[Bhpbilliton] BHP Billiton details carbon strategies and results - released yesterday

[holly creenaune]

BHP Billiton details carbon strategies and
results<http://www.cedaily.com.au/nl06_news_selected.php?act=2&nav=1&selkey=46482&utm_source=instant+email&utm_medium=email&utm_campaign=Instant+Email+Article+Link>
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
report<http://www.bhpbilliton.com/home/aboutus/sustainability/reports/Documents/2011/BHPBillitonSustainabilityReport2011_Interactive.pdf>and
its annual
report<http://www.bhpbilliton.com/home/investors/reports/Documents/2011/2011AnnualReport.pdf>,
while on the same day the Carbon Disclosure
Project<https://www.cdproject.net/en-US/Pages/HomePage.aspx>made
publicly
available <https://www.cdproject.net/en-US/Results/Pages/responses.aspx> 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)<http://www.bhpbilliton.com/home/aboutus/sustainability/reports/Documents/2011/BHPBillitonSustainabilityReport2011_Interactive.pdf>

Annual report 2011 (BHP Billiton, September
2011)<http://www.bhpbilliton.com/home/investors/reports/Documents/2011/2011AnnualReport.pdf>
*
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