Our engagement
Part of CA100 objectives is that companies align their climate transition plans with their public policy communication and advocacy. This includes the indirect lobbying activities that industry associations conduct on their behalf. Therefore, we engaged with BHP on two occasions to discuss how it reports this alignment, and asked questions and details about circumstances where we believed there might have been a misalignment.
During our first engagement, ahead of the release of its 2023 Industry Associations Report, we provided BHP with feedback following several months of research from Fidelity on best practice. One of our main asks was that it disclose real-time misalignment with industry associations, to limit the negative implications of lobbying from industry associations that are not consistent with BHP’s climate plan.
Previously, BHP limited misalignment reporting only on annual basis. We also encouraged the company to demonstrate with examples public policy engagement that aligns with the Paris Agreement. At the time of the engagement, BHP was very receptive to our feedback and agreed to consider it as part of its 2023 report.
Following the release of its Industry Associations Report in June, we conducted a detailed analysis and comparison versus our expectations. We also consulted with other expert think tanks such as InfluenceMap. Our general assessment of the report was that the company had endeavoured to incorporate several aspects of our recommendations, such as real-time reporting and greater detail on its methodology, as well as greater disclosure on misalignment between association policies and BHP’s climate policy approach.
Nevertheless, we were disappointed with the overall output, as we believed it focused too much on process and did not give us comfort that BHP is appropriately managing the broader impacts of its industry association memberships and how they align to its long-term strategy.
We communicated this feedback to BHP, and they understood our concerns but expressed the difficulty in assessing these issues, given that the overall impact of lobbying and advocacy is hard to measure and assess. We appreciate this challenge and we agreed to continue thinking and potentially collaborating with them on approaches they could take to ensure their direct and indirect lobbying is aligned with their long-term strategy and helping mitigate climate systemic risks.
