The reason

Fidelity’s managed funds have a substantial combined position in the company. We meet with company representatives regularly in the context of our active management and analysis. 

The outcome

Following our discussions earlier in the year, during Q4 we took the decision to abstain on BHP’s climate transition plan, which the board submitted to a shareholder vote at the AGM. While we assessed the company as having made substantial progress on its climate disclosures, governance, and target setting during the past several years, we did not believe that its Scope 3 emissions reduction targets were ambitious enough to merit support, particularly since the company envisaged providing shareholders with a vote on its climate plan only once every three years. At the AGM, we supported a shareholder resolution asking the board to report on how its capital allocation to various types of fossil fuel assets will align with a 2050 net zero emissions scenario. Following the vote, we have been engaging with the company and other iron ore miners to see how they can play a bigger role in the reduction of their Scope 3 emissions, including exploring practical solutions whereby Scope 3 target setting could become fully controllable. These efforts are ongoing. We also hosted a call with BHP in December 2021 to discuss the issues surrounding the diesel fuel rebates scheme in Australia. We highlighted the pressure we were seeing from activists, superannuation funds, and industry groups on this issue, and encouraged the company to move proactively with other major miners to address this emerging risk to their social license to operate. These are ongoing conversations, which we will continue to report on as they evolve