Is BHP missing the boat on climate change?

One aspiring board member believes the miner needs expertise in the area.

Ryan Newman (TMFNewmy)

Ryan Newman (CFA) is the Director of Research of The Motley Fool Australia, and Portfolio Manager for the Pro and North Star services. Ryan’s interest in investing and stocks began at a young. His journey with The Motley Fool started first as a member but when the company first came to Australia he joined the team as one of our writers. Recognising his investing talent and passion, it wasn’t long before he was approached to join the investing team as a research analyst on Pro. Ryan is passionate about learning and continual development. He earned his Chartered Financial Analyst (CFA) designation in 2022, and has completed his Bachelor of Accounting and his Graduate Certificate of Corporate Finance. Ryan loves spending time with his young family as well as non-fiction reading, catching the latest movies and following his sports team, the St Kilda Saints (AFL).

Published October 21, 2013 7:20 am AEDT

The BHP Billiton (ASX: BHP) board and proxy advisor CGI Glass Lewis have both dismissed Ian Dunlop's bid for election at the miner's annual general meeting in London, suggesting that he would add no value to the board and is too focused on a single issue.

The former Australian Coal Association chairman believes that the issue of climate change should be elevated to the top of the company's agenda, stating that it is one of the biggest "strategic risks" facing the miner. Although he recognises that BHP already maintains a focus on the issue, he does not believe it is acting fast enough nor has the proper expertise to navigate through the complex issues.

Whilst Dunlop believes that "we have to leave fossil fuels in the ground", part of his approach would be to assess whether the company should remain involved in certain operations, which could include resources such as coal, oil and gas or iron ore to name a few.

A spokeswoman for the miner reaffirmed the company's stance on health, safety and the environment, and highlighted that 12 of the 13 board members are "highly skilled and experienced" in these areas. A "Sustainability Committee" has also been established to review such risks.

Foolish takeaway

Despite strong resilience in commodity prices in recent months, the mining industry is still facing significant volatility and headwinds, and any bad news could see shares fall sharply. As such, it may be wise to add companies such as BHP, Fortescue (ASX: FMG) or Rio Tinto (ASX: RIO) to your watchlist and wait for a more attractive entry point.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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