BHP has set an emission reduction target for its operations that takes safety risks that could arise from severe weather events and changes in climate patterns into account.
The company underlined in its climate change report 2020 that it was operating in zones prone to extreme weather events and were therefore exposed to potential disruptions.
Potential risks include adverse impacts to employees’ health and safety and company assets, as well as disruptions to the supply chains, transport and distribution networks.
As such, BHP pledged to reduce emissions from its operations by 30 per cent by 2030.
“We assess our risk of exposure to potential climate change impacts to be material, including the potential for more frequent and intense weather events, and increasing sea water levels that may result in disruptions (e.g. to port operations),” BHP stated.
“Left unmanaged, physical climate change risks may threaten our sustainable long-term shareholder return objectives.”
BHP chief executive Mike Henry said climate change action made good economic sense for the company and enabled it to create further value.
“To create long-term value and returns over generations, we must continue to generate value and returns within the strong portfolio we have today, while shaping our portfolio over time to benefit from the megatrends playing out in the world including decarbonisation and electrification,” he said.
“Our portfolio is well positioned to support the transition to a lower carbon world aligned with the Paris Agreement.”
BHP has introduced LNG-fuelled ships into the company’s maritime supply chain, which the company stated could virtually eliminate air emissions and significantly reduce greenhouse gas emissions.
This follows a world-first tender last year for lower emissions and LNG-fuelled bulk carrier vessels for its transportation of iron ore.
It is expected to lead to lower emissions of up to 34 per cent on a per voyage basis when compared with conventional vessels.
Further, BHP has pledged $US400 million ($549 million) to its climate investment program in emissions reduction projects across its assets and value chain over a period of five years.