Investor turns up heat on BHP over climate lobbying


One of BHP’s biggest investors has warned the company must pull out of industry lobbying groups or face damage to its reputation on climate change.

Aberdeen Standard Investments said it was throwing its weight behind a shareholder motion that would force BHP to suspend membership of lobby groups that work against the goals of the Paris Agreement on climate change.

“Failure to implement effective governance of its industry group lobbying activities serves to undermine the integrity of BHP’s climate leadership position and causes damage to its reputation,” said the investor’s stewardship director Bill Hartnett. Its clients own 3.2% of BHP’s shares.

The Church of England said on Wednesday that asset managers holding more than £2.1 trillion in assets had backed the shareholder resolution on lobbying. They include Calpers, Actiam and Axa Investment Managers.

“Corporate funding of lobbying, fuelled with shareholder funds, is continuing at pace,” said Adam Matthews, head of ethics and engagement at the Church of England Pensions Board.

The company failed to deliver on promises made in 2017 that trade bodies should stop lobbying on issues where their members were not aligned, Matthews said.

However, proxy advisory group Institutional Shareholder Services (ISS) recommended shareholders vote against the resolution as BHP is holding a review of group membership which is set to report before the end of the year. Glass Lewis, another adviser, said shareholders should vote against.

“Taking this into account, support for the shareholder proposal is not considered warranted at this time. It is however noted that the company’s progress and practices in this area will be kept under review,” ISS said.

As the resolution was filed in September, BHP said its “climate change strategy focuses on reducing its operational greenhouse gas emissions, investing in low emissions technologies, promoting product stewardship, managing climate-related risk and opportunity, and working with others to enhance the global policy and market response”.

Investors have been heaping more pressure on companies to align with the goals in the Paris climate agreement from 2015.

Earlier this year, London-listed oil giant BP said it would publish more information on its emissions and how it would tackle them after shareholders spoke up.