Media release
Active ownership delivers outcomes: BHP improves scope 3 disclosures & investors withdraw resolution
Major institutional investors representing nearly US$110 billion of assets under management have withdrawn a shareholder resolution filed with BHP Group Limited (BHP), following improved disclosures in the company’s 2024 Climate Transition Action Plan (CTAP).
The resolution requested the company provide additional disclosures about its forward plans and investments for Scope 3 emissions reductions from the steel value chain. BHP’s Scope 3 emissions, dominated by the processing of its iron ore and metallurgical coal into steel, account for 97% of its total emissions footprint.
The resolution was co-filed by Denmark's largest pension fund, PFA Pension Fund, and Vision Super, along with the Australasian Centre for Corporate Responsibility (ACCR). It sought enhanced transparency so shareholders can better assess how the company is addressing reducing its Scope 3 emissions in the steel value chain and positioning as the global demand shifts towards green steel.
- BHP’s 2024 CTAP improves disclosures on steel decarbonisation investment, providing clear insight into its forward financial allocation over the next five years to support steelmaking greenhouse gas emissions intensity reductions.
- The company also discloses a prioritisation framework for its steel decarbonisation plan.
- Co-filers look forward to ongoing engagement with the company towards further clarity on BHP’s plans for achieving net zero Scope 3 steelmaking emissions by 2050.
Rasmus Bessing, co-CIO and head of ESG investments at PFA, said:
“That the mining sector plays a crucial part in the transition towards a low carbon economy is an indisputable fact. Therefore, we are pleased that our continuous dialogue with BHP has led to additional progress in advancing its decarbonization efforts, both in terms of transparency to investors and strategic direction.
“Much can still be done, and we look forward to our future dialogues.”
Michael Wyrsch, Chief Investment Officer & Deputy CEO, Vision Super, said:
“BHP is a leader in the mining sector – and they’ve come a long way since 2019 with a strategy that better fits the world we are moving to.
“The company is also more frank about its plans and the challenges it faces. BHP has heard and addressed the concerns about long-term shareholder value that led us to co-sponsor the resolution, and as a result the resolution has been withdrawn. It’s a clear demonstration of the effectiveness of engagement with companies addressing the need to decarbonise the economy. However, 2023 was a record year for greenhouse gas emissions and atmospheric carbon now stands at more than 423 ppm. We all need to do better and quickly.”
Commenting on the resolution, Naomi Hogan, Company Strategy Lead, ACCR, said:
“BHP has clearly heard that investors want greater insights into how it is tackling the critical issue of steel decarbonisation and has taken an important step forward.
“Addressing the Scope 3 emissions from the processing of its iron ore offers BHP the most significant opportunity to reduce its climate impact and associated transition risks.
“ACCR welcomes the greater transparency from BHP on its forward steel decarbonisation investment, yet we are concerned by the lack of ambition it has revealed. A US$75 million direct spend over five years on steel decarbonisation is difficult to reconcile with the huge scale of the challenge posed by steelmaking emissions, which account for 81% of BHP's total emissions, and we would like to see greater ambition.
“The disclosure provided by BHP on its planned investment in steel decarbonisation is vitally important because it allows shareholders to better assess how the company is positioning for the green steel transformation - it demonstrates once again, that engagement with escalation is key to effective stewardship outcomes.
“There is momentum in the mining sector towards recognising that clear plans for reducing Scope 3 emissions in the steelmaking value chain are critical for ensuring a strong position as global demand shifts towards green steel."