London (CNN Business)BP, facing growing pressure over the climate crisis, has pledged to reach net zero emissions by 2050 or sooner, as part of a plan by the company’s new chief executive to transform the legacy oil giant.
“The world’s carbon budget is finite and running out fast,” said CEO Bernard Looney, who stepped into BP’s top job this month, in a statement Wednesday. “We need a rapid transition to net zero. We all want energy that is reliable and affordable, but that is no longer enough.”
He followed up with a post on Instagram: “Simply put, we have got to change. We want to change. And we will change.”
The company pledged to cut greenhouse gas emissions from its global operations, as well as emissions that result from the oil and gas it produces, to net zero by 2050. By that same date, BP aims to halve the carbon intensity of the products it sells.
Details about how BP (BP) will reach these goals remain scant. Looney said that the company would provide further details on its plans at a presentation in September.
Still, the commitments are the most ambitious from any major oil company to date. Shell (RDSA) has set targets to rein in emissions from its products, but doesn’t go as far, while America’s Chevron (CVX) and ExxonMobil (XOM) lag far behind.
“They really are setting a new standard for what leadership looks like in the industry,” said Andrew Logan, senior director of oil and gas at Ceres, a nonprofit that lobbies for companies to take action on climate change.
BP will also overhaul its corporate structure in order to pursue its new strategy. Logan said this shows the company is serious about reaching its targets.
In a note to clients, Barclays analysts called the changes under Looney “fundamental and radical.”
“For us, the statement represents a steep change in terms of vision for the company, and one that moves the group towards the biggest reorganization and modernization in at least two decades, if not a century,” they wrote. “The magnitude and radical nature of this shift should not be underestimated.”
The announcement comes as investors and activists are calling for oil and gas companies to get in line with the commitments made in the Paris climate agreement, which aims to limit global warming to below 2 degrees Celsius.
Climate Action 100+, a group of investors leading the push who collectively manage more than $39 trillion in assets, applauded BP’s decision.
“This is a very welcome announcement from BP’s new CEO,” said Stephanie Pfeifer, a member of the group’s steering committee and CEO of the Institutional Investors Group on Climate Change. “We need to see a wholesale shift to a net zero economy by 2050. This must include oil and gas companies if we are to have any chance of successfully tackling the climate crisis.”
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