The BHP Group Ltd (ASX: BHP) share price is in the green this afternoon following the release of the company's climate transition action plan.
The plan has been released alongside notice of BHP's annual general meeting (AGM). The AGM will see shareholders voting on a movement that could see the iron ore giant re-evaluating its links with lobbyists advocating against climate targets. BHP's upcoming AGM is scheduled for 9 November.
Right now, the BHP share price is $41.76, 0.68% higher than its previous close.
Let's take a closer look at the news driving the BHP share price on Tuesday.
BHP's climate transition action plan
The BHP share price is gaining following the release of the company's climate action plan.
BHP's climate action plan for FY21 outlines the work the company has done towards becoming carbon neutral. It also outlines its plan to reduce its environmental impact in FY22 and into the future.
In FY21, BHP's assets created 16.2 million tons of carbon dioxide equivalent of scope 1 and scope 2 emissions. That's around 2% higher than those of FY20.
Scope 1 emissions come directly from a company's business, whereas scope 2 are those created to make the electricity or energy it uses.
Additionally, the company's scope 3 emissions for FY21 – those created through its value chain – totalled 402.5 million tons of carbon dioxide equivalent.
Of those, 300.5 million tonnes came from steelmaking. BHP's petroleum business saw 38.1 million tons of scope 3 carbon dioxide equivalent created in FY21.
The company reiterated its belief that decarbonising the steelmaking industry will likely be a slow and fragmented effort. BHP said some challenges steelmakers will face when trying to lessen their carbon footprint will be finding lower carbon raw material feedstock, lack of policy support, and demand for affordable steel.
However, BHP believes its products are necessities in the race to decarbonate and it plans to minimise its carbon emissions while continuing to produce needed commodities.
Short-term goals
The company's short-term goals include maintaining its operational greenhouse gas (GHG) emissions at or below its FY17 levels in FY22, while still growing its business.
The company also wants to integrate one or more Paris-aligned scenarios – including the 1.5°C pathway – into its strategy beginning in FY22.
Of course, it also plans to demerge its oil and gas assets in FY22, with Woodside Petroleum Limited (ASX: WPL) set to take over the business. The BHP share price fell 7% on the back of its demerger plan, announced in August.
Medium-term goals
In the medium term, BHP plans to reduce its operational GHG emissions by at least 30% of FY20 levels by FY30. To do so, it will support industries developing technology and pathways to reduce emissions produced in steelmaking and reduce the emissions produced from shipping BHP's products.
BHP is on track to power its Nickel West Kwinana Refinery, Mt Keith and Leinster operations, Queensland Coal mines, and its Chilean copper assets with renewable power by the middle of the decade.
Long-term goals
Then, in the long term, BHP wants to reach net-zero operational GHG emissions by 2050.
However, it recognises the challenges faced by its customers' processing of its products. BHP will continue to partner with its customers to accelerate their transition to carbon-neutral steelmaking.
The company believes the global steelmaking industry might reach net-zero emissions by 2050.
It will also work to make its future-facing commodities, such as copper, nickel, and potash carbon neutral.
BHP share price snapshot
It has been a tough few weeks on the ASX for the BHP share price, which is down 20% in the past month.
BHP shares are also down by around 3% year to date. However, they have gained around 12% over the past 12 months.
