BHP shares in buy zone post its green action plan?

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BHP shares in buy zone post its green action plan?

 BHP shares in buy zone post its green action plan?
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Highlights 

  • BHP has released its Climate Transition Action Plan 2021.

  • The plan aligns with its long-term goal of net zero Scope 3 GHG emissions by 2050.

  • By supporting low-carbon technology solutions, BHP aims to thrive in a low-carbon world by reducing emissions.

World-leading resources company BHP has released its Climate Transition Action Plan 2021 which outlines the refurbished approach of the company for the reduction of greenhouse gas (GHG) emissions and the management of risks associated with climate change across its global value chain. 

According to BHP’s CEO Mike Henry, this plan will support the world in achieving its decarbonisation ambitions and will reduce the operational emissions to net zero by 2050, while working with customers and suppliers in the value chain. He added that the plan represents the decades-long commitment of the company to mitigate the negative impact of climate change by setting operational emissions targets, analysing the scenario of a transition to a 1.5 oC world, and moving towards technologies, products and services that support the decarbonisation process. By supporting low-carbon technology solutions, BHP aims to thrive in a low-carbon world by reducing emissions from its current products and offering new products which align with a net zero future.

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Key elements of the Climate Transition Action Plan

The first key element is an update on the performance of BHP against the commitments set out in its Climate Change Report 2020.

The second key element is capital alignment, which is basically how BHP allocates its capital to align itself with its climate goals and strategies.

The third key element is just transition which considers the life of asset planning in comparison with the climate and broader economic and technology changes while taking transition impacts into consideration.

The fourth key element is Climate policy principles which are the principles that support the views of the company on government and policy action to meet the goals of the Paris Agreement. It also includes the measures that the company has taken to build up its approach to industry associations, which includes a full review of material member associations to be conducted by it, with the next update due in 2022.

Lastly, the company is striving for the long-term goal of net zero Scope 3 GHG emissions by 2050. The last key element, Enhanced value chain (Scope 3) position, is explained below.

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BHP’s progress

Net zero by 2050 will be targeted by BHP for the operational GHG emissions of its direct suppliers which would be subjected to the extensive accessibility of carbon neutral goods and services to meet the needs of BHP. The Scope 1 and Scope 2 emissions of the direct suppliers are included in BHP’s relevant Scope 3 reporting categories. Net zero emissions will be targeted from all shipping of BHP’s products, subject to solutions like low/zero-emission technology in suitable ships and low/zero-emission marine fuels.

The rapid transition of the company to carbon neutral steelmaking and other downstream processes will be achieved by collaborating with customers and others. Carbon neutral production for future commodities, including copper, nickel and potash, will be pursued by the company to support its value chain and deliver the crucial building blocks of a net zero transition.

Stock performance

With a significant market capitalisation of £42,790.57 million, the company is listed on the London Stock Exchange and is also a constituent of the FTSE 100 index. Its Earnings per share is 1.57 and its 1-year return is 15.35%. BHP PLC’s shares were trading at GBX 2024.50 at 9 AM, down by 0.17%, on 15 September 2021.

Summing up

The short-term goal of BHP is to grow and expand its business while maintaining its total operational emissions at or below 2017 levels by 2022. Meanwhile, its medium-term goal is to target the minimisation of its operational emissions by at least 30% from 2020 levels by 2030, with the long-term goal to reduce the operational emissions to net zero by 2050.

A month back, BHP had declared that it would shift its main listing from London to Sydney by 2022 in a bid to unite its dual-corporate structure. This huge decision to delist was taken by the company as its new deal to exit the oil and gas market was revealed.

The mining giant is planning to do so by selling its petroleum business to Australia’s Woodside Petroleum, and the shares it will get in exchange will be distributed among its investors. The investors should watch out before investing.

ALSO READ: Did UK ‘manipulate’ climate pledge for Australian trade deal?

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