Slide 1: BHP climate change briefing news release
NEWS RELEASE Release Time IMMEDIATE Date 10 September 2020 Release Number 12/20 BHP climate change briefing BHP today provided an update on its progress on climate action, new climate commitments, and how it integrates climate change into corporate strategy and portfolio decisions. BHP’s climate cha
Slide 2: CEO Mike Henry statement
BHP Chief Executive Officer, Mike Henry, said: “I’m pleased today to show how we are accelerating our own actions and helping others to do the same in addressing climate change. We see ourselves as accountable to take action. We recognise that our investors, our people and the communities and nation
Slide 3: Further information and media contacts
Further information on BHP can be found at: bhp.com Authorised for lodgement by: Caroline Cox Group General Counsel & Company Secretary Media Relations Investor Relations Email: media.relations@bhp.com Email: investor.relations@bhp.com Australia and Asia Australia and Asia Gabrielle Notley Tara Dine
Slide 4: Building a better world: Climate change briefing
Building a better world Climate change briefing 10 September 2020
Slide 5: Disclaimer
Disclaimer BHP Climate Change Report 2020 This presentation should be read in conjunction with the BHP Climate Change Report 2020 available at bhp.com. The information in this presentation provides a concise overview of certain aspects of that Report and may omit information, analysis and assumption
Slide 6: Building a better world
Building a better world Mike Henry Chief Executive Officer
Slide 7: Accountability, expectations and value
Accountability, expectations and value We take climate change seriously and are demonstrating leadership in addressing it • Emissions are created in production, transport and use of our products Demonstrating Accountability • We have a role to play in addressing climate risk • We embrace our respons
Slide 8: Clear requirements drive better outcomes
Clear requirements drive better outcomes We hold ourselves to clear requirements in determining the actions we take on climate Actions of Clear in our Actively shaping our Substance Focus Portfolio • Contribute to actual and • Reduce emissions that we control • Protect and grow value and meaningful
Slide 9: Our purpose
Our purpose To bring people and resources together to build a better world
Slide 10: Our resources are essential to daily life
Our resources are essential to daily life Our industry must grow if the world is to decarbonise while continuing to improve living standards Cumulative demand to 2050 (Compared to prior 30 years, 1.5oC scenario1) Future facing commodities: traditional plus emerging Stainless steel, refrigerators, co
Slide 11: Leading with action
Leading with action Substantive and measurable A mid-term target to reduce operational greenhouse gas (GHG) emissions by 1 at least 30% from FY2020 levels2 by FY2030 Scope 3 actions to enable decarbonisation in our value chain • steelmaking: support industry to develop technologies and pathways capa
Slide 12: We continue to take action
We continue to take action Committed to supporting decarbonisation of our industry Collaborating to solve problems and lower emissions across our industry Renewable power contracts LNG-fuelled bulk carrier contract Carbon Capture Utilisation and Storage 100% renewable energy in Escondida Reducti
Slide 13: Strategy and capital allocation
Strategy and capital allocation Johan van Jaarsveld Chief Development Officer
Slide 14: Climate change is core to everything we do
Climate change is core to everything we do Consideration is critical to maximising value and returns • Our Strategy is to have the best commodities, the best assets and the best culture and capabilities. We incorporate climate change scenarios into our strategic choices to guide our strategic direct
Slide 15: Our portfolio is tested across a range of futures
Our portfolio is tested across a range of futures We use scenarios to consider opportunities and risks3 Value 1.5°C Scenario Decarbonisation • Swift decarbonisation of power of stationary • Rapid electrification of all end power use sectors Lower Carbon View • CCUS required for offsets and heavy ind
Slide 16: What does a 1.5 degree transition look like?
