Nomination supported by California’s largest pension fund and industry leaders

Ian Dunlop, a former Shell executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors, has nominated for election to the Board of resources giant BHP Billiton, and will address the AGM in Perth on Thursday 21 November.

Mr Dunlop’s platform for nomination identifies climate change as the single greatest strategic risk faced by BHPB.  As reported on ABC TV’s Lateline (12/11/13), his nomination comes as BHPB reverses its former position calling for carbon pricing, and supports the Abbot government’s plans to repeal the carbon tax and implement a discredited “direct action” policy.

Ian Dunlop said, “For business and investors, climate risk is twofold; the impacts of climate change itself, and the impact of carbon-constraints on shareholder value.

“The latest science confirms greenhouse gas emissions from fossil fuels are warming the planet at an accelerating rate. We are on track for a temperature increase of 4oC or more — a world of extreme weather disasters, sea level rise, rampant disease and social unrest, where population would fall from the current 7 billion to 1 billion. Business is not possible in a 4oC world.

“Coupled with the risk of devastating physical impacts from climate change is the potential for massive destruction of shareholder value — the imminent ‘carbon bubble’.

“Major global organisations, including the World Bank, the IMF, OECD and IEA concur that 4 degrees of warming would be catastrophic and world governments have made in principle agreements to keep carbon at a level that will not lead to > 2oC warming. To stay below 2oC, we can burn virtually no more carbon, meaning fossil fuel assets run a real risk of becoming stranded.

“Far more consideration needs to be given to the looming ‘carbon bubble’ at Board level, to ensure that BHPB is not exposed to undue write-downs from the loss of value of fossil-fuel assets and can prosper in a carbon-constrained world.

“It is clear from discussions over the last 20 years, that conventional politics will never show leadership in taking serious action to address climate change. It is up to business to lead.”

Mr Dunlop concluded, “I am nominating to the Board of BHPB as I believe that the future prosperity and longevity of the company depends on the company’s actions now to address the fundamental strategic risk posed to the business by climate change.”

After October’s London AGM, BHPB Chair Jac Nasser reportedly withdrew his characterisation of Mr Dunlop’s candidature in the Notice of AGM as “single issue”, recognising it as erroneous.

Investors managing $3 trillion of assets recently called on the world’s largest fossil fuel companies, including BHPB, to report on their exposure to climate change risk and to prepare for a decline in demand for fossil fuels brought about by policies to mitigate climate change.

As reported on Lateline, major super funds and leading commentators on climate risk, finance and corporate governance have supported Mr Dunlop’s nomination to the BHPB Board, including America’s largest public pension fund. Quotes from these commentators are below.

There has been significant interest in Ian Dunlop’s nomination since BHPB issued its Notice of AGM including last night on Lateline and in Bloomberg Business Week.



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CalPERS, America’s largest public pension fund with assets of USD$261 billion, holds USD$500 million in BHPB shares. On ABC TV’s Lateline (12/11/2013), Anne Simpson of CalPERS said of Mr Dunlop’s nomination: “[Ian] has a very broad and impressive experience…and a tremendous respect and reputation, not just in Australia but internationally through the work he’s done on governance… He brings an enormous amount of skill and experience to the table.

“The ‘single issue’ of climate change is probably the most important long-term systemic risk facing the industry that BHPB is in and it’s also a long-term systemic risk for everyone.”

“We want BHPB to revisit their business plans and strategies to factor in scenarios on climate risk, and we want them to give back the money which is allocated to exploring for more fossil fuels which we know cannot be burnt. If they are burnt, we will likely be tipped into a climate catastrophe and there is nothing good about fiduciary duty in that setting.”

Large Australian fund, Local Government Super is also voting for Mr Dunlop’s nomination. CEO Peter Lambert said on Lateline, “This is all about protecting shareholder value.  We’re not here as an activist, we think shareholders are there to protect the value of investments and this is an issue that the board need to take ownership of, they can’t just delegate it down to management.”

Mark Fulton of sustainable business leadership group Ceres, former Head of Climate Change Investment Research at Deutsche Bank said on Lateline that BHP and other big companies need to answer a number of questions on fossil fuel assets: “What actually is your strategy? … How are you going to manage your exploration, what do you think about your capital management?  Are you going to waste money investing in new exploration … Isn’t there going to be a problem out there? At the end of the day you may be building stranded assets for the future.

“The real risk is in … the next wave of investment … to develop new fossil fuel reserves into production. That isn’t consistent with anything other than a nasty outcome for the climate.”

Thomas Clark, Professor of Corporate Governance at University of Technology, Sydney said, “Ian Dunlop is an outstanding Australian industrialist with vast experience in the resources industries.

“It is this expertise that BHP Billiton badly needs to chart a bold strategic future in a zero emissions, carbon-free world. Strategic development in new industries, technologies and processes now will reap major dividends in the future and make BHP a sustainable corporation.”//