10 October 2016
BHP Billiton today released Views after Paris, providing an update on how the Company identifies, assesses and manages climate risk.
Addressing investors in London, VP Sustainability and Climate Change Fiona Wild said the new document built on the work of BHP Billiton’s 2015 Portfolio Analysis and gave further insight into the Company’s views on a global transition to a lower emissions future.
“Views after Paris details some of our observations from the past 12 months such as the continuing transition to low emissions power generation and the emerging alignment of climate change policy, as exemplified by the recent commitment by the EU to approve the Paris accord and pave the way for ratification.”
“The Report also provides further details on some of our key climate change related assumptions and an update on recent actions we have taken related to climate change.”
Dr Wild said the Company tests the resilience of its portfolio and investment decisions against a range of plausible future scenarios and uses a number of tools including external signals tracking.
“We identify and monitor signals in the external environment, which help us assess how the world might be tracking in a potential transition to lower emissions.”
A key focus of the document is recent global policy developments and changes in global energy markets.
“While signals seem to support the development of globally coordinated climate change policy, political developments in individual countries may affect the scale and pace of alignment,” Dr Wild said.
Views after Paris also looks at the rise of low emissions power generation and potential impacts to the Company across a number of scenarios.
“Renewables will play an increasing role in the global energy mix. Wind and solar power generation capacity has increased nearly 50 fold since 2000. This has helped reduce wind power costs by 50 per cent and decreased the cost of solar panels by nearly 90 per cent,” Dr Wild said.
“Our view on the likely rate of renewables growth is at the higher end of major benchmarks. However, it is likely to take at least a decade for renewable energy to become competitive with incumbent technologies in the world’s three largest energy markets. Gas, nuclear and coal are likely to remain the lowest cost sources of energy in the US, China and India respectively for some time.
“Considering the new signals and analysis, we retested our portfolio and strategy. In a scenario where the world achieves an orderly transition to a 2oC world, our diverse portfolio remains resilient because of its high quality, low cost assets.”
Dr Wild said the release of the document demonstrates BHP Billiton’s commitment to climate change-related disclosure.”
“When we launched our Climate Change: Portfolio Analysis a little over 12 months ago, we were very encouraged by the response from industry, investors and the NGO community and with the release of Views after Paris have responded to their requests for more information.”
Commenting on the release of Views after Paris, Stewardship Director - Climate Change CCLA, Helen Wildsmith said "The multi-decade low carbon transition requires investors and companies to pay greater attention to portfolio resilience. I applaud BHP Billiton for their ongoing analysis summarised in today's report, but also for helping develop disclosure frameworks that allow financial regulators to assess and mitigate systemic climate-related risks."