Introduction from our group chief executive

We have set out our strategy for the coming decades, integrating our ambition to be a safe, strong, successful business with our aspiration to be a good corporate citizen and part of the solution to climate change

I take pride in the fact that BP not only provides returns for our shareholders, but billions in tax revenues to support public services, jobs for staff and suppliers, and of course, heat, light and mobility for customers - enabling millions to enjoy higher standards of living around the world.
Bob Dudley, group chief executive

Sustainability is at the heart of BP’s strategy. Ours is a long-term business and I believe that our company will only prosper over the long term if we operate safely and fulfil a positive role in society. In particular, the energy transition underway poses a significant challenge - how to meet the world’s increasing demand for energy while, at the same time, reducing carbon emissions. Every part of our business has a tremendous contribution to bring to this.

Large companies have responsibilities to multiple groups. I take pride in the fact that BP not only provides returns for our shareholders, but billions in tax revenues to support public services, jobs for staff and suppliers, and of course, heat, light and mobility for customers - enabling millions to enjoy higher standards of living around the world. As Henry Ford said: “A business that makes nothing but money is a poor business.”

In recent months, we have set out our strategy for the coming decades, integrating our ambition to be a safe, strong, successful business with our aspiration to be a good corporate citizen and part of the solution to climate change.

Our strategic framework is rooted in society’s need to use more energy while reducing carbon emissions. It reflects a changing global fuel mix in which oil remains important but is used more efficiently; the cleanest traditional fuel, natural gas, is a vital energy source in a lower carbon economy; and renewables grow faster than any other form of energy.

The four priorities of our strategic framework are aligned with these trends. First, we plan to run a highly competitive upstream business with an expanding gas portfolio. Second, we will have a market-led downstream business providing fuels and lubricants that help make vehicles more efficient and lessen their carbon impact. Third, we will run a growing renewable energy business, alongside a dynamic venturing arm. Fourth, we will underpin all of these businesses with an ongoing drive to modernize BP and maximize efficiency in ways which are good for business and good for the environment.

The environmental dimension of this strategy builds on two decades of action and advocacy on climate change, which saw important new steps in 2016. We made strong progress with our large natural gas projects and signed long-term gas supply agreements in Azerbaijan, Egypt, Indonesia, Oman and elsewhere, providing a cleaner alternative to higher emissions fuels at scale. And to maximize the potential of gas, we are investigating how we can best reduce the methane emissions of our operations. We now have the largest operated renewables business among our peers, with major biofuels and wind businesses employing more than 5,000 people.

BP also supports a series of low carbon start-up companies through our venturing team. The industry Oil and Gas Climate Initiative, which I chair, announced $1 billion of investment in low carbon technologies, initially focused on reducing methane emissions from gas production and accelerating deployment of carbon capture, use and storage.

In 2016, these steps to build a sustainable future came at the same time as we responded to the short-term pressures of the business environment, maintaining critical investments for safety and future growth while acting to control costs and increase our operational and financial resilience.

Safety will always be our top priority and the record for last year shows that we broadly held the gains made since 2010, with many fewer incidents and injuries across the business. This was in a year in which we increased our activities, with an additional 13 million hours of working time. However, we did suffer three workforce fatalities in 2016, a loss of life that we deeply regret. As this report explains, we are taking actions to manage risk, such as working more closely with contractors, including joint simulation exercises, and using technologies such as sensors and crawler robots to detect potential problems and keep our people away from harm.

Our future depends on our people - their health, safety, capability and dedication. In 2016, I was encouraged to see in our surveys that their levels of confidence, pride and trust rose, despite tough circumstances and a further reduction in staff numbers. That says a lot about the resilience and spirit of the BP team. I am also proud that we have a truly global, diverse workforce, with large numbers of citizens of the countries where we work.

I believe that global companies with clear values can act as a stabilizing and positive force in local communities and this report shows how we approach that role. We invest in education, enterprise and energy sustainability - from the Enterprising Science programme for teachers in the UK to support for hospitals and small businesses in Egypt. We act to support labour rights among our suppliers, and we enforce a zero-tolerance policy towards bribery and facilitation payments. We assess and respond to environmental and social issues raised by our operations, from piloting new technologies for air quality monitoring in Azerbaijan to helping to build a new water pumping station for a community in Iraq.

Wherever we work, we stand by our values of safety, respect, excellence, courage and one team. There is much still to do, but if we can continue to deliver meaningful benefits to our many stakeholders as well as building a business that is both economically and environmentally sound, then I believe BP can look ahead to a successful future as a sustainable business in a sustainable world.

Bob Dudley
Group chief executive
6 April 2017

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