Environmental activist Ian Dunlop delivered a speech to BHP Billiton shareholders in London last night, marking his second attempt to get elected to the board of the Australian resources giant on a platform of climate action and energy reform.
Dunlop, whose resume includes stints as a senior executive at Shell and as head of the Australian Coal Association, tried – and failed – to win a position on the company’s board in 2013, in his first attempt to influence the company’s climate change strategy.
In his speech at BHPB’s annual general meeting on Thursday night, Dunlop reiterated his desire to join the board to help guide the company on the climate and energy challenge the world faces, and its implications for BHPB shareholders.
“I would like to congratulate (CEO) Andrew Mackenzie and his team on the action they have taken since I raised these matters at last year’s AGM,” Dunlop said in the speech.
“With the articulation of a new climate change policy and extensive scenario analysis, BHP Billiton is setting the standard for the global resource industry, which is most encouraging.
“But having claimed leadership, the Company must now face up to the real challenge. Despite the progress of the last 12 months, I believe that has yet to occur.”
BHP chairman Jac Nasser again urged shareholders to vote against Dunlop’s nomination, after assuring them the company and the board ranked climate change as one of the most important strategic issues.
In his speech to the AGM in London, Nasser said it was clear that sustainable growth requires “substantial reductions” in greenhouse gas emissions, and this will “change the structure” of energy markets around the world.
He also called for a stronger carbon price and additional, complementary measures to promote renewable, energy efficiency and low carbon technologies.
“A carbon price alone will not be sufficient to drive the pace and scale of the global response required,” Nasser said. “Complementary measures are needed to improve energy efficiency, support the development of low emission technology, build resilience to the impacts of climate change and address sustainable development.”
But Dunlop argues that BHPB’s updated climate policy, modelled on the IPCC’s assessment of the science, still has inconsistencies and significant weaknesses, most notably a failure to quantify the “big risks”.
“These are the “tipping points”, caused by non-linear feedback loops, where the climate may flip from one relatively stable state to another far less conducive both to human development and to the economic stability so essential for BHPB’s prosperity,” Dunlop said in his speech.
“This requires that prudent risk management go beyond the conservative IPCC view, recognise these big risks and take urgent action.
“But the Company’s risk management approach does not convey much sense of urgency. Likewise, the scenarios disclosed this year are too conventional.”
Most importantly, says Dunlop, BHPB’s failure to acknowledge the urgency for change is causing the company to miss major opportunities for shareholder value creation.
“The prosperity of BHPB depends upon a stable and growing global economy,” he said.
“Growth now depends upon a rapid transition to a low-carbon world. Stability requires urgent action to make that transition in good order. It is no use waiting for the market, or government policy, to dictate the change, otherwise it will be too late, with the risk of substantial shareholder value destruction.
“Rather, proactive leadership is required to seize what is the greatest value creation opportunity in human history.”