7 November, 2019
BHP Chair Ken MacKenzie has publicly applauded the European Commission’s proposal to achieve net-zero emissions by 2050. However, until now it has been unclear as to whether BHP will adopt the same goals.
This appears to have resolved at today’s annual general meeting in Sydney, where a shareholder questioned whether BHP is aiming achieve net-zero emissions by 2050. MacKenzie responded simply, “Yes.”
Asked to clarify whether BHP’s scope 1, 2 and 3 emissions will align with this goal, MacKenzie replied, “Scope 1 & 2 are already aligned with zero net emissions 2050… We have announced scope 3 goals as well to move towards lower emissions in our supply chain”.
BHP seems to be ticking many boxes with respect to climate change. In July this year, CEO Andrew Mackenzie was clear that “global warming is indisputable” and declared that global reliance on fossil fuels posed an “existential” risk to humanity. BHP also committed $400 million US to reduce scope 1, 2 & 3 emissions. The inclusion of scope 3 emissions (those produced downstream from BHP’s mining operations) in this plan allowed the company to avoid a shareholder resolution coordinated by Market Forces.
But BHP is hardly a climate hero. The company is one of the biggest carbon polluters globally and one of the biggest donors to Australia’s coal lobby groups, who have been relentless in lobbying for weak climate policy in Australia.
This was highlighted today by a shareholder resolution coordinated by the Australasian Centre for Corporate Responsibility (ACCR), and co-filed Vision Super, MP Pension, Church of England Pensions Board, ACTIAM and Grok Ventures – altogether representing $140 billion of holdings. The resolution received a high vote of 22% at its UK AGM earlier this month, but scored an even bigger vote today with 29.6% of Australian shareholders in favour.
Is $400 million enough for climate action?
$400 million might sound huge, but in actual fact, BHP has allocated only 1% of its company revenue to addressing the global crisis that climate change poses.
ACCR Executive Director Brynn O’Brien highlighted the disparity between BHP’s predicted spending on oil and gas – an expected $1 billion each year, compared to the $80 million annual spend to address climate. Considering the recent Global Witness report confirming that any production from new oil and gas fields (beyond those already in production or development) is incompatible with limiting warming to 1.5°C, it’s clear BHP aren’t taking enough action to address the climate issue.
O’Brien asked the board, “Why should shareholders take your commitment to address climate change as genuine if you plan to spend less than 10 per cent on looking for opportunities to address it, than of what you will spend looking for new opportunities to cause it?”
The Chair attempted to assure shareholders that BHP had received “very strong support for our leadership around climate change” from institutional investors. He then turned off O’Brien’s microphone to block further questions.
Unlike BHP, Rio Tinto has not yet taken any steps to address scope 3 emissions. Market Forces is coordinating a shareholder resolution asking Rio Tinto to take this basic step and address the company’s scope 3 emissions.
If you have shares in Rio Tinto, you can sign onto the resolution here.