23 october 2014

Climate activists warn BHP Billiton shareholders of coal's profit risk

A former chairman of the Australian Coal Association will tell the resource company’s AGM climate change could destroy profits

Guardian staff, Thursday 23 October 2014

Shareholders in BHP Billiton risk seeing the value of their investment destroyed by climate change, a former chairman of the Australian Coal Association will warn on Thursday.

As Australia’s biggest mining company faces a slew of protests at its annual general meeting in London, Ian Dunlop will tell shareholders that the value of coal assets in particular could drop very quickly.

“The opportunity for value destruction is enormous,” Dunlop said before the meeting. “BHP are ahead of much of the industry but that is not saying much as the rest are all in denial. The phase out of coal will be much more rapid than they expect.”

Dunlop is seeking election to the BHP board. “BHP look at it as advanced, incremental change from business as usual, but they have to look at it as a paradigm shift.”

Analysts at Carbon Tracker argue that international action to combat global warming will leave at least two-thirds of known coal, oil and gas unburnable and valueless.

It was reported on Thursday that the amount of coal being burned by China – the world’s biggest user of coal – had fallen for the first time this century, according to a Greenpeace analysis of official statistics.

BHP Billiton is recommending shareholders vote against Dunlop, stating he lacks the “overall skills and experience profile required”. Dunlop’s attempt to join the board in 2013 was opposed by 96% of shareholders.

“We accept the IPCC assessment of climate change science, which has found that warming of the climate is unequivocal, the human influence is clear and physical impacts are unavoidable,” said the BHP spokesman, citing the company’s recent sustainability report.

“Energy coal makes up 25% of the energy mix and in many regions is the source of affordable energy that offers security of supply. This is likely to remain the case for some time.”

Last week Australia’s prime minister, Tony Abbott, tried to bolster the case for coal, saying it was “good for humanity” and should not be “demonised”.

BHP’s AGM will also be targeted by the fast-growing campaign to persuade investors to dump fossil fuel stocks with protests expected on Thursday over the company’s $10m association with University College London (UCL) and the effects of its activities around the world.

The fossil fuel divestment campaign began in the US, where cities, churches and universities have shed their stocks, and has spread rapidly to 50 universities in Britain, with Glasgow the first breakthrough. This week protesters have targeted UK banks, which have provided £66bn ($120bn) of funding for fossil fuel extraction.

Protesters designated last Saturday as “national day of divestment” in an effort to persuade investors to drop fossil fuel stocks and also shares in banks that invest in such companies.

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