Shareholder Resolution

ACCR Shareholder Resolution to BHP Group Ltd on climate-related lobbying.

The Australasian Centre for Corporate Responsibility (ACCR) has filed a Shareholder Resolution to BHP Group Ltd (ASX: BHP) on industry association memberships and climate-related lobbying.

This page contains the resolution and its supporting statement, and will be updated with links to news and additional briefings about this engagement.

Ordinary resolution on climate-related lobbying

Shareholders request that our company strengthen its review of industry associations to ensure that it identifies areas of inconsistency with the Paris Agreement.

Where an industry association’s record of advocacy is, on balance, inconsistent with the Paris Agreement’s goals, shareholders recommend that our company suspend membership, for a period deemed suitable by the Board.

Nothing in this resolution should be read as limiting the Board’s discretion to take decisions in the best interests of our company.

Supporting statement to Resolution 2 (969 words including footnotes)

ACCR supports our company’s commitment to the goals of the Paris Agreement and its goal of achieving net zero operational emissions by 2050.[1]

Our company’s own analysis concluded that a 1.5°C scenario would be an “attractive scenario for BHP, for our shareholders and the global community.”[2] This resolution seeks to ensure that the advocacy of our company’s industry associations is consistent with that scenario and the interests of shareholders.

Investor expectations for BHP’s climate advocacy

Following significant support (22.4%) for ACCR’s shareholder resolution in 2020, investors urged our company to:[3]

  1. “constructively influence” its industry associations to further enhance the energy transition;
  2. ensure that the COVID-19 pandemic was not used (or seen to be used) as a rationale to impede progress on alignment with the Paris Agreement goals;
  3. take “tangible action” to drive consistency with its industry associations.

As demonstrated below, these investor expectations have not been met.

Australia’s lack of climate policy

In February 2021, Bloomberg ranked Australia’s climate policies as the weakest of the largest developed economies.[4] In June 2021, Australia received the lowest score awarded to any of the 193 UN member states for climate action.[5] Australia’s commitment to reduce emissions by 26-28% by 2030 (from 2005 levels) has been deemed inadequate by a range of experts.[6] Australian government forecasts suggest that emissions will decline by just 22% by 2030.[7]

ACCR has engaged our company on the issue of climate-related lobbying for more than four years. Despite improved transparency of our company’s governance of industry associations, UK think tank InfluenceMap rates our company’s climate policy footprint ‘D’, (scale A-F), making it one of the most oppositional companies on climate and energy policy in Australia.[8] Our company remains a member of 14 industry associations with misaligned climate lobbying practices (ranked D or below).[9]

On balance, the impact of our company’s industry associations on Australia’s climate and energy policy has been overwhelmingly negative, and there has been little improvement since 2017.

Gas-fired recovery

In September 2020, the Australian government announced it would pursue a “gas-fired recovery” from the COVID-19 pandemic, by incentivising the development of multiple new gas basins.[10] It has subsequently committed more than $782 million in subsidies to the gas industry in the last 12 months.

Throughout 2020-21, the Australian Petroleum Production and Exploration Association (APPEA) actively lobbied for a “gas-fired recovery”. APPEA included the following achievements in its 2020 annual report:[11]

  • “Advocated successfully for natural gas to be recognised as a critical fuel for many decades to come... including by the Australian Government as a part of its post-COVID-19 pandemic economic recovery plan.”
  • “Advocated on the role of natural gas in reducing global greenhouse gas emissions and for this to be recognised as part of Australia’s efforts to address climate change… This is now a core part of the Australian Government’s narrative on the role of the industry.”

APPEA’s exploitation of the pandemic to expand gas extraction is clearly at odds with the expectations communicated to our company by investors throughout 2020-21.

Recent industry association advocacy

Despite our company’s commitment to the Paris Agreement, its industry associations continue to promote increased coal and gas extraction, advocate for distant technological solutions to emissions reductions and do not support more ambitious 2030 targets.

Australian Petroleum Production and Exploration Association (APPEA)
InfluenceMap score: E+

  • Advocated and took credit for the Australian government’s “gas-fired recovery”;[12]
  • Updated its Climate Change Policy Principles to support net zero emissions by 2050, which also include the expansion of the gas industry;[13]
  • Lobbied for amendments to the Australian Renewable Energy Agency (ARENA) to enable it to invest in carbon capture and storage (CCS) to enable fossil hydrogen.[14]

Minerals Council of Australia (MCA)
InfluenceMap score: E+

  • Sought to weaken the Environment Protection and Biodiversity Conservation Act,[15] including opposing the assessment of new projects’ greenhouse gas emissions;
  • Lobbied for government subsidies for fossil fuel exploration;[16]
  • Called for an amendment to Australia’s Clean Energy Finance Corporation, which would allow it to invest in coal-fired power generation,[17] coinciding with an identical proposal from Nationals Party MP Barnaby Joyce;[18]
  • Advocated for amendments to ARENA to enable it to invest in CCS;[19]
  • Published a report claiming Australian thermal coal could reduce global emissions;[20]
  • Opposed the EU’s proposed Carbon Border Adjustment Mechanism[21] and lobbied the European Commission to include fossil fuels with CCS in the EU taxonomy for sustainable activities.[22]

NSW Minerals Council (NSWMC)
InfluenceMap score: F

  • Published a report calling for the fast-tracked approval of 21 new or expanded coal mining projects, claiming they were necessary for economic recovery;[23]
  • Lobbied to overturn the rejection of a new metallurgical coal mine, despite the risks it would pose to Sydney’s drinking water catchment;[24]
  • Campaigned during the Upper Hunter by-election in NSW,[25] claiming that demand for Australia’s thermal coal would continue for “decades to come”.[26]

American Petroleum Institute (API)
InfluenceMap score: E-

  • Opposed the Biden administration’s electric vehicle policies;[27]
  • ExxonMobil lobbyists confirmed that oil majors used the API to defend “forever chemicals”;[28]
  • Lobbied against Securities and Exchange Commission rules to improve climate risk disclosure.[29]

Our company has taken action on industry association misalignment, given its suspension of its membership of the Queensland Resources Council in October 2020.[30] The record of advocacy of several of our company’s industry associations continues to be at odds with our company’s Global Climate Policy Standards, particularly the lack of support for policies to limit global warming to 1.5°C above pre-industrial levels.

Our company has had several years to affect change within its industry associations with limited success. It can and must do more to ensure that its industry associations advocate positively for climate action.

ACCR urges shareholders to vote for this proposal.

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  11. Australian Petroleum Production and Exploration Association Ltd, Financial Statements, June 2020, p7-8. ↩︎

  12. ibid. ↩︎

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