ESG Aus and NZ Update
/BHP shareholders demand pause on mining activities at cultural sites, announces exit from thermal coal
BHP Limited is facing shareholder demands to put a pause on any mining activity that poses a threat to Aboriginal culturally significant sites after Rio Tinto blasted the Juukan Gorge in May 2020. Several top executives at Rio Tinto have left the company in the wake of the destruction of the important site, with a shake-up happening across mining companies.
At BHP, a resolution is due to be put forward to shareholders at the AGM by shareholder activist group, The Australasian Centre for Corporate Responsibility (ACCR). The resolution is supported by Indigenous land councils and native title groups, designed to end activities that ‘disturb, destroy or desecrate’ significant sites until reviews can be carried out of state heritage legislation. Chief executive of BHP, Mike Henry, has ‘left the door open’ to backing the resolution.
BHP has also announced its intention to leave thermal coal in the past within two years, while also offloading several major coking coal assets. Coking coal is used when making steel. The company’s stake in oil and gas will also be reduced. In turn, BHP announced it will be increasing its exposure to copper and nickel, essential ingredients in renewables.
More AMP workers come forward with harassment claims
A report has emerged in the Senate that another whistleblower at AMP has come forward with allegations of harassment, with several other former employees following suit. The whistleblower, protected legally from being named, had a statement read to the Senate by Senator Deborah O’Neill.
The statement read: "My time at AMP has destroyed my life. The perpetrators, including those who swept me under the rug, have gone on to thrive."
The allegations include of multiple instances of sexual harassment at work, with explicit photos and emails, constant repositioning, including in front of large company clients, physical harassment via unwelcome touching, with formal complaints - including via external legal representation and two cases being escalated - resulting in nothing.
The whistleblower said that one perpetrator, her manager, was promoted repeatedly, and let off with a warning. The manager threatened to end the whistelblower’s career if she did not follow his sexual wishes while alone on a work trip. She managed to run away. This prompted her seeking legal advice, which was discouraged, with the case then taken over by an internal lawyer. A colleague, harassed by the same manager, left the company as a result.
These revelations come after Boe Pahari, accused of sexual harassment, was promoted to chief executive at AMP Capital. Pahari has since stood down, along with several other executives.
Cbus Climate Road Map - targets to 2030
Cbus Adanihas set some targets for tackling climate change issues within their portfolios. The new Climate Change Roadmap includes:
Reductions of 45 per cent of the absolute portfolio emissions by 2030
Net-zero emissions by 2050
Developing a stranded-assets framework to build upon work already done
Each portfolio will have its own targets for each asset class
Building upon work already done overall
Adani evicted from Wangan and Jagalingou country
The traditional owners of Wangan and Jagalingou country have upheld the eviction of Adani from the access point to the Adani Carmichael Coal Mine site, protecting the land. Adani and their contractors have had their movements restricted to and from the mine site. Adani Australia has been issued with an eviction notice by the traditional owners.
The Indigenous group says that Adani has cleared land and that the mine interferes with ancient law and custom.
A campaign has started to uphold the eviction, with Adrian Burragubba, a traditional owner, saying: “We do not acknowledge the Queensland government's illegal land grab. We do not acknowledge any sham Adani agreements that were created without the free, prior and informed consent of the Wangan and Jagalingou people.
HESTA releases a statement to companies, Working with Indigenous Communities
HESTA is calling on the mining and energy industries to apply consistent principles when engaging with Indigenous communities. Investors are concerned that risks are not being well managed, as the fallout of the Juukan Gorge Caves is revealed.
HESTA released its Statement of Working with Indigenous Communities that explains how investors expect companies to manage Indigenous heritage protection issues. Fourteen mining and energy companies have received the letter.
The program focuses on proper assessment and mitigated risks, and how these align with public statements and where accountability rests.
Debby Blakey, chief executive of HESTA, said investors were not impressed with the destruction of culturally significant sites by Rio Tinto, as priceless heritage has been lost, with costs borne by shareholders as a result. The destruction of Juukan Gorge has prompted a renewed focus on fair and sustainable outcomes for Indigenous communities and companies. Blakey said: “What occurred with Rio is a wake-up call for all investors”.
First State Super announces ‘aggressive’ climate action plan
First State Super has a new climate action plan that includes divesting from any company that derives over 10 per cent of revenue from thermal coal mining by October 2020. The companies affected include Whitehaven Coal, Stanmore Coal, New Hope, and Washington H. Soul Pattinson. Emissions targets include reductions by 30 per cent by 2023 and 45 per cent by 2030.
Government funding large-scale renewable-based hydrogen projects
There is a shortlist of companies to receive $70 million in Federal Government funding to more quickly build large-scale renewable-based hydrogen projects. The overall goal is to make hydrogen production cheaper, less than $2 per kilogram, to offer a clean alternative for transport and other heavy industrial sectors. Woodside Petroleum, BHP Group and seven other companies are on the shortlist.
Suncorp exiting oil and gas industry
Suncorp is weaning itself off financing and insuring oil and gas projects, with the ultimate goal being to divest entirely by 2025. The group currently has a ban on supporting new thermal coal projects and has already stopped insuring, underwriting or directly investing in new oil and gas projects, with the phase-out complete by 2025. All direct investing in the oil and gas sector will end by 2040.
BNP Paribas launches new green index for institutional investors
A new green index is in the pipeline, aimed at Australian institutional investors, launching at BNP Paribas. The Australian Climate Transition Index (ACT Index) will be used as a return benchmark for a new green bond launching at the same time, the BNP Paribas Green Bond.
The ACT Index is the result of a two-year collaboration between ISS ESG Australia, Monash University’s NGO ClimateWorks, and BNP, with help from Monash’s Centre for Quantitative Finance and Investment Strategies. The ACT Index finds companies likely to perform well in the future economy.
Companies fall into three main categories: enablers, adapters, and least affected.
Solar undercutting coal, may result in early closure of coal power plants
Early closures are possible for some of Australia’s coal-fired power plants as solar energy fulfils daytime demands for energy. The ageing fleet of coal plants will be retired at some point, with them being kept on to maintain energy security as replacements are implemented over time. Many plants are becoming uneconomic to keep running, with very tight margins.
Wind and solar capacity is flattening electricity prices in some parts of the network, sometimes many times less than the plant’s coal costs. Coronavirus restrictions have dampened prices too. A quarter of all Australian households has solar panels, with capacity still able to jump by 500 per cent.
