The Great Green Undoing: Why BP’s Climate Pivot Went Up in Smoke

 What happens when an oil giant ditches its net-zero vows for old-school crude?

A few years ago, at a climate tech conference, a BP executive stood confidently on stage and declared that the company’s future was green.

“We’re no longer just an oil company,” they said. The audience, packed with clean energy entrepreneurs and sustainability investors, applauded. It felt like a symbolic shift - proof that even Big Oil couldn’t ignore the energy transition.

Fast forward to today, and that vision has all but vanished. BP has quietly reversed course. Its renewable ambitions have been downgraded, its climate promises softened, and its capital redirected to what it knows best: oil and gas. The about-face isn’t framed as failure, though. On the contrary - it’s being marketed as a business triumph.

The company’s Q1 2025 earnings, released this week, painted a picture of a streamlined, back-to-basics oil machine. BP's fossil fuel operations are now running at record efficiency, with over 95% uptime in upstream production and 96% in refining. It’s a technical feat the company is quick to tout. Yet, profits fell sharply - down 49% year-on-year to $1.38 billion. That’s the third time in five quarters BP has missed earnings forecasts. Meanwhile, net debt climbed to $27 billion, a $4 billion rise since the end of 2024.

Despite those financial headwinds, the tone from BP’s top brass was relentlessly upbeat. Chief executive Murray Auchincloss described the performance as “exactly what the company needed,” and touted six successful oil and gas exploration discoveries. In parallel, the company has slashed $500 million in costs, partly by eliminating 3,000 contractors. A further 3,400 contractor roles are under review, with the help of data-mining software from Palantir, a controversial tech firm with roots in defence and intelligence. Efficiency, it seems, is the new sustainability.

So what happened to the big green dream? In short: it didn’t make enough money fast enough. In February 2025, BP quietly reset its strategy. Gone was the aggressive push into renewables. The reset came after mounting pressure from activist investors, notably Elliott Management, who pushed Auchincloss to admit that the renewables pivot had gone “too far, too fast.” Their demand was clear - cut spending, maximise free cash flow, and stop pretending to be a wind farm developer.

That pressure worked. BP watered down its climate goals, adjusted its emissions targets, and began exiting parts of its green portfolio. One of the chief architects of its previous strategy, Giulia Chierchia, is leaving the company and won’t be replaced. The message is unmistakable: renewables are no longer at the centre of BP’s growth plans.

From a financial standpoint, the pivot isn’t entirely irrational. While renewable energy offers long-term stability and aligns with global climate goals, it doesn’t yet provide the kind of short-term returns investors expect from a legacy oil company. Oil and gas, by contrast, still generate robust cash flow - even in a down cycle. And while crude prices have dropped to four-year lows, BP can still extract value by running a leaner, more efficient operation. It’s relying on a budget assumption of $71.50 per barrel for 2025. That’s optimistic - Brent crude is currently trading closer to $65 - but BP argues that the mix of upstream reliability, downstream margins, and hedging in its gas business will keep it “balanced.”

It’s a narrative that’s gaining traction with analysts and investors alike. BP’s decision to buy back $750 million in shares this quarter - down from $1.75 billion previously, but still notable - suggests confidence in its new direction, or at least an effort to maintain it. The company has also accelerated asset sales, targeting $3 to $4 billion in divestments this year.

Yet there’s a broader story playing out beneath these balance sheet decisions. BP’s retreat from renewables reflects a growing tension within the energy sector - between long-term planetary interests and short-term shareholder demands. Oil companies love to talk about “transition,” but the transition often seems to stall when markets get rough. For all the climate targets and ESG reports, the structural reality remains: fossil fuels still pay the bills, and investor patience for green experiments is thin when profit margins are under pressure.

That doesn’t mean BP won’t invest in clean energy at all - it still plans to allocate capital to transitional technologies, just more selectively. But the ambition has clearly been scaled back. The original net-zero narrative has been traded for more cautious talk focused on financial stability, risk management, and investor-friendly outcomes. These are the kinds of phrases that land well in earnings calls, but offer little comfort to anyone expecting bold climate action.

The irony is hard to ignore. BP once rebranded itself as “Beyond Petroleum.” Today, it’s circling back to exactly that: petroleum. The company isn’t denying the need for an energy transition. It’s just not planning to lead it anymore.

The climate tech conference where that BP executive spoke feels like a distant memory. So does the applause. BP’s U-turn offers a stark reminder: corporate climate commitments are only as strong as the next earnings report. When fossil fuels are cheaper, cleaner, and easier to monetise than wind farms or solar arrays, old habits tend to re-emerge.