Australian global mining giant BHP Billiton’s CEO Andrew Mackenzie has denied the resources company is burying its head in the sand regarding the risk climate change poses to its profitability.
At the company’s Annual General Meeting in the British capital, London, board candidate Ian Dunlop said climate change had the ability to “completely turn the company on its head or indeed destroy it”.
AAP Newsagency reports the former Australian Coal Association chairman turned environmental campaigner argued the current board was “ill-equipped to deal with this challenge”.
However, Mr Mackenzie, addressing his first AGM as chief executive after replacing Marius Kloppers earlier this year, rejected the criticism.
“We can, and will, continue to adjust the shape of our portfolio to match energy demand, meet society’s expectations, preserve the progressive base dividend and maximise shareholder returns,” Mr Mackenzie told shareholders.
He told AAP after the meeting BHP wasn’t investing in thermal coal, even though it stayed in the portfolio, with the focus being to “maximise returns with what we’ve got”.
The Scottish businessman said over the next two years BHP expected to increase overall resources production by eight per cent annually.
Over the next 15 years global commodity demand was expected to grow by up to 75 per cent driven by China’s rise, Mr Mackenzie said.
The current board has urged shareholders to vote against Mr Dunlop and the former Shell executive admits he’ll struggle to get elected.
AAP reports Mr Dunlop is worried BHP isn’t doing enough to prepare for a low-carbon future.
The world was on track for a four degrees Celsius temperature rise that would reduce the population from seven billion to just one billion, the 71-year-old told shareholders.
“It’s basically a world where business is not possible in the normal sense.”
AAP reports Mr Dunlop said to meet the United Nations target of a two degrees Celsius rise in global temperatures companies had to stop investing in fossil fuels and withdraw from existing projects.
That meant there was indeed a “carbon bubble” of coal that should never be burnt, he said.
“Essentially the result of that is going to be substantial write-downs and stranded assets.
“Politics is not going to deliver on climate change it’s going to be up to business and its own self-interest to actually do it.”
Votes from the AGM will be added to those cast in Perth in November before a result on Mr Dunlop’s bid is announced.
Company chairman Jac Nasser earlier insisted BHP Billiton fully recognised the “strategic nature of this issue”.
However, he admitted previously describing climate change as a “single issue” wasn’t a good look and didn’t fully recognise its importance.
