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Coal and metals miner BHP unveils $400m climate investment plan

BHP Group has pledged to invest $400m in developing technologies to cut its greenhouse gas emissions from both within its own business and the use of its products, in a major ramp up of the mining giant's sustainability commitments.

The multinational mining, metals and petroleum giant unveiled a number of new climate change commitments yesterday, with CEO Andrew Mackenzie arguing the move was essential to help combat the looming"climate crisis" and future-proof the company.

Alongside the five-year Climate Investment Programme, the Anglo-Australian company promised to set a new Paris-aligned medium-term science-based target for its direct and supply chain (Scope 3) emissions next year.

That means its emission reduction goals will soon cover emissions not just from its own activities, but also from those produced by the use of the fossil fuels and other products it sells.

These targets are in addition to the firm's existing short-term goal to cap its 2022 emissions at 2017 levels, and its long-term coal to achieve net zero emissions by mid-century, it said.

Announcing the new commitments in a speech in London yesterday, BHP's CEO Andrew Mackenzie, said the $400m, five-year Climate Investment Programme would "drive investment in nature-based solutions and encourage further collective action on Scope 3 emissions".

"Commercial success of these investments will breed ambition and create more innovative partnerships to respond collectively to the climate challenge," he said. "We must take a product stewardship role for emissions across our value chain and commit to work with shippers, processors and users of our products to reduce scope three emissions."

Other announcements today included plans to strengthen the link between the firm's emissions performance and executive pay packets, which it said it would clarify in more detail next year. BHP said the move would "further reinforce the strategic importance and responsibility of reducing emissions as a business".

BHP also said it will develop a climate portfolio analysis report that would evaluate the potential impacts of a broader range of scenarios and a transition to a 'well below' 2C world - the lower ambition target set out in the Paris Agreement on climate change.

BHP additionally said it would be joining the Responsible Steel initiative.

Despite its heavy involvement in fossil fuels, BHP has in recent years made efforts to appease its climate concerned-investors and also stand out among its competitors in the global mining sector with a number of commitments towards addressing climate change.

It has previously hired climate scientist Dr Fiona Wild to its executive team, published its first detailed climate scenario analysis risk disclosures, and signed up to the guidelines of the Taskforce on Climate-Related Financial Disclosures (TCFD).

However, unlike its rival Rio Tinto which has now sold off all of its thermal coal assets, BHP still owns several high-carbon assets including the Mount Arthur thermal coal mine in Australia and part of the Cerrejón open-pit coal mine in Colombia.

Recent reports suggested BHP is keen to exit thermal coal altogether, but due to the declining outlook for coal its assets are unlikely to fetch as high a price as they might have even a couple of years ago.

The firm has also faced criticism from campaigners and investors over its membership of lobby groups accused of seeking to limit climate action, such as the Minerals Council of Australia, although BHP did quit the World Coal Association in 2017.

In his speech yesterday, Mackenzie sought to emphasise that the company requires "a considered and orderly transition to a lower carbon world in which resource companies, like BHP, have both critical expertise and a key role to play and hence are worthy of continued investment".

Source: www.businessgreen.com