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BHP decides to quit World Coal Association

Diversified miner BHP (LN:BLT) has made a preliminary decision to leave the World Coal Association due to conflicting views on climate change.
BHP decides to quit World Coal Association BHP decides to quit World Coal Association BHP decides to quit World Coal Association BHP decides to quit World Coal Association BHP decides to quit World Coal Association

BHP will decide in March whether it will quit the World Coal Association for good

It said it had made the decision "in light of the identified difference and the narrower activities of benefit to BHP from membership".

BHP said it would inform the WCA and invite its response before making a final decision at the end of March.

The WCA chairman Mick Buffier responded, saying the association was disappointed at the outcome of the review, which it felt did not accurately reflect its views.

"The WCA has always supported a balanced approach that integrates climate and energy policy; working towards a low emission future for coal," he said.

Buffier added that the WCA hoped to be able to continue working with BHP on this basis in the future.

BHP's decision came after it reviewed its membership of industry associations, looking at the material differences between its position on climate and energy policy and the advocacy positions on climate and energy policy taken by the relevant associations.

According to SP Angel, the review was due to concerns from investors over membership of associations or groups that criticise the Paris climate accord and reject targets to increase use of renewable energy sources.

Of the 21 associations assessed as holding an active position on climate and energy policy, three were identified as having a number of material differences. These included the WCA, the Minerals Council of Australia and the United States Chamber of Commerce.

BHP decided to remain a member of the MCA, as it provides a high level of benefit, although the miner does plan to formally communicate the identified material differences and will again review its membership within a year if there has been no change.

It will also decide whether to withdraw from the US Chamber of Commerce on March 31 after it formally communicates the identified material differences to the board, seeks additional information and considers its future membership.

BHP chief external affairs officer Geoff Healy said the review clearly set out the company's principles for its ongoing participation in industry bodies.

"While we won't always agree with our industry associations, we will continue to call out material differences where they exist and we will take action where necessary, as we have done today," he said.

Investec said it wondered if BHP was "starting to show signs of following a similar path to Rio Tinto and look toward exiting coal altogether".

BHP is the world's largest exporter of coking coal, but has largely moved away from thermal coal mining.

The company is targeting net zero emissions from its operations in the second half of this century.

SP Angel said BHP had cut emissions by around 61% over the six years to 2016, but remained among the world's top emitters, with 21% revenue coming from coal operations.

The bank said the moves were positive for climate change, but cited Australian Coal Association former president Ian Dunlop in saying progress had been slow and coal-producing companies had to step up phase outs for the world to meet the Paris climate targets.

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