In his first year at the helm, bp CEO Bernard Looney has had to contend with a pandemic and a historic plunge in oil prices. Yet his greatest challenge may lie ahead: leading the company through a decade that climate-change experts call “decisive” for the future habitability of the planet.
A week after becoming CEO of bp, Bernard Looney made a landmark announcement: The company would become a net-zero emitter by 2050 or sooner, and that it intends to help the world get there as well. That is a big deal for any company; for one of the world’s leading producers of oil, it was a remarkable commitment.
Within weeks of that announcement, COVID-19 swept across the world, causing a historic nosedive in demand for oil.
In April, less than three full months in his new role, the price of crude futures briefly went negative for the first time ever, and the International Energy Agency predicted that 2020 would be “the worst year in the history” of the oil industry.
Indeed, the industry has been dealing with the impact of a low oil price not only throughout this year but also its likely longer-term implications. Looney has had to deliver difficult business updates, including write-downs and layoffs. bp may have committed to carving out a net-zero future, but in the meanwhile the company still has to deliver competitive oil and gas in a fierce and volatile market.
Yet for the future, the defining issue for Looney, for bp, and for the industry, is climate change. Having set out his bold net-zero ambition in February, Looney followed up in August by fleshing out bp’s strategy to achieve it.
The company will cut oil and gas production 40 percent by 2030, and increase its low-carbon investments tenfold over that same time. It has halted hydrocarbon exploration in any new countries. Looney also announced that he is redirecting funds that would have gone to corporate advertising to advocate actively for policies that support net zero, including carbon pricing.
Mike Coffin, an oil and gas analyst for Carbon Tracker Initiative, a non-profit analyzing oil companies’ climate impacts, told Fortune after the strategy was released that “bp is now the industry leader in responding to climate change.”
Having announced this industry-leading strategy, Looney has orchestrated ambitious investments to bring it to life.
In September, bp entered the offshore wind power market with a $1.1 billion investment with Equinor—a move Reuters called “a significant step … towards its energy transition goals.”
In November, the company partnered with renewables giant Ørsted on an ambitious initiative to produce green hydrogen. A month later, bp acquired a majority stake in Finite Carbon, the largest developer of forest carbon offsets in the US.
Such bold commitments and investments have drawn praise—even from a nonprofit like Greenpeace—yet the pressures facing Looney and bp remain intense.