BP’s green strategy failure is drawing sharp criticism as Shell considers a potential acquisition amid mounting concerns about ESG credibility and corporate transparency.

From Net Zero Hero to Industry Joke: When Bernard Looney announced BP’s “net-zero by 2050” ambition in 2020, he positioned the company as a pioneer in the energy transition. Five years later, BP’s weakened valuation, operational disarray, and identity crisis have turned it into a case study of strategic miscalculation. Once a titan of the oil industry, BP now faces existential questions: Is it a leader in the transition, a legacy oil player, or a takeover target?

The Net-Zero Gamble: Vision vs. Realities

Looney’s 2020 pledge to slash oil production by 40% by 2030 and invest heavily in renewables marked a radical departure from BP’s hydrocarbon roots.

The plan included:

• A tenfold increase in low-carbon spending to $5 billion annually by 2030.
• A 50% reduction in the carbon intensity of products sold by 2050.
• Divestments of $25 billion in oil and gas assets by 2025.

While lauded by climate activists, the strategy alienated investors. BP’s dividend, halved in 2020, remained stagnant even as peers like ExxonMobil and Shell raised payouts. By 2023, BP’s total shareholder return lagged Exxon’s by 45% and Shell’s by 28%. Shareholders grew skeptical of Looney’s dual promise to “perform while transforming,” questioning whether BP could fund its transition without sacrificing profitability.

• Critical Misstep: BP’s aggressive production cuts coincided with the 2021–2023 oil price surge, during which Brent averaged $85/bbl. While Exxon and Shell capitalized on the opportunity, BP’s oil and gas output fell by 25%, costing it an estimated $12 billion in forgone cash flow.
• Governance Crisis: Leadership Turmoil and Cultural Fractures
• Looney’s abrupt resignation in 2023 amid governance controversies exacerbated internal instability. His successor, Murray Auchincloss, faced immediate challenges:
• Strategic Whiplash: Investors demanded clarity on whether BP would prioritize dividends or decarbonization. Auchincloss scaled back renewables spending to $3 billion annually and raised oil investments to $10 billion—a partial reversal of Looney’s vision.
• Cultural Divides: Employees reported confusion over BP’s identity. The 2020 restructuring, which replaced upstream and downstream divisions with integrated teams, created bureaucratic gridlock, slowing decision-making.
• Regulatory Scrutiny: The UK Financial Conduct Authority opened an inquiry into BP’s climate disclosures, citing inconsistencies between public pledges and operational realities.

Peer Comparisons: BP’s Lagging Position:

• ExxonMobil: Leveraged the Inflation Reduction Act to commit $30 billion to low-carbon projects while expanding production in the Permian and Guyana regions. Its Q1 2025 earnings surpassed those of BP.
• Shell: Maintained LNG dominance while investing in selective renewables. Its 2025 strategy focuses on cost-cutting, avoiding a crisis of identity similar to that of BP.
• TotalEnergies: Allocated 29% of capex to renewables, outperforming BP in both transition credibility and oil cash flow.

Green PR Doesn’t Equal Green Progress — Is Your Strategy Built to Last?

BP’s implosion is a cautionary tale for any corporation trying to greenwash its way to relevance. At Klean Industries, we don’t just talk about sustainability, we build circular infrastructure that delivers real climate impact and long-term financial return.

Whether you’re an oil major or a municipal waste operator, we design and deploy technologies that transform waste into wealth and expose the green mirages for what they are.

Talk to the Klean Team today to turn bold climate statements into measurable results that the market and the planet will trust » GO.