Mood lukewarm on BHP climate change plan ahead of AGM

LONDON/MELBOURNE, Oct 14 (Reuters) – BHP Group investors look set to offer a lukewarm assessment of the miner's climate change roadmap on Thursday, due to concerns that its long-term plans to tackle its customers' greenhouse gas emissions do not go far enough.

BHP has said it is pursuing the goal of net zero emissions by 2050 for its customers, including the heavily polluting steel industry. But it has stopped short of setting a target largely due to uncertainties over how technology would develop.

The miner wants investors to endorse its climate action plan at its shareholder meeting in London on Thursday, but the response has been mixed.

Advisors Glass Lewis and the Local Authority Pension Fund Forum (LAPFF) recommended that investors vote against the plan while ISS offered qualified support.

LAPFF said it was not aligned with the global treaty on climate change adopted in Paris in 2015 "and appears to rely too heavily on carbon capture and offsetting as a means of carbon reduction". It did however commend BHP's steps to cut carbon emissions.

Glass Lewis said it "did not appear that (BHP's) emissions targets were science-based" and that the company was not specific enough around disclosures of customer emissions.

ISS recommended investors vote for the "reasonable" plan and continue to engage with the company as its targets evolve.

"Investors have been clear that they want an opportunity to have a say on our approach to climate, and we know they are seeking more information and transparency," a BHP spokesman said.

BHP said it has found support from shareholders including Climate Action 100+, the world's largest investor engagement initiative on climate change, which said it looked forward to ongoing dialogue over a plan it called "a realistic statement of the challenges faced."

BHP's Australian peer Fortescue Metals Group raised the stakes on iron ore producers this month by setting a 2040 target to achieve net zero customer emissions.

Factbox of major miner plans to cut emissions.

BHP's Australian shareholder meeting is on Nov. 11. (Reporting by Clara Denina in London and Melanie Burton in Melbourne; editing by John Stonestreet)

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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