What does a 1.5 degree transition look like? Paris Agreement goals met through large-scale changes to the global energy, industrial and land-use systems Total primary energy demand3 Energy-related CO2 emissions (Btoe) (Gt CO2-e) Today 2050 20 36 Emissions (RHS) Fossil fuels in the Approximately 80%
Slide 17: Most of our commodities benefit in a decarbonising world
Most of our commodities benefit in a decarbonising world As decarbonisation accelerates the world will require more copper, nickel, potash and steel 1.5°C Scenario Central Energy View Cumulative demand in the next 30 years compared to the last 30 years Lower Carbon View (%) Oil demand outlook (%, in
Slide 18: Managing our portfolio for value, risk and returns
Managing our portfolio for value, risk and returns Climate change is embedded in our strategic decisions Best Commodities Best Assets Best Capabilities • Growth in future facing commodities; • Expandable assets, particularly in growth • Commercially minded growth capabilities; specifically copper, n
Slide 19: Amongst lowest operational emissions intensities
Amongst lowest operational emissions intensities Our operated assets are well positioned and are set to continue reducing carbon emissions PPAs in Chile will deliver significant benefits Renewable power will improve Nickel intensity Our Petroleum business is well positioned Tonnes CO2-e per tonne of
Slide 20: Disciplined assessment of decarbonisation opportunities
Disciplined assessment of decarbonisation opportunities Decarbonisation is embedded within our strategic planning, capital allocation and investment decision processes Operating Capital • Our Capital Allocation Framework enables us to align investment productivity productivity with our strategy and
Slide 21: Our Climate Investment Program supports decarbonisation
Our Climate Investment Program supports decarbonisation We are investing to accelerate low emissions technologies and support natural climate solutions US$400m Five-year Climate Investment Program (CIP) (announced in July 2019) Scope 1 & 2 Offsets Scope 3 Applied now in operated Future technology Ap
Slide 22: Managing climate risks and opportunities
Managing climate risks and opportunities Fiona Wild VP, Sustainability and Climate Change
Slide 23: Our mid-term target, aligned with the Paris Agreement
Our mid-term target, aligned with the Paris Agreement An ambitious, yet achievable pathway for our business to meet our long-term net zero goal Emissions forecast range13 Our long-term goal (kt of CO2-e) • To achieve net-zero operational emissions by 2050 18,000 Renewable power agreements14 15,000 O
Slide 24: The pathway to net zero operational emissions
The pathway to net zero operational emissions Timeframes to reduce emissions from electricity and diesel will differ, with the latter reliant on technological advancement Baseline emissions 2020 2050 Electricity Diesel displacement Other FY2020 operational 40% 40% 20% emissions Optimised timeframe f
Slide 25: Renewable electricity lowering costs and emissions
Renewable electricity lowering costs and emissions Power agreements will deliver ongoing emissions reduction and support our pathway to net zero 100% renewable energy in Escondida and Spence by mid-2020s Queensland Coal assets aim for zero power emissions by 2030 • 3 Mt CO2-e per annum reduction fro
Slide 26: Diesel displacement is being advanced on multiple fronts
Diesel displacement is being advanced on multiple fronts Transitioning from diesel to electricity can unlock value and provide flexibility for integration of emerging technologies Diesel transformation acceleration challenge (CO2-e) Options identification and Trial technology Implement and scale tec
Slide 27: Addressing Scope 3 emissions
Addressing Scope 3 emissions Supporting emission reductions across our value chains through partnership FY2021 actions 2030 goals Long-term vision Processing and use Two partnerships with customers in the Support industry to develop technologies of sold products steel-making sector and pathways
Slide 28: Partnering to address Scope 3 emissions
Partnering to address Scope 3 emissions Supporting industry decarbonisation in line with our Scope 3 goals Carbon capture utilisation and storage (CCUS) LNG shipping • The International CCS Knowledge Centre, founded by BHP and • World’s first LNG-fuelled Newcastlemax from early 2022 SaskPower, seeks
Slide 29: Strengthening the link to executive remuneration
