Slide 1: Social value briefing: from licence to value
Social value briefing: from licence to value
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including statements which may include: trends in commodity prices and currency exchange rates; demand for commodities; plans; strategies and objectives of management; closure or divestment of certain operat
Slide 3: Social value underpins everything we do
Social value underpins everything we do Today’s briefing follows our capital allocation briefing in November 2018 and strategic briefing in May 2019 • Our Strategy defines our portfolio focus and the culture and capabilities we require to maximise value and returns • Our Capital Allocation Framewo
Slide 4: Social value briefing: from licence to value
Social value briefing: from licence to value Geoff Healy Chief External Affairs Officer
Slide 5: We start with our purpose
We start with our purpose A strong sense of purpose drives better outcomes for all stakeholders Our new purpose To bring people and resources together to build a better world Social value briefing 8 October 2019 5
Slide 6: The materials we provide are central to modern life
The materials we provide are central to modern life We constantly evolve our approach so we can deliver them sustainably into the future Iron ore Met Copper Coal Potash Nickel Energy Our people Communities Customers and suppliers Society Investors and lenders FY2019 (US$) $4bn $2bn $15bn $9.1bn $18b
Slide 7: We take a long-term view
We take a long-term view Our commitment to regions and communities is measured in decades – local engagement is critical Average Multi-decade capital employed Employees & Regional Native title Revenue reserves per asset1 contractors towns parties2 from China 200Mt ~US$3.5 72,000 >30 19 55% Cu Eq bil
Slide 8: We have a strong record of responsible business practice
We have a strong record of responsible business practice The health and safety of our people and the wellbeing of our communities is essential Our people Communities High potential injury Safety Local spend Education >40% up to 67% 14% 341 Improvement in safety at BHP’s Of procurement spend directed
Slide 9: We have a strong record of responsible business practice
We have a strong record of responsible business practice Our focus on action, risk management and transparency across multiple issues demonstrate our commitment Environment Ethics and transparency Public targets Water Disclosure Business conduct 1990s 1% reduction from “A” rating ~40,000 We started
Slide 10: But the world is changing
But the world is changing To remain competitive we must adapt; we consider these emerging opportunities and threats in our scenario analysis Corporations are facing heightened societal expectations… Populist politics SME pressure Advocacy Communities Changing register 5x 40% 67% 21% 80% Increase in
Slide 11: Social value: licence to operate is not enough
Social value: licence to operate is not enough We are now focused on creating social value to grow shareholder value and returns Society profits when we do (Example: water management approach) What is social value • Social value is an essential precondition to shareholder Social value PHILANTHROPY S
Slide 12: Social value creation drives our competitive advantage
Social value creation drives our competitive advantage Social value protects our business today and positions us to take advantage of future opportunities Access to resource Best Obtain and retain rights to operate and expand our current asset base commodities S Be partner-of-choice to governmen
Slide 13: We are embedding social value at every level of BHP
We are embedding social value at every level of BHP We are hardwiring our approach into our structures, processes and culture • In our Charter and our Board governance Our Purpose • In our Executive Leadership Team meeting agendas Board and management • In Group targets, policies and investments • I
Slide 14: Ground-up: each asset has a social value plan
Ground-up: each asset has a social value plan Social value considerations are now embedded in asset planning cycle – drives local ownership and accountability Community dialogue 1 2 Stakeholder input Employee surveys Materiality UN Sustainable Development Goals Timing BHP Forum on Corporate En
Slide 15: Top-down: a global focus on the issues that matter most
Top-down: a global focus on the issues that matter most Our priorities reflect those areas that can make the greatest positive difference to our stakeholders and our business People Environment Community Keeping people safe at work Positioning for decarbonisation Respecting Indigenous peoples Over 7
Slide 16: Our Climate Investment Program
Our Climate Investment Program Our US$400 million CIP is targeted at reducing our operational greenhouse gas (GHG) emissions and supporting long-term demand for our products by working with customers, suppliers and other value chain participants to help them lower their GHG emissions Overview Exampl
Slide 17: Our Samarco response
Our Samarco response Committed to remediation and compensation through the Renova Foundation Overview Example investment types Challenge Rehabilitating social and environmental impacts and supporting the affected people and communities Resettlement - Bento Rodrigues Constructing more than 230 houses
Slide 18: People
