Investors haul mining giant BHP over coals on “climate hypocrisy” at AGM

Shareholders today pointed the finger at mining giant BHP‘s “hypocritical” stance on climate policy at the AGM of its UK-listed entity.

A group of 100 Australian shareholders filed a resolution with the company’s Australian-listed entity, requesting the board review its spending on memberships of industry groups, including trade associations, that do not align with the company’s industry-leading climate policies.

The shareholders, led by the Australasian Centre for Corporate Responsibility (ACCR) propose BHP withdraw from these groups where positions clash.

When the resolution was lodged in September, the miner committed to publishing by the end of the year a full inventory of its climate positions, where they differed from those of their lobby groups.

But today, the firm remained tight-lipped on its intentions regarding lobby group membership and funding, raising concerns that funding will not be revoked in spite of the ongoing review.

BHP Billiton Limited is the largest member of the Minerals Council of Australia (MCA), which wields tremendous influence over Australian energy policy decisions – most recently being heavily involved in binning Australia’s proposed Clean Energy Target.

Such moves have the potential to erode shareholder value over time. They add to investment risk and uncertainty by creating political standstill on important energy developments.

Conflicting agendas on climate change – where is BHP going wrong?

BHP has taken strong supportive positions on the Paris Agreement, carbon pricing and the clean energy transition. But its suspected multimillion dollar membership fees to organisations that exist to destabilise progressive climate policy undermine their front-facing statements. Environmental lawyers ClientEarth have branded this “climate hypocrisy”.

ClientEarth corporate lawyer Alice Garton said: “Time and again we see fossil fuel behemoths purporting to back climate progress, while funding obstructive policy pressure groups behind the scenes. This drives a systemic risk and betrays investor confidence. It is unmitigated climate hypocrisy.

“No business is exempt from the risks posed by climate change, particularly those in the mining and extractive industries. It is time for these businesses to streamline their approach to energy policy and get decisively behind the 1.5C goal of the Paris Agreement to protect investors, the economy and the planet.”

ClientEarth lawyer Daniel Wiseman attended the AGM and read a statement prepared by ACCR, which assisted the shareholders to prepare and file the resolution. The firm made no concrete affirmation that lobby group funding would be withdrawn, but referenced its ongoing review of membership to groups like the MCA.

Further pressure is expected at the Melbourne AGM in November.

ACCR Executive Director Brynn O’Brien said: “Australian investors cannot shirk their responsibility. BHP’s investors are fully aware of the damage that the Minerals Council of Australia continues to do democracy, the environment, and BHP’s bottom line. They need to step in to stop BHP shelling out millions of dollars to the Minerals Council each year.”

The Californian state employees pension fund, CalPERS, predeclared it would vote in favour of the resolution at the London AGM.

Investor representatives from HSBC and the Church of England also voiced support for the concerns raised in the resolution.

Votes for and against the resolution will be revealed after the Melbourne AGM, scheduled for 16 November 2017.

Alice and Dan are Australian-qualified lawyers.

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