BHP resists calls to quit mining lobby groups
BHP has stared down calls from shareholder activists for it to quit mining lobby groups targeted by climate change campaigners.
BHP has stared down calls from shareholder activists for it to quit mining lobby groups targeted by climate change campaigners, saying membership has enabled it to “lead” in the global debate.
In a statement released to the market last night, BHP recommended shareholders vote against demands for it to withdraw from industry associations that advocate positions “inconsistent” with carbon reduction agreements.
It came as BHP chief financial officer Peter Beaven launched a defence of the company’s position in a briefing to retail investors on Thursday, saying BHP has taken a public stance on climate change because it is a “massively materially important” issue for shareholders.
Responding to questions about whether Mr Mackenzie’s position had the support of the BHP board, Mr Beaven said its board and senior management were united on the need for the global mining giant to speak out and act on the issue of climate change.
“Does it have the support of the board? Absolutely, no question. And the reason that is the case is that these are really important issues. These are not issues that we are commenting on because they have some moral basis or there is a personal perspective on these things,” he said.
BHP has faced vocal criticism this week from shareholders including Atlassian billionaire Mike Cannon-Brookes who have voiced scepticism about its environmental credentials.
The latest resolution for BHP’s annual shareholder meetings was lodged on Tuesday by the Australasian Centre for Corporate Responsibility (ACCR) and backed by the private investment vehicle of Mr Cannon-Brookes, Grok Ventures, the Church of England, Dutch fund Actiam and Australian fund Vision Super. It called on BHP to suspend its membership of industry associations whose lobbying activities were inconsistent with the goals of the Paris climate agreement, including the Minerals Council of Australia, coal lobby group Coal21, the Queensland Resources Council and the Business Council of Australia.
In a statement released after the close of the market on Thursday, BHP’s board recommended shareholders vote against the motion, saying it was already conducting its biennial review of its lobby group memberships, which “includes comparison of the positions taken by relevant industry associations since January 2018 as against the positions held by BHP in climate and energy policy areas of importance to the company”.
BHP’s first review was published in 2017, and prompted the company to quit its membership of the World Coal Association and pressure the MCA to adjust its own public statements on climate change.
The company said on Thursday the ACCR motion failed to acknowledge its membership of industry groups allowed it to take a leadership role in influencing both government and industry, in their approach to climate change and a host of other issues, including health and safety, workplace diversity and community engagement.
Meanwhile, Mr Beaven told shareholders that, if action was not taken to mitigate climate change, the issue was likely to affect demand for BHP’s core commodities — including metallurgical coal, iron ore, and oil and gas.
“We believe in the climate science. But it’s almost irrelevant what we think about climate science, so long as the rest of the world, or enough of the rest of the world, thinks this is important, so that they will collectively do something about the issue,” he said.
“And the issue for us from a business perspective is that it could — probably will — have an impact on the demand for a number of the products we produce today — and, therefore, the profitability of this business.”
The BHP CFO said the company’s advocacy and work in reducing its own emissions, as well as the $US400m ($587m) it promised to spend working with customers to reduce carbon emitted from processes using BHP’s products, would help meet global climate change goals.
“That in turn will help mitigate any risk to the demand for our products. This is not just an issue for BHP, this is an issue for Australia,” he said.
“Any position we take on this is because it has a direct impact on shareholders in the near term, and in the long term — and they are massively materially important issues.”
Questioned about recent speculation on a possible BHP exit from thermal coal, Mr Beaven confirmed the company was prepared sell its Mt Arthur mine in NSW and its stake in the Cerrejon mine in Colombia — if the price was right.
“If someone came along and gave us a cash cheque that represented that value of those businesses, we would absolutely take a look at that,” he said.
“If that doesn’t happen, we’ll happily continue to run those mines.”
BHP shares closed down 25c to $36.07 yesterday.