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BHP shareholders unlikely to break ties with coal lobby groups

Image: BHP Billiton

BHP shareholders have voted against a plan that would see the mining giant cut its memberships of industry organisations that do not support the goals of the Paris Agreement.

Only 27 per cent of its Australian and London shareholders were in support of BHP cutting ties with industry associations involved in pro-coal lobbying.

Further, only 15 per cent have backed the motion to amend BHP’s constitution, which would have allowed investors to propose changes at future AGMs.

These poll results were finalised at BHP’s annual general meetings (AGM) in Sydney on Thursday and in London last month.

“The environmental challenges we face today are complex, and demand concerted and collective action,” BHP chief executive Andrew Mackenzie, speaking at the AGM, said.

BHP has ceased membership of the World Coal Association in April last year due to differing views on managing climate change concerns.

The company stated there was “material difference identified” in its industry association review, and citing “the narrow range of activities of benefit to BHP from membership.”

While admitting there was “no one simple silver bullet” to solve the issue of climate change, Mackenzie said the risks involved with the crisis could be “existential”, requiring a holistic approach from the mining giant.

“We can collaborate with (our customers) and suppliers, and other partners, to drive actions that reduce greenhouse gas emissions from the major uses of our products throughout our value chain,” Mackenzie said.

BHP has recently ramped up its sustainability efforts with a five-year, $US400 million ($579 million) climate investment program aimed at reducing emissions from its operations and those generated from the use of its resources.

Climate change is also one of the key factors for BHP when it identifies suitable suppliers, according to BHP’s group procurement officer Sundeep Singh when speaking at IMARC in Melbourne.

BHP’s supply chain spans 60 countries and 10,000 partners, with an annual spend of $US20 billion across its operational expenditure and capital expenditure in the 2019 financial year.

“The supply chain, as the name suggests, is only as strong as its weakest link,” Singh said.

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