BHP to invest $400mn to address climate change
BHP has announced a five-year, $400m Climate Investment Program to develop technologies to reduce emissions from its own operations as well as those generated from the use of its resources.
Commenting on BHP’s move, Viktor Tanevski, Principal Analyst at Wood Mackenzie, says: ‘A key driver of its climate investment programme will see BHP assess its portfolio of products in 2020 and set goals to address Scope 3 emissions*. In 2018, BHP set a target to cap FY2022 Scope 1 and 2 emissions at 2017 levels. The 23 July announcement builds on this, but does not clearly quantify reductions.’
BHP’s pledge follows an earlier commitment by Glencore in February 2019 to also commence reporting on longer-term projections for the intensity reduction of Scope 3 emissions from 2020.
Tanevski notes: ‘BHP’s announcement to set Scope 3 emissions goals is in contrast to Rio Tinto. In May, Rio Tinto shareholders followed a board recommendation to vote down a resolution to introduce transition planning disclosure on targets for Scope 3 emissions. Rio Tinto’s justification for not setting hard targets was that it has a lack of control over Scope 3 emissions, which lie in the hands of its customers. However, Rio Tinto has already completed its exit from coal, while BHP and Glencore still retain large thermal coal operations.’
*The GHG Protocol Corporate Standard classifies a company’s greenhouse gas (GHG) emissions into three ‘scopes’. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.