River

Climate change

We have set targets* and a goal for reducing operational greenhouse gas (GHG) emissions (Scope 1 and Scope 2 from our operated assets): 

mining site, bridge, employees
By 2022

Our target is to continue to grow our business while maintaining our operational emissions at or below the level they were in 2017**.

mining
By 2030

Our target is to reduce our operational emissions by at least 30 per cent from the level they were in 2020**.

escondida, employees, mining, view
By 2050

Our goal is to achieve net zero operational emissions.

* All target dates refer to Financial Years, e.g. 2022 refers to FY2022. Our goal is for the 2050 calendar year.

** Reference baselines will be adjusted for any material acquisitions and divestments based on GHG emissions at the time of the transaction. Carbon offsets will be used as required.

 

image

Value chain (Scope 3) GHG emissions 

We have set goals for 2030 in relation to steelmaking and maritime, and an enhanced Scope 3 position for 2050 that reflects the challenges and opportunities for our contribution.

Our purpose, our strategy and our position and commitments on climate change provide a clear direction for our climate change strategy. Essential resources we produce are critical for continued economic growth and decarbonisation and we are committed to supplying them more safely, responsibly and efficiently. Our iron ore and metallurgical coal create the steel that goes into the infrastructure needed for growing cities around the world, including to support the energy transition. Our copper and nickel is required for electrification, such as copper-intensive electric vehicles and nickel-intensive batteries that can reduce the need for fossil fuels and support decarbonisation; and potash enables more efficient and sustainable farming, which will be increasingly important in feeding a growing global population and in meeting the world’s need to decarbonise.

Our commitments provide a pathway for action


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 BHP 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 Paris Agreement goals. 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 BHP 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 for the way we will live in the future. 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 a challenge. The world needs to increase production of commodities that support the transition and do so ever more sustainably.

 


BHP’s climate goals and targets(1)

Operational greenhouse gas (GHG) emissions (Scope 1 and Scope 2 from our operated assets)

Our commitments are:

  • a short-term target to maintain operational GHG emissions at or below FY2017 levels(2)  by FY2022, while we continue to grow our business
  • a medium-term target to reduce operational GHG emissions by at least 30 per cent from FY2020 levels(3)  by FY2030
  • a long-term goal to achieve net zero(4)  operational GHG emissions by 2050

Value chain GHG emissions (Scope 3)

For value chain (Scope 3) emissions, we have previously announced our goals for 2030 are to:

  • support industry to develop technologies and pathways capable of 30 per cent emissions intensity reduction in integrated steelmaking, with widespread adoption expected post 2030
  • support 40 per cent emissions intensity reduction of BHP-chartered shipping of our products

We are building on these medium-term goals. Our position reflects the challenges and opportunities in line with our strategy for increasing long-term portfolio exposure towards future facing commodities. Our recent proposed portfolio changes(5) are aligned with our strategic approach to manage risk and maximise value. While these decisions were not made for the purpose of setting a future Scope 3 position, upon completion, the changes would lower our total Scope 3 emissions inventory.

As we shape our portfolio for the future, we are announcing our enhanced Scope 3 position.(6)  While we cannot ensure the outcome alone, for our reshaped portfolio(7), we are pursuing the long-term goal of net zero(8)  Scope 3 GHG emissions by 2050 to support the transition that the world must make. To progress towards this goal:

  • we are targeting net zero for the operational GHG emissions of our direct suppliers and the emissions from maritime transport of our products; and
  • recognising the particular challenge of a net zero pathway for customers’ processing of our products(10), which is dependent on the development and downstream deployment of solutions and supportive policy, we cannot set a target, but will continue to partner with customers and others to accelerate the transition to carbon-neutral(11) steelmaking and other downstream processes. We will also support the value chain by pursuing carbon-neutral production of our future facing commodities, such as copper, nickel and potash to provide the essential building blocks of a net zero transition.

