From hollycreenaune at gmail.com Wed Sep 21 20:20:06 2011 From: hollycreenaune at gmail.com (holly creenaune) Date: Thu, 22 Sep 2011 13:20:06 +1000 Subject: [Bhpbilliton] BHP Billiton details carbon strategies and results - released yesterday Message-ID: BHP Billiton details carbon strategies and results 22 September 2011 12:14pm Carbon and Environment Daily (Australia) In three new reports, BHP Billiton discusses reputational risk and climate change, details its carbon performance and describes how McKinsey & Co has contributed to its carbon policy thinking. BHPB yesterday released its sustainability reportand its annual report, while on the same day the Carbon Disclosure Projectmade publicly available the company's 2011 CDP response (*free registration with CDP required for access *). Reputational risk a concern with investorsIn its CDP response, BHPB says it has identified additional climate change risk concerns "in litigation and reputation, trade and market and technology ownership areas". "The number and scope of regulatory programs governing our operations are increasing, and ? regulatory standards and community expectations are constantly evolving and generally becoming more rigorous," it says. "As a result, on top of compliance costs, we may be exposed to increased litigation and unforeseen environmental expenses, despite our best efforts to work with governments, community groups and scientists to keep pace with regulations, law and public expectation. "These litigation exposures also have reputational risk implications," it acknowledges. "Because our portfolio does not include consumer products, there is a minimal risk that a negative public reputation for climate change efforts could affect sales volume," it says. "However, BHP Billiton could face reputational risks with Socially Responsible investors if our performance and policy commitments fall short of expectations for a leading resources company." The company also notes "longer-term" trade and market share risks for its oil and coal. "On the other hand, BHBP's gas and uranium businesses may benefit from increased demand in a carbon-constrained world." Messaging and advocacyThe report says that, in 2010, McKinsey & Co updated previous work for the company to identify "plausible scenarios for climate change regulation in the countries that matter to BHBP" and likely impacts on the company's operations. BHBP used that work to develop "a set of messages and advocacy priorities" for its discussions with the Australian Government and others. The McKinsey project also delivered a "global financial impact model" that projects the annual carbon costs to 2030 for various divisions and assets and generated a "more refined" carbon price protocol that BHBP uses to make capital investment decisions, evaluate abatement technologies and forecast commodity prices. Major-emitting assets required to prepare abatement cost curvesBHBP requires all assets that emit more than 1 million tonnes of CO2 annually to prepare a emissions reduction cost curve that identifies abatement projects and describes cost, lead-time and implementation options. They must also maintain an energy mass balance, an emissions baseline and a five-years emissions forecast. The company incorporates a carbon price into analyses for evaluating projects with a capital value of more than US$100 million and/or emissions over 100,000 tonnes a year. Induction training for new non-executive directors includes development sessions on topics such as climate change and their individual development plans cover environmental, social and governance issues as well as other business matters. Representatives of BHBP commodity divisions, known as customer sector groups, have also participated in emissions trading workshops. Greenhouse target exceededThe company's greenhouse intensity index is tracking at 18% below the 2005-06 base year, and its carbon-based energy intensity index is tracking at 17% below. "This was primarily driven by the agreement to use hydroelectric power at the Mozal aluminium smelter, in Mozambique, which now provides more than 98% of the smelter's electricity needs," says its annual report. Achievements in Australia include a reduction in emissions of 1,258 tonnes a year as a result of a project by TEMCO manganese to recover alloy from launder sands at its Tasmanian smelter. The company has made good progress in efforts to boost the proportion of recycled water it uses, according to its sustainability report. It has recorded an 8% improvement since 2006-07 in the ratio of recycled water to high-quality water consumed, well on the way to meeting the mid-2012 target of a 10% improvement. Current environment targets are due to expire in 2011-12 and the company is currently developing its next set of five-year targets. KPIs for senior executives will be created as part of these targets. *Our future: Sustainability report 2011 (BHP Billiton, September 2011) Annual report 2011 (BHP Billiton, September 2011) * -------------- next part -------------- An HTML attachment was scrubbed... URL: