Introduction

In 2015, we launched our Climate Change: Portfolio Analysis report which described our approach to portfolio evaluation and scenario planning, including the implications of a transition to a lower emissions future for our portfolio. The report has been of considerable interest to stakeholders since it was launched. One area of particular interest was how we monitor ongoing external developments and factor them into strategic planning.

This new document, Views after Paris, describes some of our observations from the past 12 months and their potential portfolio impacts. It also provides further details on some of our key climate change related assumptions and an update on recent actions we have taken related to climate change.

Views after Paris is a further demonstration of our commitment to climate change-related disclosures.

It describes:

1.  Our approach to strategic planning

The processes and tools we use to inform decision-making.

2. Our insights

The latest signals we are seeing in the external environment which indicate how the world is tracking towards a lower emissions outcome.

3. Portfolio implications

The implications these signals could have for BHP Billiton.

4. Our actions

The actions we are taking to manage climate change risk.

 

In BHP Billiton's Climate Change:

Portfolio Analysis report, released in September 2015, we described two pathways to a lower emissions world. The report highlighted that our uniquely diversified portfolio of high-quality, low-cost assets is robust under both an orderly and a more rapid transition to a global average temperature increase of less than 2°C, relative to pre-industrial levels (a ‘2°C outcome’).

Since the release of that report, a new international deal on climate change was reached at the Conference of the Parties in Paris in December 2015. We welcome the agreement and believe it provides a solid, long-term foundation for further progress. We will continue to actively advocate for a less than 2°C outcome.

 

Our position on climate change:

We accept the Intergovernmental Panel on Climate Change (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. We believe the world must pursue the twin objectives of limiting climate change to the lower end of the IPCC emission scenarios in line with current international agreements, while providing access to reliable and affordable energy to support economic development and improved living standards. We do not prioritise one of these objectives over the other – both are essential to sustainable development.

Under all current plausible scenarios, fossil fuels will continue to be a significant part of the energy mix for decades. Therefore, an acceleration of effort to drive energy efficiency, develop and deploy low emissions technology and adapt to the impacts of climate change is needed. We believe there should be a price on carbon, implemented in a way that addresses competitiveness concerns and achieves lowest cost emissions reductions.

To support this position we have an integrated climate change strategy that focuses activity across five key areas:

•  Portfolio evaluation – Testing the resilience of our portfolio and strategy.

•  Low emissions technology – Working in partnership to accelerate the development and deployment of low emissions and renewable technologies.

•  Mitigation – Reducing greenhouse gas (GHG) emissions.

•  Adaptation – Building the resilience of our operations, communities and ecosystems to climate change impacts.

•  Stakeholder engagement – Seeking to enhance the global response to climate change by engaging with investors, governments, industry and civil society.

BHP Climate Change Portfolio Analysis 2016.pdf