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. 

Risk

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.

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