BHP says coal lobby links can foster change as investor rebellion builds


Although the resolution did not receive the votes required to succeed, the sizeable support will heap pressure on the board of the world’s biggest mining company, which is facing scrutiny for funding industry associations expressing climate views deemed inconsistent with its own.

Loading

The lobby group actions – which activists say are at odds with the Paris climate accord’s goal of limiting global warming to below 2 degrees – include support for subsidies for coal-fired power stations and the funding of a pro-coal advertising blitz.

“The level of support for the resolution sends a strong message to BHP,” said Michael Wyrsch, acting chief executive of $10 billion superannuation fund Vision Super.

“BHP is a major funder of these industry associations that are lobbying against sensible climate policy, and its suspension of these memberships would send a strong signal to these associations that pro-coal lobbying needs to stop.”

The resolution on Thursday followed an identical push at the dual-listed BHP’s annual meeting in London last month, at which more than 22 per cent of shareholders voted to dump its memberships, despite the urging of the board.

Brynn O’Brien of the Australasian Centre for Corporate Responsibility, the activist group which drafted the resolution, said institutional investors had “woken up to the impact of anti-climate lobbying” and the long-term risks it posed to their portfolios.

Loading

“This is a huge result on a very direct call for suspension,” Ms O’Brien said. “To all of the industry associations standing in the way of the Paris agreement: time’s up. This is the beginning of the end.”

Mr MacKenzie said environmentalists “should be applauding” the company for its industry-leading climate focus. BHP has earned a reputation as one of corporate Australia’s most vocal advocates for stronger action to curb global warming, pressing the federal government to introduce a price on carbon and this year announcing a $500 million package to drive down emissions from its own operations and from the activities of customers who use its products such as coal and iron ore.

In response to the investor backlash, BHP insisted industry associations played an important role in developing standards, best practices and policies across the industry, including on climate change.

“Climate change is a complex problem,” Mr MacKenzie said. “If we are to successfully develop solutions we need to collaborate with our industry … we need to do it together, and industry associations provide a vital forum for that collaboration.”

Chris Schott, a BHP shareholder and former Labor senator, agreed with the board, arguing that BHP’s influence in mining groups was an important force for promoting stronger climate action.

“I’ve had a long history of involvement in politics … and I learned a long time ago that it’s better to be inside the tent discussing and arguing to persuade people to your view,” he said.

BHP is carrying out a review of its industry group memberships to ensure their positions on climate change matched those of the company. The Minerals Council and Business Council of Australia both rejected the activist claims about its climate stances as “misinformed”.

BHP chief executive Andrew Mackenzie said the Minerals Council was “not in any way” denying the science of global warming but said there were legitimate debates to be had about how to respond.

In 2018, BHP cut ties with the World Coal Organisation due to a clash of views surrounding climate and energy policy.

Most Viewed in Business

Loading



Business

Related posts

Make a comment