three elements of the trilemma – might further evolve.
Our consideration contributed to the strategic progress update announced in February 2023. That update reflects the growing confidence the board has in a strategy that is working well, with more investment both in our resilient oil and gas business and in what we call our transition growth engines – bioenergy, EV charging, convenience, hydrogen, and renewables & power.
Prior to this update, in December 2022, we announced important progress on our bioenergy transition growth engine with the acquisition of Archaea Energy, a leading US producer of renewable natural gas.
During 2022 we saw good strategic progress with the development of low carbon plans and opportunities in Abu Dhabi, Australia, Egypt, Mauritania, Oman, Spain, the UK, and the US.
Earlier in 2022, at our May annual general meeting, the board invited shareholders to express their support for bp’s journey to net zero, and we were pleased that the result delivered a clear mandate for continuing that journey – a mandate that I hope you agree we have put into action.
During 2022 the board was able to travel more– visiting bp operations and meeting employees, investors, and communities in person. In April, we visited bp’s offices in Aberdeen, and board members travelled offshore to bp’s Glen Lyon production vessel. In September, we visited Houston, building the board’s understanding of colleagues’ work to keep energy flowing and also spending time reviewing the vital work of bp’s security operations centre.
The board believes that better decision-making can be achieved when people with different backgrounds and perspectives come together with a common ambition. I am therefore pleased with the continued progress that bp has made on diversity, equity & inclusion (DE&I), including at the level of the board.
Our board currently meets the new UK listing targets regarding the representation of women and ethnic minorities; however, there is more to do. With this in mind, the board’s updated DE&I policy reflects the concrete actions we are taking to make bp a more diverse and inclusive place to work, setting as an example the diversity of our board.
As I have already said, I am pleased with the productive working relationship that exists between the board and the leadership team. We have found that the high degree of trust between them allows for greater constructive challenge, rigour, and scrutiny. It has also made our decision-making processes swifter, allowing us to be more responsive to changing circumstances.
We seek continuously to improve the board’s performance. After an external evaluation in 2021, we implemented changes in 2022 to further improve board processes and how we work, investing more time in understanding the opportunities presented through our five transition growth engines, such as the Archaea acquisition, while maintaining a strong focus on capital discipline and shareholder returns.
We have also taken steps to enhance capability by building a board that reflects the markets, customers, and communities bp serves and the strategic direction we have set for the company.
In 2022 it was a privilege to welcome Amanda Blanc to the board. She brings wide-ranging board experience and industry and regulatory expertise.
Most recently, we welcomed Satish Pai and Hina Nagarajan, who both joined the board on 1 March 2023. Satish has broad experience in operations and technology in energy as well as in industries that complement bp’s activities. Hina has a proven record in transforming businesses in complex emerging markets, and she brings deep experience in customer-focused businesses – an area of increasing strategic importance for bp.
Our work to build the board and to optimize its composition continues.
It would be impossible to thank everyone who contributed to bp’s progress in 2022, but I do want to thank four groups in particular.
First, bp’s shareholders. I am grateful to you for placing your faith in bp during 2022, and for the engagement we have had with you. The board will work to retain and repay that faith.
Second, my fellow directors. They have created a boardroom that I believe to be open, trusting, and supportive – in which all perspectives can be shared and considered. I am convinced that our decisions benefit from this open atmosphere.
Third, Bernard and his team, for their leadership and for all they have achieved so far. They have proven to be determined in delivering bp’s strategy, but also perceptive of the world’s evolving energy needs – and able to adjust as necessary.
Above all, praise goes to the almost 68,000 bp employees who make bp the company it is. The strong results of the engagement survey among bp employees in 2022 indicate the pride they feel in bp. In return, I speak on behalf of the entire board in saying how immensely proud we are of them.
Information about our Annual General Meeting including the Notice of Meeting and speeches made by members of the board
An overview of the key activities, events and results together with commentary on bp’s performance and our priorities as we move forward