Our engagement
In July 2021, we met with the chair of BHP. We discussed the company’s climate scenario analysis, decarbonisation target-setting, and engagement with industry associations over their climate policy. The board’s view is that the company’s exposure to copper, nickel, and steel/iron ore holdings means it is well positioned for the shifting demand patterns associated with the low-carbon transition.
While the company has set Scope 1 and 2 carbon reduction targets, it has found it challenging to set meaningful Scope 3 (i.e. indirect emissions reduction) targets, reasoning that there is not yet a clear pathway to achieving them (although they have set targets around product shipping and procurement).
We advised there is a need for metals & mining companies to set Scope 3 targets and that this requires greater attention at the industry association level, and we strongly encouraged the company to pursue setting science-based targets, noting that many of the company’s Asia-based steel producing clients are starting to set their own targets. The chair agreed that greater client uptake of target setting would help but suggested that the public’s attention needed to shift from a focus on targets to outcomes.
We also expressed concern about the overall market-wide failure to adequately factor carbon impact into commodity prices. BHP operates with its own internal carbon price, but the chair agreed that disclosure on product carbon intensity needed to improve.
