Updated 9am, 12 November 2021
A total of 14.2% of BHP Group’s investors have defied the board to demand the company responsibly wind up its fossil fuel production assets in line with its stated support for net zero emissions by 2050. This morning’s ASX announcement of the combined votes for BHP’s Australian and UK-listed and entities comes after almost 10% of proxy votes cast ahead of the company’s Australian AGM were in favour of the Market Forces-coordinated shareholder proposal.
These investors voted in favour of a Market Forces-coordinated shareholder resolution, which called on BHP to disclose “details of how the company’s capital allocation to thermal coal, metallurgical coal, oil and gas assets will align with a scenario in which global energy emissions reach net-zero by 2050, facilitating the efficient managing down of these assets”, including employee transition and site rehabilitation plans, and “details of how remaining value in the company’s fossil fuel assets will be redeployed or returned to investors”.
By supporting this resolution, investors holding almost US$20 billion worth of BHP shares rejected the company’s inadequate approach to climate action. As outlined in Market Forces’ investor briefing, that approach amounts to BHP facilitating fossil fuel expansion, then divesting assets in an attempt to avoid responsibility for achieving steep real world emissions cuts, supporting employee transition plans, and rehabilitating asset sites.
Speaking about the resolution vote at BHP’s Australian AGM yesterday, Market Forces Asset Management Campaigner Will van de Pol said, “The International Energy Agency has made it clear the pathway to net zero by 2050 requires no new or expanded fossil fuel supply projects.”
“By offloading fossil fuel assets to the likes of Woodside and Stanmore, who have no intention of managing down production in line with global climate goals, BHP is shirking its responsibilities. This is the opposite of the climate leadership BHP claims.”
“While the level of shareholder support for this ground-breaking shareholder resolution should force the company to rethink its ‘pass the buck’ approach to climate action, there will be many investors who claim to be committed to net zero by 2050 that have failed to take this opportunity to bring BHP into line with that goal.”
“Similarly, the significant majority of investors who rubber stamped BHP’s woefully inadequate Climate Transition Action Plan – including Climate Action 100+ leads AMP, BMO and HSBC who publicly welcomed the plan – must be called out for their failure to see through BHP’s greenwash.”
Enabling Woodside to go all in on climate destruction
In August, BHP announced a plan to offload its entire oil and gas portfolio to Woodside. In return, BHP shareholders would receive shares in the expanded Woodside business.
As we said at the time, this deal would leave BHP investors lumped with shares in a massive and expanding pure play fossil fuel producer, when we know the industry needs to rapidly shrink if we are to avoid the worst impacts of climate change.
Meanwhile, Woodside is going all in on its bet against the Paris climate goals, and is willing to take on BHP’s unwanted climate transition risk exposure and looming decommissioning liabilities in order to pursue even more expansion, including the ticking carbon bomb that is the Scarborough gas project.
Woodside and BHP are currently partners in the undeveloped Scarborough offshore gas field, which Woodside is aiming to make a final investment decision on by 15 December. Along with producing the emissions equivalent of 15 coal power stations running for 30 years, the Scarborough gas project and associated expansion of Pluto LNG facility (Pluto 2) threaten to accelerate degradation of the Murujuga Rock art (proposed for World Heritage listing) due to industrial emissions, and would also cause significant impacts to the local marine environment.
The proposed merger deal would remove any potential barriers or friction BHP may have created in making the call to go ahead with Scarborough. Woodside has also said the deal will make it easier for the company to fund new development projects. The company plans to increase production by around 70% over the decade to 2028, despite the climate science telling us gas use must decline significantly over that period if we are to have a chance of limiting warming to 1.5°C.
The Woodside deal and Scarborough gas project were the focus of many shareholder questions at yesterday’s AGM, with Chair Ken MacKenzie repeatedly having to try and defend the indefensible: Woodside’s climate-wrecking gas expansion plans.
BHP was also challenged over the lack of climate leadership demonstrated by its plans to offload metallurgical coal mining assets to Stanmore Resources, a company with no plans to manage down production in line with global climate goals.