Strengthening the link to executive remuneration Climate change is a material governance and strategic issue Executive remuneration • Reductions in operational GHG emissions 10% • Short and mid-term actions to reduce operational emissions on Cash and Deferred of the annual scorecard the pathway to n
Slide 30: Transparency and disclosure are key
Transparency and disclosure are key Our climate change strategy is supported by our commitment to transparent reporting and disclosure • We have a record of sector-leading climate-related disclosure: ISS QualityScore - top ranking TPI - one of only 8 companies to receive the top rating of 4* C
Slide 31: Conclusion
Conclusion Well positioned Clear and ambitious plans Options for substantial value Newman
Slide 32: Appendix
BHP Appendix
Slide 33: Social value drives our competitive advantage
Social value drives our competitive advantage Social value protects our business today and positions us to take advantage of future opportunities Access to resources Best Obtain and retain rights to operate and expand our current asset base commodities S Be partner-of-choice to governments and c
Slide 34: Social value scorecard
Social value scorecard We transparently track our performance on our social value commitments and we are making good progress Category Key indicators1 FY19 H1 FY20 H2 FY20 FY20 Target Fatalities 1 0 0 0 Zero work-related fatalities High Potential Injury (HPI) frequency Safety & Health 0.31 0.32 0.14
Slide 35: Climate change scenarios
Climate change scenarios Our portfolio is tested across a range of futures 1.5 degrees Lower Carbon View Central Energy View Climate Crisis A climate shock leads to turmoil and Paris Agreement goals met through Faster and deeper decarbonisation Reflects our view on the most likely massive economic c
Slide 36: Continuing to thrive in a decarbonising world
Continuing to thrive in a decarbonising world Active portfolio management will maximise upside Rolling present value7 relative to Central Energy View Central Energy View Lower Carbon View Relative value over time 1.5°C Scenario Climate Crisis Net operational emissions forecast (CO2-e) FY20 FY30 FY40
Slide 37: Portfolio of operational decarbonisation solutions
Portfolio of operational decarbonisation solutions Decarbonisation investments vary by capital intensity, value, emissions reductions and technology readiness • Broad portfolio of opportunities across our operated assets Marginal abatement9,10 US$/t CO2 • Projects are prioritised at a Group level to
Slide 38: Strong track record in reducing operational emissions
Strong track record in reducing operational emissions On track to meet our short-term target to keep our FY2022 emissions at or below FY2017 levels Our short-term target Scope 1 and 2 GHG emissions11 (millions of tonnes CO2-e) • By FY2022, maintain our operational emissions at or below 60 FY2017 lev
Slide 39: Scope 3 emissions
Scope 3 emissions We seek opportunities to partner with others across our value chain to enable the reduction of these emissions Scope 3 emissions FY2020 (Mt CO2-e)15 400 Scope 3 emissions Scope 3 emissions (high-end estimate) 300 200 100 0 Purchased goods Transportation Other 18 Iron ore Copper Met
Slide 40: Our support for natural climate solutions started in 2013
Our support for natural climate solutions started in 2013 NCS represent one of the most cost-effective, ready solutions to mitigating climate change while also providing a host of co-benefits 2013 2014 2015 2016 2017 2018 2019 2020 • Investment in • BHP is the among • Funded • Investment in the • La
Slide 41: Adaptation: managing physical climate risk
Adaptation: managing physical climate risk Our approach is to consider risks across our operations, value chain, portfolio, communities and ecosystems Acute risk: Cyclone disruption at WAIO • Adaptive management practices that allow WAIO to External supply chain respond to an expected increase in cy
Slide 42: Footnotes
Footnotes 1. Slide 7: To stay within a carbon budget that keeps global warming to no more than 1.5°C, the 1.5°C scenario requires steep global annual emissions reductions, sustained for decades. This pathway to 2050 represents a major departure from today’s global trajectory. 2. Slide 8: FY2020 base
Slide 43: Appendix footnotes
Appendix footnotes 1. Slide 31: FY2019 presented on a total operations basis, except for operational GHG emissions, fresh water withdrawals and local procurement spend. 2. Slide 31: Operational GHG emissions have been revised subsequent to the FY2019 annual report following an HSE data audit, result
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