In climate first, BHP pledges to invest $400m to reduce emissions
Mining company sets science-based targets for next year, and CEO says measures could include recycling initiatives.
BHP has become the first mining company to pledge to tackle pollution caused when customers use its products.
The metals and petroleum firm will invest $400m over five years to reduce emissions, it said on Tuesday.
The Anglo-Australian natural resources multinational is the world’s biggest listed miner and biggest coking coal producer. Combined with iron ore, also mined by BHP, coking coal is used to make steel – producing millions of tonnes of carbon dioxide and contributing to global warming.
CEO Andrew Mackenzie said BHP would develop technology to curb emissions both inside and outside the company to stem the climate crisis.
From next year onward, BHP will set a medium-term, science-based decarbonisation target, he said in a speech at an event organised by the Financial Times.
“We won’t stop at the mine gate. We will also increase our focus on Scope 3 emissions,” he said.
Emissions are divided into categories. Scope 1 and 2, respectively, cover an organisation’s direct emissions and indirect emissions generated by power that it buys to run its operations.
Scope 3 emissions occur when a company’s products are used, as in steelmaking.
Oil major Shell has also pledged to address Scope 3 emissions, but many other natural resources companies have been reluctant to confront this pressing problem.
Based in Melbourne, Australia, and London in the United Kingdom, BHP says its Scope 3 emissions are estimated to be about 40 times greater than its Scope 1 and 2 emissions.
Ambitious targets
Adam Matthews, director of ethics and engagement for the Church of England Pensions Board, a BHP investor, said the company’s position marked an important milestone.
“The key will be in the ambition of the targets they set next year, and also how this relates to the lobbying undertaken by the trade associations they fund,” Matthews said.
BHP’s closest rival, Rio Tinto, has said that Scope 3 emissions are caused by its customers, especially in China, and that it has little control over them.
In an interview, BHP’s CEO Mackenzie told the Reuters news agency that he could not yet be specific about the new investment, but that measures could include work on recycling.
Some in the industry have criticised BHP for a focus on bulk commodities, rather than minerals that are needed for electric vehicles, such as lithium and cobalt.
Mackenzie said BHP concentrates on the commodities it knows best, including copper, which has a significant role in a lower-carbon economy because of its usefulness as a conductor of electricity.
BHP owns thermal coal mines, whereas Rio Tinto has sold off its thermal coal, thereby reducing one source of Scope 3 emissions.
Mackenzie said that BHP’s thermal coal accounted for less than three percent of revenue and is low-cost, implying that it would be among the last to be closed down globally.
“We would simply be transferring the Scope 3 emissions to someone else,” he said, though he added that BHP would likely sell off its thermal coal down the road.