BHP faces shareholder anger over fossil fuel

Mining titan BHP is facing growing shareholder dissent over its close links with industry groups that support the fossil fuel industry – with over a quarter of its investors voting to end these affiliations. 

At the Anglo-Australian mining group’s AGM held last week, 27.07% of shareholders voted for a resolution to suspend BHP’s membership of industry associations that are involved in lobbying found to be inconsistent with the goals of the Paris Agreement. 

BHP, the world’s biggest mining company, has been facing increased shareholder pressure to quit groups like the Minerals Council of Australia, which are known to support carbon-intensive industries. 

Shareholders including Standard Life Aberdeen, Vision Super, tech billionaire Mike Cannon-Brookes and the Australian Council of Superannuation Investors have all backed the resolution. 

At BHP’s UK-listed company’s AGM held in London in October, 22.16% of shareholders voted to end these industry group links, matching the sentiments of their Sydney counterparts. 

While 72.93% of shareholders in Australia rejected the motion, the dissenting group has claimed the vote as a small victory. 

Brynn O’Brien, executive director of the Australasian Centre for Corporate Responsibility, which put forward the resolution, said the vote is a strong signal to BHP that Australian investors have woken up to the impact of anti-climate lobbying by its members, and the long-term risks it poses to their portfolios. 

“This vote is even higher than the BHP vote in London, which we attribute to the proportionally larger representation of Australian investors on the BHP register, and the scrutiny that BHP has been under locally for the oppositional advocacy of its Australian industry associations,” he said. 

“This is a huge result on a very direct call for suspension, and represents an awakening for the Australian investment community. To all of the industry association standing in the way of the Paris Agreement and their member companies: time’s up. This is the beginning of the end,” O’Brien said. 

The vote comes as BHP gets set to bring in a new chief executive. 

Mike Henry, currently president of operations minerals at BHP, will take over as CEO from 1 January 2020, replacing Andrew Mackenzie. Henry has 30 years’ experience in the global mining and petroleum industry, spanning operational, commercial, safety, technology and marketing roles.  

Investors are expected to scrutinise Henry’s stance on climate change as the company continues to revise its ESG polices. 

While BHP ended its membership of the World Coal Association last year following shareholder pressure, its ties with the Minerals Council of Australia still remain a bone of contention. 

However, the company has been attempting to reduce its environmental impact and announced last month that two of its largest copper mines in Chile would run on renewable energy by 2020. 

Speaking at the AGM in Sydney, Andrew Mackenzie said the company accepted its responsibility to take action on global warming and reduce its greenhouse gas emissions. 

“Unlike the control that we can exercise in our own operational environments, we cannot mandate that our customers reduce their emissions,” he said. “But we can collaborate with them and suppliers, and other partners, to drive actions that reduce greenhouse gas emissions from the major uses of our products throughout our value chain.” 

Last Updated: 15 November 2019
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