We have therefore set these Scope 3 targets:(12)

  • We will target net zero by 2050 for the operational GHG emissions of our direct suppliers(14), subject to the widespread availability of carbon-neutral(15) goods and services to meet our requirements.
  • We will target net zero by 2050(16) for GHG emissions from all shipping(17) of our products, (18)subject to the widespread availability of carbon-neutral solutions including low/zero-emission technology on board suitable ships and low/zero-emission marine fuels.

See the BHP Climate Transition Action Plan 2021 for more information.

 

(1) These positions are expressed using defined terms, including the following: (i) ‘Net zero’ includes the use of carbon offsets as required; (ii) ‘Target’ means an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions; and (iii) ‘Goal’ means an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions.
(2) FY2017 baseline will be adjusted for any material acquisitions and divestments based on emissions at the time of the transaction. Carbon offsets will be used as required.
(3) FY2020 baseline will be adjusted for any material acquisitions and divestments based on emissions at the time of the transaction. Carbon offsets will be used as required.
(4) Net zero includes the use of carbon offsets as required.
(5) On 17 August 2021, BHP announced it had entered into a merger commitment deed with Woodside to combine their respective oil and gas portfolios by an all-stock merger. Completion of the merger is subject to confirmatory due diligence, negotiation and execution of full form transaction documents, and satisfaction of conditions precedent including shareholder, regulatory and other approvals, and expected to occur in the second quarter of the 2022 calendar year, with an effective date of 1 July 2021. For more information, refer to the Joint Announcement ‘Woodside and BHP to create a global energy company’ by Woodside and BHP dated 17 August 2021, available at bhp.com/investor-centre. On 28 June 2021, BHP announced its agreement with Glencore to divest its 33.3 per cent interest in Cerrejón, a non-operated energy coal joint venture in Colombia, with an effective economic date of 31 December 2020. Completion is subject to the satisfaction of customary competition and regulatory requirements and expected to occur in the first half of the 2022 calendar year.
(6) This position is expressed using defined terms, including the following: (i) ‘Net zero’ includes the use of carbon offsets as required; (ii) ‘Target’ means an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions; and (iii) ‘Goal’ means an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions.
(7) Subject to completion of both of the divestment of our oil and gas business and the sale of our interest in Cerrejón.
(8) Net zero includes the use of carbon offsets as required.
(9)‘Operational GHG emissions of our direct suppliers’ means the Scope 1 and Scope 2 GHG emissions of our direct suppliers included in BHP’s Scope 3 reporting categories of purchased goods and services (including capital goods), fuel and energy related activities, business travel, and employee commuting.
(10) In line with our reporting methodology for Scope 3 GHG emissions, we define ‘processing of our products’ as emissions resulting from our customers’ processing of our products comprising iron ore and metallurgical coal (steelmaking materials) and copper (assumed to be processed into copper wire for end use).
(11) Carbon neutral includes all those GHG emissions as defined for BHP reporting purposes.
(12) These targets are referable to a FY2020 baseline year, which will be adjusted for any material acquisitions and divestments based on emissions at the time of the transaction, and to reflect progressive refinement of the Scope 3 emissions reporting methodology. The targets’ boundaries may in some cases differ from required reporting boundaries. Carbon offsets will be used as required.
(13) Net zero includes the use of carbon offsets as required.
(14) Operational GHG emissions of our direct suppliers’ means the Scope 1 and Scope 2 GHG emissions of our direct suppliers included in BHP’s Scope 3 reporting categories of purchased goods and services (including capital goods), fuel and energy related activities, business travel, and employee commuting.
(15) Carbon neutral includes all those GHG emissions as defined for BHP reporting purposes.
(16) Net zero includes the use of carbon offsets as required.
(17) BHP-chartered and third party-chartered shipping.
(17) Target excludes maritime transportation of products purchased by BHP.
(18) Carbon neutral includes all those greenhouse gas emissions as defined for BHP reporting purposes.

image

Climate change governance

Climate change is a material governance and strategic issue and is routinely on the Board agenda, including as part of strategy discussions, portfolio reviews and investment decisions, risk management oversight and monitoring, and performance against our commitments.