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BP CEO says net zero plan 'not charity'

BP CEO Bernard Looney
BP CEO Bernard Looney. Photo: Daniel Leal-Olivas/AFP via Getty Images

Shifting BP (BP.L) from an oil giant to a green energy player is not just a moral imperative — it’s good business too.

BP chief executive Bernard Looney has said his plans to shift the company away from fossil fuels and towards renewable energy is in the long-term interests of shareholders.

“This isn’t charity, this isn’t altruism — it has to be grounded in economic reality,” he told the Confederation of British Industry (CBI)’s annual conference on Tuesday.

“Hopefully over time... people will see that this strategy is not alone the right thing for the world, but importantly its the right thing for long-term shareholder value.”

READ MORE: BP stocks rise as it beats expectations and swings back into profit

In February, Looney announced his intentions to transform BP into a net zero carbon company by 2050. It marked one of the most ambitious climate pledges in the industry and possibly the most radical change in BP’s history.

“The reality is, on having listened a lot to people, I came away with the inescapable conclusion that we needed to change,” Looney said on Tuesday.

He said BP was changing from an international oil company into a integrated energy company that would provide clients with solar, wind, and biofuel energy — a major shift for a company called British Petroleum.

“This is a big change,” Looney said. “People undoubtedly have questions about it.”

READ MORE: New BP CEO pledges to make oil giant carbon neutral by 2050

Looney said the transformation would be a gradual one and said oil and gas would remain a part of the company for “decades” but in a more “focused” way.

BP’s share price has fallen to a 25-year low but Looney said the fall was more down to “structural issues,” denying it was a reflection of his strategy.

Oil prices have dived this year, after the COVID-19 pandemic led to plummeting demand for fuel. BP was forced to write-down the value of its business by billions of dollars earlier this year and is in the process of axing 10,000 jobs around the world.

WATCH: BP beats estimates but warns recovery uncertain