BHP Sets up $400mn Climate Fund

Global resources group BHP has set up a five-year, $400mn Climate Investment Program to develop technologies to reduce emissions from its own operations as well as those generated from the use of its resources, it said July 23.

BHP CEO Andrew Mackenzie said: “Over the next five years this program will scale up low carbon technologies critical to the decarbonisation of our operations. It will drive investment in nature-based solutions and encourage further collective action on scope three emissions.”

He said BHP had to "take a product stewardship role for emissions across our value chain and commit to work with shippers, processors and users of our products to reduce scope three emissions.”

Other measures announced include a medium-term, science-based target for scope one and two emissions in line with the Paris Agreement on top of its short-term goal of capping 202 emissions at 2017 levels and net-zero carbon emissions by 2050.

Mackenzie concluded: “We require a considered and orderly transition to a lower carbon world, in which resource companies like BHP have both critical expertise and a key role to play.” 

A number of investment funds are pulling out of oil and gas companies since they fear their business model is outdated unless they cut carbon emissions. But few other classes of shares give such strong returns, so the divestment so far has been cautious and limited.

Scope 1 emissions are direct emissions from owned or controlled sources; Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company and Scope 3 includes all other indirect emissions that occur in a company’s value chain.