BHP urged to step up climate advocacy by shareholder activists

30th August 2022 By: Bloomberg

BHP urged to step up climate advocacy by shareholder activists

BHP is a major exporter of iron-ore and metallurgical coal.

Australian mining giant BHP Group should “proactively advocate” for stronger climate policy, according to a new shareholder resolution lodged by an activist investor group.

The resolution, lodged by the Australasian Centre for Corporate Responsibility and sponsored by at least 100 BHP shareholders, calls on the company to look beyond its own business activities and take an active role in promoting Australian government policies.

The company should help lobby for a new emissions trading mechanism and for phasing out fossil fuel subsidies, and back more rigorous measurement of methane emissions from coal mines, the resolution said. Those calls go further than previous ones, which focused more narrowly on BHP’s own climate policy and its membership in pro-fossil fuel industry associations.

Since 2020, BHP has been telling its shareholders that limiting warming to 1.5 degrees Celsius is the best outcome for the company,” Harriet Kater, the ACCR’s Climate Lead, said in a statement. “BHP needs to move beyond its industry associations by positively advocating for the ambitious policy needed to get Australia on track for a 1.5 degrees Celsius pathway.”

The resolution calls on BHP to lobby for policies that would support a “global green iron and steel industry.” The company, a major exporter of both iron ore and metallurgical coal, has vested interests in emissions-intensive steelmaking processes.

“BHP is Australia’s largest company with huge political influence and a massive opportunity to align business interests and policy with a safe climate,” Kater said.

A separate resolution, also lodged by the ACCR, demands BHP include “climate sensitivity analysis” in its reporting that covers all commodities and have a scenario “aligned with limiting warming to 1.5 degrees Celsius.”

Investors will vote on the resolution at the company’s next annual shareholder meeting, BHP said in a statement. The date for the meeting is yet to be announced. The company didn’t immediately respond to a request for comment.

The ACCR has lodged numerous climate-related shareholder resolutions with BHP, including a landmark 2019 resolution calling it to rescind membership of industry groups that lobby against climate policy, which was backed by 27% of shareholders.