The Church of England Pensions Board (CEPB) and Denmark’s MP Pension have co-filed a shareholder resolution with the world’s largest mining company BHP, calling for it to suspend its membership of industry associations whose lobbying activities are not in line with the goals of the Paris Climate Agreement.
The resolution was filed by The Australasian Centre for Corporate Responsibility (ACCR), with Australian pension fund Vision Super as lead co-filer. Between them, the co-filers have AUD140bn (€86bn) under management. Participants also include Dutch asset manager Actiam and Australian investment company Grok Ventures.
The resolution recommended that BHP (formerly BHP Billiton) “suspend memberships of industry associations” whose major functions were to “undertake lobbying, advertising and/or advocacy relating to climate and/or energy policy” and whose record demonstrated “inconsistency” with the 2015 Paris Agreement.
The ACCR said the resolution represented the “next generation” of shareholder proposals to companies about adverse-climate lobbying, moving beyond conventional calls for a review of industry association advocacy to a recommendation that memberships of industry associations be suspended.
It said: “BHP’s funding of pro-fossil fuels lobbying has been a subject of increasing frustration for investors, who are concerned about further delays to the implementation of Paris-aligned policy.”
According to the ACCR, the inconsistency between BHP’s climate-aware positioning and the oppositional advocacy of its industry associations was especially acute in Australia.
The CEPB and Sweden’s AP7 pension fund are currently leading a dedicated engagement programme to address corporate climate lobbying, and lobbying by trade associations, to ensure alignment with the Paris Agreement.
Adam Matthews, director of ethics and engagement at CEPB, said: “BHP [has] shown leadership on climate by supporting the Paris Agreement and announcing their intention to set targets to address emissions from how people use their products.”
He continued: “However, industry associations, funded by BHP, are continuing to lobby against the long-term interests of the company and its shareholders. We are keen the company takes appropriate action to address this, given the climate emergency we collectively face.”
Jeanne Martin, senior campaigns officer at pressure group ShareAction, which has previously co-ordinated similar shareholder engagement with BHP, said: “Investors have today upped the bar for what should be expected of companies that stand in the way of ambitious climate action – either directly or via their trade associations.”
Martin added: “Their unprecedented resolution sends a strong message to the Australian lobby powerhouse that investors do not want to see them continue to obstruct climate legislation and skew the climate debate.”
She concluded that the BHP resolution should “act as a warning sign to mining giants” and members of similar trade associations that “investors will not tolerate further obstruction of the implementation of sensible climate policy and will not shy away from escalating their engagement with companies”.
BHP’s London AGM is on 17 October 2019, with the Sydney AGM on 7 November.