Home | Blog | BHP set to pull out of World Coal Association over climate concerns
Global mining and oil company BHP said it intends to pull out of the World Coal Association (WCA) over its position on climate change. This follows the publication of a review of industry associations that have an active position on climate and energy policy analysing if these views are materially different to its own position.
The report set out the principles which guide the company’s membership of, and participation in, industry associations, and the methodology employed to identify material differences. It also described considerations and possible courses of action for BHP where a material difference is identified. Considerations included the likely impact of the material difference on policy debate and the benefits BHP derived from the broader activities of the association, including in areas such as health, safety and environment.
Following the review of 21 industry associations which focused on 10 climate and energy policies identified as being of key importance to BHP, the company said it found seven material differences in position identified across three associations: The Minerals Council of Australia (MCA); The United States Chamber of Commerce and the WCA.
BHP said due to the material difference between it and the WCA, and because the company did not derive substantial direct benefit from the association, it had reached a preliminary decision that it would cease being a member although it would have discussions with the WCA before making a final decision.
In respect of the United States Chamber of Commerce, the review identified four material differences and separately found that BHP received a moderate level of benefit from the Chamber. However, given the existence of broader benefits and the significant role the Chamber played in the US business community, BHP said it was appropriate to seek additional information from the Chamber prior to making a final determination as to next steps with respect to membership.
The company said that it BHP received a high level of benefit from the broader activities of the MCA and would, therefore, remain a member. However, the company said it would formally communicate the identified material differences to the MCA board; request that the MCA refrain from policy activity or advocacy in these areas; and it would maintain a register of material differences.
BHP’s review demonstrated a leadership in respect of climate change. Manifest’s say on sustainability analysis has given BHP a high score in 2017 of 90%, which has only been beaten by only two companies; BMW (94% in both 2015 & 2016), and Mondi (91% in 2014). This demonstrates BHP’s commitment to strong sustainability policies and reporting on its environmental impact.
Geoff Healy, chief external affairs officer at BHP said, said while no industry association represented the views of any single member, they were important for sharing best practice, the development of technical standards and policy and to bring together technical expertise and experience.
Healy said: “Active participation within industry associations is an opportunity for BHP to improve its own performance and to support industry as a whole in making a positive contribution. This review makes clear the principles for our ongoing participation in industry bodies. While we won’t always agree with our industry associations, we will continue to call out material differences where they exist and we will take action where necessary, as we have done today.
“Importantly, we will also continue to communicate our own views directly to investors, governments and civil society and we will redouble our efforts to engage, clearly and constructively, with our industry associations to positively influence the position they take on matters important to our company.”