After paying more than $65 billion in legal costs for the Deepwater Horizon catastrophe, BP Plc is wary of the risk of lawsuits related to climate change.
Chief Executive Officer Bob Dudley raised the topic of class-action lawsuits twice during the company’s annual general meeting in Manchester, England on Monday, saying he wouldn’t disclose certain climate targets, or even answer some questions from activist investors, because the risk of legal action in the U.S. was too high.
The sharp exchange between BP and two advocacy groups -- Amnesty International and the Union for Concerned Scientists -- shows the growing pressure on major oil companies to acknowledge their responsibility for emissions of greenhouse gases. It also reflects the burgeoning efforts to hold them legally responsible for the potentially disastrous consequences of rising global temperatures.
More from Bloomberg.com: Tesla’s $35,000 Model 3 Could Now Cost You $78,000
“You want to get us to make statements here in front of you that you can document that will lead to a class action,” Dudley said in response to one question from the Union of Concerned Scientists about pending U.S. litigation against energy companies. Such legal actions are “a business model in the United States,” he said.
In response to another questioner who suggested that selling oil and gas should be considered a violation of human rights, Dudley warned shareholders this could be another attempt to mire BP in a class-action suit. An open letter from shareholders including Aviva Plc last week urging more transparency could also end up providing lawsuit fodder, he said.
More from Bloomberg.com: China Considers Ending Birth Limits as Soon as This Year
“BP absolutely believes in being transparent. Transparency is beneficial to all,” Dudley said. “But we don’t want climate disclosures to be a tool for class-action lawyers.”
BP is still working through some of the 390,000 legal claims that resulted from the 2010 Deepwater Horizon catastrophe , which killed 11 people and spilled millions of gallons of crude into the Gulf of Mexico. The company had to sell off about a third of its assets to pay the various legal costs associated with the disaster.
In part, the payments were so steep because of a class-action suit, which offered a broad definition of which members of the Gulf Coast community were entitled to payments. BP will spend about $1 billion a year on civil settlements related to the spill until 2033.
More from Bloomberg.com: How to Turn Your Mom’s Savings Into $1 Billion? Ask This Guy
Cities and states in the U.S. are also seeking payouts from oil companies for the consequences of climate change, possibly using the funds to build seawalls or other infrastructure, said BP Chairman Carl-Henric Svanberg.
In litigation, all public statements are heavily scrutinized. Exxon Mobil Corp. is facing a multi-state fraud investigation into the company’s public comments about climate change after facing accusations it misled shareholders into thinking global warming was not a major risk. Exxon has called the probe a political vendetta.
Svanberg and Dudley both argued that, unlike the Deepwater Horizon incident, BP wouldn’t accept sole responsibility, legal or otherwise, for climate change. They said the company has always been forthcoming that greenhouse gases are a risk to humanity, and the energy it provides is an important part of the world economy.
“Climate change is a global issue,” said Dudley. “It is not the oil companies’, and gas companies’ and coal companies’ human rights issue.”
More from Bloomberg.com
- Stocks Rise on Relaxing Trade Tensions With China: Markets Wrap
- Maduro Wins Venezuelan Election, Risking Harsh Oil Sanctions
- Corporate Bonds Sink Fast in One of Worst Tumbles Since 2000
Read BP Sees Legal Jeopardy in Activists' Push for Climate Action on bloomberg.com