Embracing ethical investors ‘key’ to future success for BHP, says CEO Mike Henry

BHP should position itself to be a core component of any ethical investment portfolio, BHP boss Mike Henry says.

BHP CEO, Mike Henry. Credit: Supplied by BHP

Embracing ethical investors is the key to future success for the world’s biggest mining company, according to BHP boss Mike Henry.

Mr Henry told a London audience on Friday BHP should position itself to be a core component of any ethical investment portfolio as global funds and communities look to a “build back better” recovery from the coronavirus crisis.

Speaking at an resource investment forum organised by the Financial Times on Friday night, Mr Henry said the coronavirus crisis would sharpen existing trends towards investment in companies that embraced cultural shifts in environmental, social and governance requirements.

“In the face of events of the past year, countless lives have been disrupted and many around the world have been focused on simple survival and then on recovery,” he said.

“But at the same time there’s also been a growing public focus on the need to secure a different and better future. This is reflected in the ‘build back better’ concept.”

Mr Henry said the global recovery from the damage caused by the coronavirus pandemic, if it were focused on a return to growth to drive improvements in living standards in a clean and sustainable way and benefited all, would also drive returns for the mining giant.

“Mining is essential. Global growth, decarbonisation, renewables, electrification … none of this happens without the commodities we produce. The only choice for the industry and the world is how we do this. Overall standards must continue to rise,” he said.

And, while BHP has had its battles with shareholders activists and environmental campaigners in recent years, Mr Henry said the company needed to embrace the pressure investors were putting on mining companies, and take advantage of it.

“Investors have a role to play in this. They need to reinforce these trends through increasingly differentiating between leaders and laggards in this regard. The best companies in an essential sector are going to do very well for shareholders and for the world,” he said.

“The demands on shareholders are increasing. They are required to be increasingly active in shaping the way companies in the sector operate and discriminating in who they invest in,” he said.

“They are increasingly demanding of companies in our sector. They insist that we operate to the highest of standards, and that we are in tune with the world around us. This isn’t just because of the pressures they see from their investors, but because they recognise the importance of this to sustainable value creation.”

BHP shares closed down 52c, or 1.4 per cent, at $36.25 on Friday.