European Climate Foundation (no url): “Ian Dunlop, a former Shell executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors, has nominated for election to the Board of resources giant BHP Billiton” “and will address the AGM in Perth on Thursday 21 November. Mr Dunlop’s platform for nomination identifies climate change as the single greatest strategic risk faced by BHPB.
As reported on ABC TV’s Lateline (12/11/13), his nomination comes as BHPB reverses its former position calling for carbon pricing, and supports the Abbot government’s plans to repeal the carbon tax and implement a discredited “direct action” policy.
Ian Dunlop said, “For business and investors, climate risk is twofold; the impacts of climate change itself, and the impact of carbon-constraints on shareholder value.
“The latest science confirms greenhouse gas emissions from fossil fuels are warming the planet at an accelerating rate. We are on track for a temperature increase of 4oC or more — a world of extreme weather disasters, sea level rise, rampant disease and social unrest, where population would fall from the current 7 billion to 1 billion. Business is not possible in a 4oC world.
“Coupled with the risk of devastating physical impacts from climate change is the potential for massive destruction of shareholder value — the imminent ‘carbon bubble’.
“Major global organisations, including the World Bank, the IMF, OECD and IEA concur that 4 degrees of warming would be catastrophic and world governments have made in principle agreements to keep carbon at alevel that will not lead to > 2oC warming. To stay below 2oC, we can burn virtually no more carbon, meaning fossil fuel assets run a realrisk of becoming stranded.
“Far more consideration needs to be given to the looming ‘carbon bubble’ at Board level, to ensure that BHPB is not exposed to undue write-downs from the loss of value of fossil-fuel assets and can prosper in a carbon-constrained world.”
….CalPERS, America’s largest public pension fund with assets of USD$261 billion, holds USD$500 million in BHPB shares. On ABC TV’s Lateline (12/11/2013), Anne Simpson of CalPERS said of Mr Dunlop’s nomination: “[Ian] has a very broad and impressive experience…and a tremendous respect and reputation, not just in Australia but internationally through the work he’s done on governance… He brings an enormous amount of skill and experience to the table.”
….Large Australian fund, Local Government Super is also voting for Mr Dunlop’s nomination. CEO Peter Lambert said on Lateline, “This is all about protecting shareholder value. We’re not here as an activist, we think shareholders are there to protect the value of investments and this is an issue that the board need to take ownership of, they can’t just delegate it down to management.”
Lateline transcript:
EMMA ALBERICI, PRESENTER: America’s biggest pension fund has criticised BHP Billiton for backing the Government’s intended repeal of the carbon price, describing the company’s apparent back flip on policy a short term fix that will contribute to a possible climate catastrophe. The criticism marks a shift in investor confidence over whether companies are doing enough to limit their financial risks. It comes as a former Shell executive seeks election to the BHP Billiton board warning the impacts of climate change could ultimately destroy the company if it’s high carbon risks aren’t strategically managed.
KERRY BREWSTER, REPORTER: The global resources giant says it’s in great shape. But a former Shell executive is telling shareholders that climate change could give BHP Billiton a life threatening whack.
IAN DUNLOP, BHP BILLITON BOARD CANDIDATE: It’s going to take a big hit. Now I don’t know when that will be exactly, but you can see it coming. There is the chance of very substantial write down of shareholder value.
KERRY BREWSTER: Ian Dunlop fronted the recent London AGM asking shareholders to vote him onto the board.
IAN DUNLOP: Climate change has to be seen not as just a second order environmental issue, it really has to be seen as absolutely fundamental to the future of the company.
KERRY BREWSTER: He’s well credentialed, decades as a Shell executive including managing director of its Australian coal subsidiaries, head of the Australian Institute of Company Directors and chair of former Prime Minister John Howard’s expert group that designed an emissions trading scheme. Now America’s biggest pension fund is backing Ian Dunlop’s election.
…..MARK FULTON, CARBON TRACKER INITIATIVE: The disruption from storms, flooding, heatwaves, that’s bad stuff. Once you get to, certainly 4 degrees and anything over that then the impacts are very substantive, very.
KERRY BREWSTER: For 7 years Mark Fulton was Deutsche Bank’s global head of climate change investment research. He says the board of BHP and other big companies need to answer a number of questions.
MARK FULTON: So what actually is your strategy? What are you doing about it? How are you going to manage your exploration? What do you think about your capital management, you know, are you going to waste money investing in new exploration? Isn’t there going to be a problem out there one day and at the end of the day you may be building stranded assets for the future.
KERRY BREWSTER: Last Friday BHP Billiton backed the Government’s intended repeal of the carbon price and while it says it takes climate change seriously, its chairman Jac Nasser has dismissed Ian Dunlop as a single issue candidate.With US $500 million in BHP Billiton shares, the influential California Public Employees Retirement System, CalPERS, is flexing muscle, saying it can’t invest in climate catastrophe.
ANNE SIMPSON: The single issue of climate change is probably the most important long term systemic risk facing the industry that BHP Billiton’s in and it’s something that is a long term systemic risk for everyone.
KERRY BREWSTER: CalPERS is one of 70 institutional investors who have asked BHP Billiton, and other corporate giants, to do more to reduce their risks.
…..EMMA ALBERICI: And Lateline asked BHP Billiton for an interview for that story but the company declined.
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