{"id":12100,"date":"2016-11-04T16:32:51","date_gmt":"2016-11-04T20:32:51","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/bhp-billiton-unearthing-a-response-to-climate-change\/"},"modified":"2016-11-04T16:32:51","modified_gmt":"2016-11-04T20:32:51","slug":"bhp-billiton-unearthing-a-response-to-climate-change","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bhp-billiton-unearthing-a-response-to-climate-change\/","title":{"rendered":"BHP Billiton: Unearthing a response to climate change"},"content":{"rendered":"

The mining industry, in many ways, is synonymous with climate change. Mining activities by their nature, are highly environmentally invasive and energy intensive. As the world\u2019s largest mining company, BHP Billiton leads an industry that is being pushed to regulate and reduce its carbon footprint at an increasingly urgent pace.<\/p>\n

BHP Billiton operates in five commodity segments spanning six continents with an asset portfolio that reflects commodities needed for global growth [1 & 4]. These commodities and their typical application are contained in Table 1.<\/p>\n

\"table-1\"<\/a><\/p>\n

By its own design, BHP Billiton has tied its future to global economic growth<\/em> [2]. Understanding this gives insight into the way the company views the risks of climate change.<\/p>\n

Climate change \u2013 a cause for concern?<\/strong><\/p>\n

Global Growth Stagnation<\/u><\/p>\n

Research has shown global warming leads to an increased frequency and severity of extreme weather events [5]. Such events are viewed as significant inhibitors of global growth translating to lower consumption of key commodities and thus poorer future earning potential for BHP Billiton [2].<\/p>\n

Damage to property plant and equipment<\/u><\/p>\n

BHP Billiton has invested heavily in large scale infrastructure including ports, roads, processing facilities and railway lines (Exhibit 1). Both the quality and location of such infrastructure are sources of competitive advantage and extreme weather events pose a significant threat to its integrity. This risk has prompted the company to make increasingly large mitigatory investments [2].<\/p>\n

\"port-hedland\"<\/a><\/p>\n

Exhibit: BHP Billiton\u2019s Port Hedland facility in Western Australia <\/em>[1]<\/p>\n

Cost of Carbon<\/u><\/p>\n

Although no global consensus for a cost on carbon has been reached, there is widespread acknowledgement that polluters will be required to pay for their emissions in the future. Any cost is likely to be proportional to the amount of emissions generated by a company and hence, as a major producer and consumer of fossil fuels, BHP Billiton is particularly at risk [2].<\/p>\n

Digging up solutions
\n<\/strong><\/p>\n

BHP Billiton is combating climate change on three fronts [2]:<\/p>\n