Climate change is a material governance and strategic issue for us. Our Board is actively engaged in the governance of climate change issues and our Executive Leadership Team is held to account for a range of measures, including climate-related performance.
Our Board is actively engaged in the governance of climate change issues, including our strategic approach, oversight of material risk management and performance against our targets, goals and strategies, supported by the Sustainability Committee and the Risk and Audit Committee. Below Board level, key decisions in relation to climate change are made by the CEO and management, in accordance with their delegated authority. Our Executive Leadership Team (ELT) is held to account for a range of measures, including climate-related performance, which are then cascaded through the organisation.
Board skills and experience
Board members bring experience from a range of sectors, including resources, energy, finance, technology and the public sector. The Board obtains advice from climate change experts, including by seeking the input of management (including Dr Fiona Wild, our Vice President Sustainability and Climate Change) and independent advisers. In addition, our Forum on Corporate Responsibility (which includes Don Henry, former CEO of the Australian Conservation Foundation and Changhua Wu, former Greater China Director, the Climate Group) engages with operational management teams and with the Sustainability Committee and the Board as appropriate.
This equips the Board to consider potential implications of climate change on BHP and our operational capacity, as well as to understand the nature of the debate and the international policy response as it develops. In addition, there is an ongoing focus on understanding systemic risk and the potential impacts on our portfolio.
Executive Leadership Team skills and experience
While our Board is ultimately responsible for our strategic approach to climate change issues, management has primary responsibility for the design and implementation of our climate change strategy with execution overseen by the Climate Change Steering Committee. BHP has a dedicated Climate Change team responsible for advising the ELT. The team collaborates with BHP’s asset and function teams, external partners and industry to develop practical climate change solutions, designed to preserve and unlock long-term value for BHP. It regularly prepares information and advice for the ELT, Sustainability Committee, Risk and Audit Committee and the Board on climate-related strategy, risks (both threats and opportunities) and performance against climate-related metrics. It also uses key risk indicators to help monitor performance against our appetite for climate change-related risks and monitors relevant signposts through our emerging risk process.
Executive Leadership Team remuneration
The Board strengthened the link between executive remuneration and delivery of our climate change strategy in 2020, with performance on decarbonisation and adaptation now representing 10 per cent of the Cash and Deferred Plan scorecard.
Engagement, disclosure and reporting
See Climate change engagement, disclosure and reporting for more information.