Major super funds push BHP to cut ties with lobby groups

A similar resolution at dual-listed BHP’s annual investor meeting in London last month gained the support of nearly one in four shareholders, against the urging of the board.

“We don’t see any reason why investors wouldn’t support this resolution,” Michael Wyrsch, the acting chief executive of Vision Super, told The Age and The Sydney Morning Herald on Wednesday.

“The support of proxy advisers like ACSI is really important because they influence large numbers of investors. We’re really seeing a shift in sentiment in Australia on the issue of pro-coal lobbying, and it’s a step in the right direction.”

BHP, the world’s biggest mining company, has been a leading advocate among corporate Australia for climate change action, pushing policymakers for a price on carbon and recently setting ambitious goals to combat not only its own emissions but emissions from customers that use its products such as coal and iron ore.

But the company has come under growing pressure over its links to lobby groups that have advocated for policies said to be inconsistent with its own positions.

Brynn O’Brien, executive director of the Australasian Centre for Corporate Responsibility, which prepared the resolution, said ACSI’s support was significant.


“ACSI members include some of the largest Australian asset owners and managers,” she said. “The favourable recommendation … shows that Australian investors have lost patience with the companies that fund fossil fuel lobbying.”

ACSI’s advice centred on concerns that lobbying by BHP’s industry groups had at times not been “in line” with the company’s own stated positions, and the fact there had not been sufficient steps to address the divergence, according to a source with knowledge of the matter.

Ms O’Brien said Australia’s listed companies were “on notice” that lobbying counter to the goals of the Paris agreement – to limit warming to 1.5 degrees above pre-industrial levels – would “no longer be tolerated by major Australian asset owners and managers”.

BHP chairman Ken MacKenzie last month said membership of industry groups provided a “range of benefits that aren’t discussed in these resolutions, providing BHP with the ability to lead, influence and strengthen industry standards on issues such as safety, environmental protection and indigenous rights”.

BHP, which has urged investors to vote down the resolution, said it was conducting a review of its memberships but insisted industry associations played an important role in developing best practices and policies across the sector.

The Business Council of Australia, in a letter to investors, stressed that the group supported “strong action on climate change”, and sought to clarify the “misinformation” suggesting BCA was lagging behind members and blocking meaningful action on climate change.

The Minerals Council of Australia, which supports the Paris goals, described some of the activists’ accusations as “misinformed”.

It said it acknowledged that sustained global action was needed to reduce the risk of human-induced climate change and supported a “measured transition” to a low-emissions economy.

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