MAC: Mines and Communities

A climate of subversion: corporate attitudes in the run up to Paris COP21

Published by MAC on 2015-09-20
Source: Guardian, Sydney Morning Herald,

We are now months away from the allegedly crucial international climate change talks, COP21, in Paris.

It is increasingly recognised that the major extractive industry companies are playing a major role, either to supposedly support any new agreement, or - more likely given the link of fossil fuels to climate change - to undermine it.

Two mining companies - BHP Billiton and Anglo American - are among ten companies, responsible for global greenhouse gas emissions, which have
said they will back climate warming limitations at the forthcoming international conference in Paris. Notable among those which have failed to sign this pledge is the world's biggest coal mining company - India's CIL.

A group of major investors has written to major multinational companies - including Glencore & Rio Tinto - asking them to justify their membership of prominent EU trade associations accused of undermining action on climate change.

BHP Billiton and Rio Tinto are, according to a new survey, among the world's largest companies and industry groups holding back action on climate change.

As if to emphasise that BHP Billiton's coal president Mike Henry has called on the mining industry to challenge the 'anti-coal lobby'.

BP, EDF and Procter & Gamble face pressure over climate change lobbying

Investors have written to corporate members of influential EU trade lobby groups accused of undermining action on climate change

Ben Fagan-Watson, Research fellow at the Policy Studies Institute, University of Westminster

The Guardian

10 September 2015

A group of 25 investors with €61bn in assets has written to a number of multinational companies, including BP, EDF, Glencore, Johnson Matthey, Procter & Gamble, Rio Tinto, Statoil and Total asking them to justify their membership of prominent EU trade associations.

The letter, coordinated by responsible investment charity ShareAction, sets out a number of concerns about the lobbying activities of these trade groups on EU climate policy, based on research my colleagues and I carried out earlier this year. We investigated eight influential trade associations including BusinessEurope, which has argued that EU climate targets undermine industrial competitiveness, and the European Chemical Industry Council (Cefic), which has stated that strengthening the EU emissions trading system would force businesses to move overseas because of high energy costs in Europe.

BusinessEurope is feeling the pressure of being named and shamed as it relies on large companies to provide its funding either directly or through their national trade associations. It published a response describing the concerns expressed by investors as “inaccurate”, “misleading” and “biased”.

The organisation has 40 national trade associations in its membership, including the Confederation of British Industry (CBI), across 34 countries and claims to be a “leading advocate for growth and competitiveness at European level, standing up for companies across the continent”. It spent more than €4m last year on lobbying, employing 29 people, 22 of whom have access to European parliament premises.

In research published earlier this year (pdf), we examined responses to EU consultations in 2012 and 2013, and found that BusinessEurope opposed reforms designed to strengthen the EU’s emissions trading system, known as “backloading”. This was the substantive reform to the emissions trading system in the current trading period (2013-2020), designed to remove emissions permits from the system temporarily, thereby rescuing the carbon price when it crashed to under €3 per tonne in 2013. A low carbon price provides little incentive to invest in clean technologies.

BusinessEurope also argued that the EU should have just one emission reduction target for 2030 – ditching the specific targets for renewable energy and energy efficiency contained in the EU’s 2020 package. As ShareAction CEO Catherine Howarth said “these are not the positions of an organisation that supports strong and effective climate legislation”.

This is not the first time BusinessEurope has been criticised for its stance on environmental issues. After it called for the EU Commission’s 2030 climate green paper to be “totally reshaped” to place more emphasis on cost competitiveness and security of energy supplies and less on climate protection, it was accused by WWF and the European Wind Energy Association of being “short-termist”. Last year the CBI said that BusinessEurope “took a significantly less progressive stance on climate change policies than the CBI”, and many companies were said to be furious about BusinessEurope’s opposition to reforms to the EU emissions trading system.

This trading of positions for and against new policy is standard lobbying stuff. Until now getting behind these positions to understand who is lobbying who and for what has been hard, if not impossible to find. However, the launch of a new website InfluenceMap, by an NGO with the same name, next week aims to bring greater transparency and openness to the murky world of lobbying climate change policy (full disclosure: I am an unpaid adviser to the small team running the site). The site scores BusinessEurope as one of the most obstructive trade groups on climate policy, alongside, ACEA (automotive), the German chemical industry association (the VCI), Cefic (chemicals) and in last place MEDEF, the powerful French industrial federation.

BusinessEurope has signed up to several business initiatives asking policymakers to secure a global deal at the climate negotiations in Paris this year. Unfortunately, it has also been arguing that Europe should step back from bold action on climate change unless all countries and regions take action. InfluenceMap records one New York Times article where BusinessEurope argues that unless there is a global “level playing field” from a climate deal, the EU should consider revising down its 40% greenhouse has emission reduction target. This is not the bold leadership from business that Christiana Figueres, chief executive of the United Nations Framework Convention on Climate Change , has been calling for.

