The world’s largest mining group, BHP (LON: BHP), announced on Monday that they will be aggressively tackling greenhouse gas emissions across the board. Specifically, the company has promised to take a lead role in tackling climate change, and the first move they made in this plan was to link executive salaries to the company’s environmental goals.
The start of the week has already seen a number of major companies make major announcements related to green energy and sustainability. While big energy companies have been flirting with the idea of exponentially increasing their renewable energy operations, BHP’s announcement is unique in that it’s the first among any major diversified mining company in the world.
“For many years performance against emissions targets has been considered in BHP’s executive remuneration plans. From next financial year [2021] we will clarify and strengthen this link and further reinforce the strategic importance of action to reduce emissions,” read a prepared statement that CEO Andrew Mackenzie will say according to The Financial Times. “To measure our stewardship of BHP’s products in 2020 we will also set public goals to address scope 3 emissions. Those who enjoy the benefits of our products should be able to so with less and less impact.”
Mining companies traditionally have not had a great reputation in terms of environmentalism. This was made especially worse in early 2019, when a major dam burst in Brazil, leading to hundreds of deaths and billions in environmental damages.
Vale (NYSE: VALE), the owner and operator of the facility, has since shut down dozens of facilities in the country amidst a sea of executive resignations and legal charges.
While environmental pressure against major mining companies has been vocal, most of the industry has remained hesitant to tackle the issue. Earlier this year, Rio Tinto rejected one proposal sent by climate activists in reducing what are referred to as “Scope 3” emissions, or all indirect emissions that occur along the value chain of the company both upstream and downstream.
Many of these companies argue that curtailing emissions that this level is far beyond their control. However, BHP has argued that they have a moral responsibility to tackle this issue since emissions at this stage are over 40 times greater than those from its mines and oilfields combined.
Shares of BHP inched up around one percent in London in response to the news. The company has been steadily rising over the past six months thanks in no small part to rising commodity prices, with the stock increasing by around 25 percent since the start of the year.
BHP Company Profile
BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and coal. A 2001 dual-listed merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole.
Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper, and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets are likely to be sold in 2018. – Warrior Trading News
