Fiona Wild knows people don’t believe BHP is serious about taking action on climate change – she gets the letters, some of them in all capitals, accusing the global miner of not doing enough.
Wild is the executive at BHP charged with overseeing the company’s ambitious plan, announced in September, to slash emissions by 30% over the next decade and achieve net zero by 2050.
Over coffee at BHP’s Melbourne headquarters, Wild brims with enthusiasm for the mammoth task ahead. But she understands why Guardian readers – she’s one herself – might not think a company that has made a fortune from fossil fuels is serious when it says it wants to lead the charge towards a decarbonised economy.
“I completely understand why people are sceptical, because you could look at a company like BHP and say, there is a company with a large emissions footprint in terms of its operational emissions,” she says.
“The reason I work at BHP is, a company with a large footprint also has a significant opportunity to reduce it. But to make it real, you have to be able to translate what we commit to, what we say we’re meant to do, into action.”
There’s plenty to be done.
Most of the company’s profit comes from the extraordinary boom in the price of the iron ore it digs up in Western Australia’s Pilbara. But BHP – for the moment at least – still owns coalmines, including the Mt Arthur mine in New South Wales that until last year fed fuel directly into nearby power stations.
Digging up iron ore doesn’t cause an enormous amount of global heating but the process of turning it into steel uses yet more coal – including some from mines BHP plans to hang on to – and pumps vast quantities, up to 320m tonnes a year, of carbon into the atmosphere.
BHP reckons it stands to make more money if the world meets the Paris target of limiting heating to 1.5C than if it fails. Windmills aren’t made of wood, they’re made of steel, which is refined from iron ore. BHP also owns mines producing copper, needed to electrify cars, and nickel, crucial to making batteries.
The realisation that cash and climate action can align is not a conclusion BHP reached by itself – investor pressure has steadily ramped up over the past few years.
A key turning point came in July 2019, when BHP’s then chief executive, Andrew Mackenzie, said global heating was “indisputable” and fighting it would require “the biggest global mobilisation since World War II”.
“It’s going to be very, very, very hard,” Wild says.
“I’m a climate scientist by background … and getting to 1.5C is going to be a real challenge. Sometimes there isn’t an understanding in the market just how hard it is. Hoping we’re going to get there, crossing our fingers, is not enough.”
Decarbonising the steel industry
From the outside, BHP looks like it underwent a fairly sudden conversion to the cause, under significant pressure from investors impatient to see BHP get out of areas like coal that have little future if runaway global heating is to be avoided.
However, Wild insists BHP “first started thinking about how to address greenhouse gas emissions in the 1990s” – as did other fossil fuel companies concerned about their exposure to climate risk.
“We’ve had a whole series of both absolute emissions reduction targets and emissions intensity targets that we set from the 90s, all the way through to where we are today,” she says.
Wild argues three things must now happen at BHP.
“We have to reduce our emissions, we have to adapt to the impacts of climate change, and we have to be completely transparent and engage with the market, policymakers and others in what we’re doing and why we’re doing it and deliver what we say we’re going to do.”
Reducing emissions from transport is relatively easy. BHP is using gas-powered ships instead of those driven by bunker fuel – the incredibly dirty oil that powers most bulk freighters. That significantly cuts carbon.
But shipping produces just 4m tonnes a year, a tiny fraction of the 320m tonnes produced by BHP’s steel mill customers, most of whom are in China.
Decarbonising the steel industry is the main game, and Wild knows it.
Many in the industry have pinned their hopes of making carbon-neutral steel on green hydrogen, which can be made cheaply and at industrial scale from water so long as solar and wind power is abundant and inexpensive.
But BHP is keeping its mines that produce what’s known as metallurgical or coking coal, higher-quality coal that’s burned in steelmaking furnaces.
Wild denies BHP’s efforts to decarbonise the steel industry are backloaded into the later years of its plan.
“The steel sector is…