The tactics BusinessEurope is using are familiar: in our original report we noted that trade bodies have repeatedly raised the spectre of carbon leakage (the risk of such companies relocating to regions with laxer emissions limits), deindustrialisation and job losses in response to policies designed to mitigate climate change, arguing that energy-intensive industries should get free handouts of emission permits from European taxpayers to keep them competitive. This is despite modelling by Cambridge Econometrics showing that “far fewer sectors are at genuine risk … of relocation of production as a result of unilateral climate policy” than originally thought, as well evidenced from independent academic research.

BusinessEurope has an enormous indirect membership (through the national trade associations who are its members), and its corporate advisory support group contains many big-name companies and brands. A great many of these have explicitly recognised the dangers of runaway climate change. If BusinessEurope wants to retain credibility with both businesses and European policymakers, it needs to seriously rethink its approach to climate change policy to play a positive, constructive and sustainable role in the transition to a low-carbon future.

Ten majors back international deal to limit climate change

Environmental News Service (ENS)

7 September 2015

LONDON, UK  – Ten of the world’s largest fossil fuel producers support an international deal at this year’s UN climate conference, COP21, in Paris that will limit climate warming to 2 degrees Celsius, according to the nonprofit Carbon Disclosure Project, CDP.

Acting on behalf of investors, CDP asked companies, “Would your organization’s board of directors support an international agreement between governments on climate change, which seeks to limit global temperature rise to under 2 degrees Celsius from pre-industrial levels in line with IPCC scenarios such as RCP2.6?”

RCPs, or representative concentration pathways, as defined by the Intergovernmental Panel on Climate Change in 2014, describe four possible
climate futures, all of which are considered possible depending on how much greenhouse gases are emitted.

The RCP2.6 pathway assumes sustained net negative human greenhouse gas emissions after the year 2070. Negative emissions means that in total, humans absorb more greenhouse gases from the atmosphere than they release.

CDP put this question to 28 of the world’s largest energy firms that together account for 26 percent of all global greenhouse gas emissions.

Among the 10 energy producers to confirm their support of a global climate deal in Paris are three UK companies: Anglo American, BG Group, and BHP Billiton; as well as Italy’s Eni SpA, Russia’s Gazprom, Spain’s Repsol, Royal Dutch Shell, South Africa’s Sasol, Norway’s Statoil and France’s Total.

Despite widespread understanding that fossil fuel reserves will have to remain untapped if dangerous climate change is to be averted, CDP says that none of the 28 carbon majors queried answered “no” in response to the question.

Those energy companies that did not answer in the affirmative either left the question blank, said they had no opinion, or chose not disclose it publicly.

Absent from this analysis are Canadian Natural Resources Limited, which has indicated it will disclose at a later date, as well as Coal India, Rosneft and Marathon Oil, which have not responded to their investors’ requests for climate disclosure through CDP.

Releasing the survey results on September 2, CDP’s Executive Chairman Paul Dickinson said, “It is time for governments to listen to the business voice in support of climate progress rather than to be influenced by a minority and downgrade environmental priorities.”

“Companies are telling us, and their investors, that they welcome climate action, which brings prosperity and growth,” he said.

“Corporations, investors and governments can cooperate to ensure a successful Paris agreement that brings net zero greenhouse gas emissions well before the end of the century ensuring sustainable growth for all,” Dickinson said.

Overall, CDP put the question to more than 2,300 listed companies.

Results show that the majority of companies that have an opinion supporting a global climate deal: 805 companies answered yes, just 111 said no.

A high number of companies, 1,075, stated that they had no opinion, and 331 did not respond to the question.

Said Dickinson, “Huge opportunities to be part of the solution, build resilience and gain competitive advantage are on the table for companies right now.”

“Decarbonization is essential for the long-term sustainability of the global economy,” he said. “Businesses that commit to reduce their emissions in line with what science demands, adopt renewable energy and innovate at this critical time will reap the gains.”

The survey results come as the United Nations this week in Bonn, Germany, concluded interim negoations on a draft text of a legally-binding climate
change deal.

Countries are currently submitting their proposed contributions towards achieving this deal to the Secretariat of the UN Framework Convention on Climate Change.

Rio Tinto and Business Council of Australia among "climate hypocrites" - new survey

Sydney Morning Herald

16 September 2015

BHP Billiton, Rio Tinto and the Business Council of Australia are among the world's largest companies and industry groups holding back action on climate change, according to a new survey.

The research, based on methodology developed by the US-based Union of Concerned Scientists and applied by UK-based non-profit group InfluenceMap, found 45 per cent of the 100 biggest industrial companies were "climate hypocrites" that obstruct action on global warming.

Some 95 per cent of the delaying firms were also members of trade associations that demonstrated "the same obstructionist behaviour".

BHP Billiton was rated a "D", keeping it just outside the lower 45 per cent of companies that were ranked as "hypocrites".

