The world faces a critical challenge to respond effectively to the risks of climate change. These risks are clear and pressing. Every segment of society – including business, government, investors, scientists and consumers – has a role to play.
BHP recognises the role we must play in helping the world achieve its decarbonisation ambitions. Our Climate Transition Action Plan 2021 provides an overview of our role and actions.
We have laid out a comprehensive series of metrics, targets and goals. We have committed to holding management to account through a direct linkage of climate-related targets and goals to executive remuneration. And we have affirmed our commitment to advocate for public policy in pursuit of global decarbonisation. We will remain alert to technological, political and societal developments that may indicate changes to our signposts and the development of new uncertainties for our portfolio analysis. We will continue to monitor developments and review our approach as appropriate, to respond to evolving approaches to climate change and climate-related disclosures. See the Climate Transition Action Plan 2021 for more information.
A shared global challenge
We also recognise our role in collaborating with others to achieve progress in managing the challenges of climate change. We will seek opportunities to work with partners to develop and commercialise, at scale and acceptable cost, low emissions and negative emissions technologies that are critical to meet the aims of the Paris Agreement. We believe technologies including carbon capture, utilisation and storage (CCUS), direct air capture and the natural climate solutions of reforestation and afforestation have a role to play. We will continue to seek opportunities to collaborate with value chain partners, investors, researchers and governments to work towards global net zero emissions. See the Climate Transition Action Plan 2021 for more information.
Positioning for the future
Ultimately, BHP’s business is founded on providing the resources that communities and nations need to build better lives for their citizens today, and to provide the resources to support the way we will live in the future. We believe that building that future around a stable climate would mean that the potential of many of the resources we produce is maximised, their value should be higher, and the quality of life of hundreds of millions of people around the world would be better. Investing in future-facing commodities, such as copper, nickel and potash, creates great opportunities for BHP – it means our strategic goals align with our climate goals – but it also creates challenges. The world needs to increase production of commodities that support the transition and do so ever more sustainably.
Governance and oversight
Climate change is a material governance and strategic issue for BHP. The Board’s oversight of and management’s role in assessing and managing climate-related risks (threats and opportunities) are explained in this diagram.
The Board and its Committees and management regularly consider climate change-related items, including as part of discussions and decisions on performance, strategy, risk, sustainability and executive remuneration.
Achieving the aims of the Paris Agreement will require supportive policy across jurisdictions, globally. We believe BHP can best support policy development by ensuring we meet our own climate targets, goals and strategies, continuing to make the case for the economic opportunities arising from the energy transition, and focusing on those policy areas where we are likely to have the greatest ability to influence change.
We have an important role to play in helping the world achieve the aims of the Paris Agreement. Part of this involves taking concrete steps to progress towards achieving our operational and value chain GHG emissions targets and goals. It also involves engaging with governments and the other stakeholders in pursuit of policies that support a global transition to net zero.
We engage with governments on climate policy both directly through our own advocacy and indirectly through our industry association memberships. More information on our approach to direct advocacy is available here, while we detail our approach to indirect advocacy here.
BHP uses a range of formal and informal communication channels to seek to understand and take into account the views of shareholders.
Throughout the year, BHP engages with shareholders through results roadshows and other investor engagement meetings, including on key issues such as climate change, industry associations and social value. BHP also hosts live webcasts and Q&A sessions with our senior leaders for shareholders to directly ask questions of management, including on corporate governance and ESG matters, steel decarbonisation technologies, strategy, finance and operating performance.
We also facilitate and encourage shareholder participation at our Annual General Meeting (AGM). The AGM provides an update for shareholders on our performance and offers an opportunity for shareholders to ask questions and vote.
We are committed to providing transparency over our climate-related governance, risks (threats and opportunities), strategy, commitments, and targets and goals, enabled through regular and comprehensive disclosures.
Our most recent climate-related disclosures and performance data can be found in the BHP Annual Report 2023, Operating and Financial Review 6.12 - Climate change and the BHP ESG Standards and Databook 2023, and additional climate-related disclosures are available in the Sustainability downloads section at the bottom of this page.
PerformanceOur most recent climate-related performance data and disclosures can be found in our BHP Annual Report 2023, Operating and Financial Review 6.12 - Climate change and the BHP ESG Standards and Databook 2023.
BHP applies a single, Group-wide approach, known as the Risk Framework, to the identification, assessment and management of risks, including climate-related risks. We define risks to include both threats and opportunities. Our Risk Framework provides a common foundation for the management of climate-related risks together with all our risks and supports the integration of processes for identifying, assessing and managing climate-related risks into BHP’s approach to decision-making and strategy formation. This enables the relative significance of climate-related risks to be considered and addressed in the context of BHP’s overall risk profile.
We recognise climate change may influence or exacerbate risks across our risk profile, impacting issues including asset integrity, pricing of inputs, access to markets, changes to regulation and access to funding. Decisions on the prioritisation of actions to manage threats or pursue opportunities such as these are made consistent with our standard risk, planning and investment processes. Using a consistent approach allows us to consider climate-related risks across our business, integrated through our risk profile, to focus our actions on those that are material and integrate management of them into our core activities and business plans.
We recognise that the transition to a low-carbon economy and physical climate-related impacts, together with their potential significant financial, social and environmental effects, are risk factors for the Group. Climate-related risk factors are broadly categorised as:
- transition risks, which arise from existing and emerging policy, regulatory, legal, technological, market and other societal responses to the challenges posed by climate change and the transition to a low-carbon economy. We have provided more information on the management of risks associated with the transition to a low-carbon economy here.
- physical risks, which refer to acute risks that are event-driven, including increased severity and frequency of extreme weather events and chronic risks resulting from longer-term changes in climate patterns. We have provided more information on the management of these risks here.