Is it Beyond Petroleum for real this time?

Change is afoot in the global oil and gas industry. BP's surprise decision today to back a shareholder resolution requiring it to describe how the company's strategy is consistent with Paris goals is just the latest in a string of moves suggesting some of the world's leading fossil fuel companies are starting to properly engage with the global low carbon transition.

The oil giant's support for a sweeping overhaul of its reporting policies and plan to reform its bonus structure to reward staff for meeting carbon targets comes in the same week as rival Shell snapped up another electric vehicle (EV) charging specialist in the US. It also follows BP's investment in solar specialist Lightsource and its acquisition of EV charging outfit Chargemaster, as well as Shell's similar emission-linked bonus scheme, not to mention its purchases of EV network NewMotion and energy supplier First Utility, and its investment in energy storage innovator Sonnen. Across the Channel, Total is making similar multi-million dollar bets in renewables and storage, while globally a growing coalition of oil and gas majors have pledged to invest $100m each in emission reduction technologies.

The big question is whether this represents a tipping point in the oil and gas industries' engagement with climate risks, the carbon bubble, and the rapidly accelerating clean tech transition... Or whether it amounts to another cynical gambit from the industry, an exercise in greenwash designed to distract campaigners and investors while fossil fuel exploration continues unimpeded?

Greenpeace is unequivocal with its answer to this critical question. "Whether deluded or disingenuous, BP's management clearly isn't up to the task of navigating the transition to a low carbon economy," said Charlie Kronick, oil campaigner for Greenpeace UK. "BP claiming its business plan is in line with the Paris targets, while still planning to drill for new oil the world can't afford to burn in an area of huge ecological significance like the mouth of the Amazon, is simply ridiculous. If climate change wasn't actually a matter of life and death, this claim would be comical."

On the other hand Bruce Duguid, head of stewardship and lead co-ordinator of the resolution at investment giant Hermes EOS, is convinced today's news represents a significant breakthrough. "Having a strategy and investment consistent with the Paris Goals is critical to securing a sustainable future," he said. "This is good news for both investors and the planet."

Who is right? The answer is arguably both of them, depending on how you define "consistent".

Greenpeace is right to fear BP will use an extremely capacious definition of the term, allowing it to continue to explore for and exploit new oil and gas reserves. Straight out the blocks this morning, BP CEO Bob Dudley killed dead any suggestion the announcement amounted to the kind of orderly "wind down" strategy Carbon Tracker has recommended oil majors consider and enact. "Meeting the world's growing demands for energy while also greatly reducing emissions will require more than rapidly growing renewables - all forms of energy must be made cleaner, better and kinder to the planet," Dudley declared. The dog whistle support for continued fossil fuel development cuts through loud and clear.

The fact is the Paris Agreement's necessarily vague target of keeping temperature increases 'well below' 2C leaves plenty of room for debate over the size of the available global carbon budget and how it should be divided. Every oil major, even those nominally committed to complying with the accord, will argue that their share of the available budget (coupled perhaps with some negative emissions technologies) is both sizeable and economically sensible to exploit. Only when you add up all those individual projections, as BP itself does with its various Outlook reports, do you find the total budget has been vastly exceeded and the world is on track to crash through 2C of warming in a few decades time.

And yet, it still seems harsh to dismiss out of hand BP's promise to publish a Paris Agreement consistent strategy. The strategy will be public and if the explanation detailing precisely how it is consistent with a 2C goal is not compelling, increasingly vocal investors will respond. Of course, a lot rests on how those investors respond and how far they are willing to push any protests if they don't think the strategy is up to scratch.

Equally, the big test of BP and the wider industry remains their willingness to one day say 'that project is cancelled, because we think it is neither responsible nor economic in a decarbonising, Paris Agreement consistent world'. We are arguably still a long way from that point, but BP has just handed the investors and campaigners who want to accelerate the decarbonisation a huge stick with which to beat it. The company will have to constantly and publicly justify its position in the low carbon transition - there is no hiding place.

Moreover, this transparency will only intensify the pressure on BP, and its peers willing to engage with the Paris goals, to continuously strengthen their clean tech hedging position. Those who criticise these companies for investing only a fraction of their capital expenditure in alternative sources of energy make a fair and valid point. But at the same time that marginal investment has already made BP a major shareholder in Europe's largest solar developer and the owner of the UK's largest EV network. Shell similarly operates Europe's largest EV network, sells clean power through First Utility, and owns one of the world's most exciting energy storage firms. It may be disorientating for many green economy advocates, but the UK's most carbon intensive companies are also some of its largest clean tech firms.

In publicly committing to a Paris Agreement consistent strategy BP is inviting shareholders to demand it invests a lot more in clean technologies and steadily reduce its exposure to what will quickly come to be regarded as its legacy business. It also means the reputational hit it would take if it chose to go slow or reverse ferret on this transition would make the storm sparked by the decision to ditch 'Beyond Petroleum' look like a gentle zephyr.

Is it a case of 'Beyond Petroleum' for real this time? Not yet, but it is big step forward and further evidence that simply ignoring carbon bubble and climate fears is not a defensible strategy for the global fossil fuel industry.

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