Australian shareholders at BHP (ASX, NYSE: BHP) have voted against a plan that would have seen the global miner leave lobby groups that promote policies at odds with the goals of the Paris climate accord.
Only (AGM), which took place in Sydney on Thursday, were in favour of the resolution to cut ties with industry organizations involved in pro-coal lobbying. And just half of them backed another motion to amend the group鈥檚 constitution, which would have allowed investors to propose changes to be considered at future AGMs.
The results echo the stance taken by BHP investors in London last month, where 77.8% of the votes supported the company鈥檚 membership to groups in favour of fossil fuels.
Only 27% of votes cast at the company鈥檚 annual meeting in Sydney were in favour of cutting ties with industry organizations in favour of fossil fuels
The Australian gathering represents about 58% of all BHP shareholders, with the remaining 42% in England.
Chairman Ken MacKenzie , adding that industry groups provide many essential avenues, including a say in setting global standards and other issues not included in the failed resolution.
鈥淐limate change is a complex problem,鈥� he . 鈥淚f we are to successfully develop solutions we need to collaborate [with]鈥� Industry associations that provide a vital forum for that collaboration.鈥�
鈥淚f we see that there is misalignment between an industry association and our position, then we will act,鈥� he added, noting that the mining giant has already quit one of them 鈥� the World Coal Association 鈥� as part of an ongoing聽聽in industry groups.
Glass half full
Brynn O鈥橞rien of the Australasian Centre for Corporate Responsibility (ACCR), the activist group which drafted the resolution, said that while the motion didn鈥檛 receive the votes required to succeed, the sizeable support will heap pressure on BHP.
O鈥橞rien added that聽institutional investors had 鈥渨oken up to the impact of anti-climate lobbying鈥� and the long-term risks it posed to their portfolios.
Pressure on top companies to聽reduce or eliminate聽their exposure to fossil fuels has been mounting, and BHP has not been exempt.
In July, the miner said it was considering聽options to聽divest its thermal coal business, which include assets in Australia and Colombia.
Coal makes up for about 20% of BHP鈥檚 revenue, but the miner is targeting net zero emissions from its operations in the second half of the century
Chief financial officer, Peter Beaven, has hinted that the company is looking at alternatives to remove the fossil fuel from its portfolio 鈥減otentially sooner than expected.鈥�
The Paris Climate Accord is an agreement within the United Nations Framework Convention on climate change. It set out a global action plan to put the world on track to limiting global warming to well below 2掳C.
Coal currently makes up for about 20% of BHP鈥檚 revenue, but the miner is targeting net zero emissions from its operations in the second half of this century.
Rival Rio Tinto (ASX, LON: RIO), the world鈥檚 second largest miner,聽fully exited the coal sector聽in March 2018, with the sale of its Kestrel coal mine聽in Australia to private equity manager EMR Capital and Indonesia鈥檚 Adaro Energy for $2.25 billion.
South32 (ASX, LON, JSE:S32), which spun out of BHP in 2015, kissed coal goodbye this week with the sale of聽its South African operations to Seriti Resources and two trusts, for 100 million rand ($6.78 million) upfront.