We have discussed ESG issues with mining group BHP Billiton on a regular basis for more than 10 years. Our discussions have ranged from board diversity, HIV and AIDS to bribery and corruption. Climate change has been a constant theme, and this is an issue where we believe our influence has made a real difference. In 2010, the company adopted a greenhouse gas (GHG) emissions reduction target of 6% per unit of production by 2012. We did not believe this was sufficiently demanding and made our views known to management. Schroders seeks ‘absolute’ targets for GHG emissions, consistent with the aim of the Intergovernmental Panel on Climate Change. We therefore welcomed the company’s announcement in 2013 that it was adopting an absolute GHG target to keep emissions at 2006 levels.

While we celebrate this success, we are aware that the bar is constantly being raised; the company’s risk profile is altering, expectations of corporate behaviour rise and the regulatory environment is more stringent. We will continue to press the company to make further progress. We know that maintaining BHP’s position as one of the global leaders in a particularly environmentally-sensitive sector helps make it a better investment for our clients.