"More and more, we're seeing companies rely on their trade groups to do their dirty work of lobbying against comprehensive climate policies," Gretchen Goldman, lead analyst at the Union of Concerned Scientists, said. "It is unacceptable that companies can obstruct climate action in this way without any accountability."

Google topped the list of best performers, along with Unilever and Cisco Systems, each of which received a "B" rating for their relatively positive involvement on tackling greenhouse gas emissions and backing laws that supported such action.

Unilever, which has consumer brands including Dove and Flora, gained kudos for "strongly" supporting the introduction of a carbon tax in Australia in 2012.

The Abbott government scrapped the policy two years later and newly installed Prime Minister Malcolm Turnbull indicated in his first speech after toppling Tony Abbott that he would stick to the replacement direct action policy to pay polluters to curb emissions.

BHP Billiton, which has coal and oil interests, received its "D" for having a "low level but negative engagement on climate regulation", including supporting the repeal of the carbon price.

"The company appears to be supportive of [greenhouse gas] intensive energy sources, supporting continued use of coal," the survey said.

BHP also lost marks for its membership of the International Association of Oil and Gas Producers and the Business Council of Australia (BCA), "both of which appear to be opposing climate policy", the report argued.

According to BHP's website, the company supports "a price on carbon, implemented in a way that addresses competitiveness concerns and achieves lowest cost emissions reductions".

The world has to pursue two objectives of limiting climate change to the lower end of emission scenarios "in line with current international agreements", while providing access to affordable energy "required to continue the economic growth essential for maintaining living standards and alleviating poverty," the company said.

Anglo-Australia rival Rio Tinto was ranked only an "E+" not just for its support of the carbon tax repeal but also directly advocating opposition to Australian energy efficiency standards and renewable energy targets in 2014 and 2012, respectively, the survey said.

Rio Tinto, which has coal among its operations, does not "appear to support a transition of the energy mix", the group found. Its membership of the BCA and the European Roundtable of Industrialists, also saw it marked down.

For its part, Rio Tinto said it recognised the need to adapt to the physical impacts climate change would have on its operations, including on water availability and the threat of extreme weather events.

"We believe that global energy and climate challenges are best met by companies, governments and society working together," the company said.

The BCA itself was also graded an "E+" for its "strong opposition" to the carbon tax, and mixed signals on other measures, such as emissions cuts.

"Although their [chief executive Jennifer Westacott] advocates for a transition to a low carbon economy, evidence suggests she supports greater use of coal and other measures that would maintain a high [greenhouse gas] energy mix," the report said.

BCA's official policy relegates carbon and climate issues to among its lower priorities, according to its webpage on energy and climate change.

"Energy and greenhouse gas emission reduction policies should support Australia's future economic growth and not compromise Australia's global competitiveness," the council said.

Cameron Hepburn, a professor of environmental economics at Oxford University, said the companies likely to lead on supporting climate change action were "consumer facing".

"I doubt there's a lot of altruism going on here," Professor Hepburn said in Sydney on Monday. "[They have] big brand value, there are also by and large not big energy users."

But among leading firms, there has been a marked shift in the past five years to curb emissions and support climate policies. "It's not an 'if' question, it's a 'when' question, [and] we might as well do it now."

BHP calls miners to challenge anti-coal movement

Cecilia Jamasmie

18 September 2015

Anti-coal activists seem to be winning over the public and the resources sector must fight back, BHP Billiton's coal president Mike Henry said Friday.

Speaking at the American Chamber of Commerce luncheon in Brisbane, the executive said the industry would continue to be swayed by the “no coal campaign,” which had outperformed big business with “simple messages” and an active media profile.

Henry called miners to focus on productivity and build stronger community support for the sector, as depressed prices will likely continue to plague the industry for some time to come.

“There are no signs of things getting better in the immediate term,” he said in a statement.

However, he noted the company believes the fuel will remain an important part of the world's energy mix for decades, even amid the ongoing push to cut carbon emissions.

Price slump

Coal prices have been steadily declining since 2011 due to oversupply, driving producers into the red.

Metallurgical coal, used in the making of steel, is down as much as 30% since the beginning of the year, while thermal coal, used in power generation, is as much as 15% lower.

"Poor returns, and little indication of better times on the immediate horizon, make coal a pretty challenging business at the present time," Henry noted.

In BHP Billiton’s coal business, we made a 3% return on capital in our Australian assets last year and that’s at the good end of the industry spectrum,” he added.

BHP is the world’s largest exporter of steel-making coal, digging up vast quantities of the resource in eastern Australia, in partnership with Mitsubishi Corp.

The company also produces thermal coal, which it believes will be key in meeting energy needs of a "de-carbonizing world" and the resources industry has to be active in the climate change solution, Henry said.

The executive revealed that BHP has several internal projections worked out for long-run thermal-coal demand based on a variety of influences.

“In all scenarios,” Henry said, “thermal-coal demand remains a significant part of the global energy mix for decades to come.”

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