At least the world’s biggest resource company doesn’t agree with the most senior business advisor in Australia: BHP Billiton has told shareholders it is very serious about the impact of climate change, and it underpins its strategic thinking. Unlike the Australian government, whose chief advisor Maurice Newman claims the world is cooling.
In a letter to shareholders, and in response to yet another board tilt by Ian Dunlop, BHP Billion chairman Jac Nasser says climate change is an “integral” part of its strategy development and planning, particularly because its assets are large and long-life.
Nasser said it was planning out to 2035, and while climate issues might affect some business streams (read thermal coal) it would likely boost others (potash, uranium and quality metallurgical coal).
Whether you accept them or not, BHP Billiton’s statement is clearly in stark contrast to the Australian government, which doesn’t even bother with such remarks. Its energy green paper, which also is supposed to plan two decades into the future, downplays climate change and says it only “might” have an impact into the future. The government told the UN summit this week that its priority was the economy – read export of fossil fuels.
BHP Billiton’s statement came as Ian Dunlop, the former Shell executive and head of the Australian coal lobby, said he would stand once again as a candidate for the board, seeking to encourage BHP Billiton to become even more engaged on the climate issue.
BHP Billiton said three shareholders, collectively representing 0.06 per cent of the combined issued share capital of BHP Billiton, have nominated Dunlop to the board.
“Based on our analysis of the current skills and experience, we are once again recommending that shareholders vote against the appointment of Mr Dunlop,” the company wrote. “As you may recall, Mr Dunlop was also nominated in 2013 and was unsuccessful with over 96 per cent of shareholder votes cast against his election.”
Still, BHP Billiton’s statement on climate was clearly issued in response to that.
Here it is in full:
Given the importance of this issue, I wanted to outline the way we consider climate change as anintegral part of our business strategy development and planning.The Board has responsibility for BHP Billiton’s strategy. This is reviewed on a regular basis. Ourstrategy of owning and operating large, long-life, low-cost, expandable upstream resource assetsdiversified by commodity and geography has delivered strong returns. It underpins the continuingcreation of long-term sustainable value for shareholders, customers, employees and thecommunities in which we operate.BHP Billiton has a robust corporate planning process. That planning process, and the Board’sassessment of strategy, business portfolio and future investments, is underpinned by scenarioplanning. Scenario planning gives us the ability to evaluate a wide range of global uncertaintiesthrough to 2035 including climate change, geopolitical and technological developments. At the coreof our corporate planning is our acceptance of the most recent assessment of the IntergovernmentalPanel on Climate Change (IPCC). The IPCC’s latest report found that warming of the climate isunequivocal, human influence is clear and physical impacts are unavoidable. We incorporate theIPCC’s assessment in our strategy as the base case for climate change science.We believe our uniquely diversified portfolio is robust across these scenarios and shorter-term shockevents. For example, in a severely carbon constrained world, we believe there is upside for potashand uranium, and also for our high-quality hard coking coal (lower smelting emissions) and iron orelump (direct blast furnace feed) while copper is resilient. In aggregate these mitigate potentialnegative impacts in other commodities, given the relatively short pay-back periods for most presentand future investments in fossil fuel production.Regardless of which direction the world may take, we will always be guided by Our Charter values,including our value of Sustainability, in how we operate our business, interact with our stakeholdersand plan for the future. A more detailed explanation is set out in our 2014 Notice of Meeting.