BP putting “shareholders above society”, says IPPR

1 Aug 2023

Press Story

  • Despite profits falling to £2bn, the energy giant is giving a further £1.2bn to shareholders

  • For every £1 BP spent on low carbon investments last quarter, they gave shareholders £9 in buybacks

The UK’s leading progressive thinktank, IPPR, has responded to the announcement that BP has made £2.0 billion ($2.6 billion) in profits in the last quarter (Apr-Jun). BP have also announced a new round of share buybacks, transferring £1.2 billion ($1.5 billion) to shareholders. Over the last four quarters BP has completed more than £7.8 billion ($10 billion) of buybacks from surplus cash flow.

Pranesh Narayanan, research fellow at IPPR, said:

“BP is putting shareholders above society and the climate, stating in their annual accounts that ‘a resilient dividend is BP's first priority’. Despite profits falling, the company is still making billions off the back of higher oil prices. But instead of investing those profits in the green transition, BP is transferring it straight to their shareholders through share buyback schemes. For every £1 BP spent on ‘low carbon investments’ they rewarded shareholders £9 tax-free.”

A report published by IPPR and Common Wealth argued that share buybacks are a direct cash transfer away from households struggling to pay bills, via energy company profits, to already-wealthy shareholders. The report, Buy Back Better, contained the following analysis:

  • Share buybacks channel profits from companies to shareholders by increasing the value of shareholders’ stock.

  • FTSE 100 companies announced £55 billion share buybacks in 2022.

  • President Biden has recently introduced a tax on share buybacks to help alleviate the cost-of-living crisis in America.

  • Share buy backs were actually illegal as a form of market manipulation until 1981.

ENDS

Pranesh Narayanan and Dr George Dibb are available for interview

CONTACT

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org

NOTES TO EDITORS

  1. The IPPR paper, Buy back better: The case for raising taxes on dividends and buybacks, can be found here: https://www.ippr.org/research/publications/buy-back-better-the-case-for-raising-taxes-on-dividends-and-buybacks

  1. IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org