A shareholder resolution asking mining company BHP to suspend its membership of trade associations not lobbying in line with the Paris Climate Agreement won just over 22% of the votes at the company’s London AGM yesterday.
Co-filers of the resolution included Church of England Pensions Board (CEPB), MP Pension and Actiam, and backing also came from institutional investors with assets under management (AUM) of over US$10trn (€11.4trn), including AP7 and three other Swedish buffer funds, Greater Manchester Pension Fund, CalPERS, Folksam Group, AXA Investment Managers and Aberdeen Standard Investments.
However, 70% of the votes went against the resolution. The BHP board recommended voting against it, and the standard voting recommendation from proxy advisers ISS and Glass Lewis was also to oppose it.
The vote was indicative, and will not be finalised until BHP’s Sydney AGM on 7 November, when the Australian shareholder base – 58% of the total – votes on the same resolution.
The coalition of shareholders supporting the resolution had grown rapidly from a group with US$2trn assets under management at the start of this month to the US$10trn represented at the vote yesterday.
A CEPB spokesperson told IPE: “Our success in building support for our resolution clearly shows that many of the world’s leading investors are now climate conscious in a way that is truly shaping and framing the climate debate.”
He added: “The momentum of support for our resolution sends an undisputed signal to BHP’s Board that lobbying should not be used to delay, divert and disrupt the long-term interests of the company and its shareholders but for far more constructive purposes.”
In 2017, BHP’s industry review said trade bodies should cease lobbying in climate and energy policy areas where their members are not aligned. The review followed a shareholder proposal on the subject, for which 8% BHP’s UK shareholders voted.
The CEPB spokesperson said: “The vote yesterday lets BHP and its management know that the follow-through they promised in 2017 is of concern to a sizeable and powerful number of institutional investors.”
BHP has said global warming is “a challenge that requires collaboration” and that it can have a positive influence within industry associations. It is currently carrying out a new review of its industry associations, the outcome of which is to be reported later this year.
This article was amended to state that Church of England Pensions Board was a co-filer.