People WAIO Apprenticeships Saraji Crib Relief Operations Services 203 apprenticeships Modified shift cycles to attract local Permanent employment offers for in WAIO ‘stay at home’ parents back to work traditional contract labour roles • Provides employment pathways and • Increases female representa
Slide 19: Environment
Environment Escondida water and power Sustainable shipping Port Hedland dust management Transitioning to desalinated water World's first bulk carrier tender for Dust abatement and management and renewable power LNG-fuelled transport activities within and beyond the gate • Sets industry standard in C
Slide 20: Communities
Communities Tjiwarl Land Use Agreement Social investment Local Buying Program Mutually beneficial relationship with Investing not less than one per cent Supporting regional economies and Nickel West Traditional Land Owners of pre-tax profits in communities strengthening local relationships • Underpi
Slide 21: Social value looks outward, not inward
Social value looks outward, not inward In a break with the past, we decided in 2017 to tell our story – through targeted local and national campaigns – with results BHP corporate reputation metrics: Australian favourability Favourability (%) 60 54% ↑ 50 37% 40 30 CY16 CY17 CY18 CY19 Note: All measur
Slide 22: Social value briefing: from licence to value
Social value briefing: from licence to value Our sector delivers resources essential for progress – but sometimes with significant environmental and societal impact We monitor, measure and assess these impacts and have a strong record in sustainable business practices Stakeholder expectations are ev
Slide 23: Health, safety and environment
Health, safety and environment Rob Telford Group Health, Safety and Environment Officer
Slide 24: HSE performance provides the base to create social value
HSE performance provides the base to create social value Our priorities Our FY2019 performance • Tragically, one of our colleagues suffered a fatal injury at the BHP Mitsubishi Alliance’s Saraji Mine (December 2018) Zero work- • Our investigation identified several areas for improvement – we are sha
Slide 25: Sustainability is a core Charter value
Sustainability is a core Charter value We continue to set ourselves challenging targets and strive to meet them • Further embedding Field Leadership to drive towards a more sustainable and safer operating environment • Introducing an integrated global contractor management framework that defines how
Slide 26: Our approach to water stewardship
Our approach to water stewardship Drivers Outcomes Climate Water Stewardship Position Statement: Water Our vision change Water secure world by 2030 security Water Water Stewardship Strategy: Our strategy scarcity Value, Collective Action, Risk, Technology, Disclosure Social value 2030 longer-term su
Slide 27: Climate change
Climate change Dr Fiona Wild VP, Sustainability and Climate Change
Slide 28: Our approach to climate change
Our approach to climate change Climate change is a global challenge that requires a collaborative response • Expectations of the role that industry should play in contributing to international climate commitments and delivering the transition to a lower carbon economy are increasing • Responding to
Slide 29: Climate change strategy
Climate change strategy We have an integrated approach to managing climate-related risk • Reducing operational emissions • Addressing emissions in our value chain • Adapting to the physical impacts of climate change • Evaluating resilience of our portfolio to the low carbon transition • Supporting d
Slide 30: Continuing to evolve our approach
Continuing to evolve our approach We can and will do more to address climate change • We will: – set a new, medium-term, science-based target to help bridge between our short-term target and long-term goal – set goals to address Scope 3 emissions – clarify and strengthen the link between performance
Slide 31: Climate Investment Program – Capital allocation
Climate Investment Program – Capital allocation US$400m over 5 years Scope 1 & 2 Offsets Scope 3 Applied now in Future technology Applied to support value chain Carbon offsets Future portfolio opportunity Assets optionality emissions reduction now Potential focus areas Renewable energy Electrificati
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Slide 33: Footnotes
Footnotes 1. Slide 7: Average capital employed per asset excludes non-operated mineral assets and includes non-operated conventional petroleum assets 2. Slide 7: To date, BHP has entered into native title agreements in Australia with approximately 19 native title parties. There is wide variation in
Slide 34: Ore Reserves and Competent Persons statement
Ore Reserves and Competent Persons statement Competent Person Statement The information in this presentation that relates to the FY2019 Ore Reserves as were first reported by BHP in accordance with the Australian Securities Exchange Listing Rules Chapter 5 2014 and Australasian Code for Reporting of
Slide 35: Tailings facilities in the portfolio
Tailings facilities in the portfolio1 Within the tailings facilities portfolio there are 67 operated and 9 non-operated tailings facilities Inactive includes facilities not in operational use, under reclamation, reclaimed, closed and/or in post-closure care and maintenance. Location and operational
Slide 36: Tailings facilities in the portfolio
Tailings facilities in the portfolio1 Within the tailings facilities portfolio there are 67 operated and 9 non-operated tailings facilities Classification is based on the modelled, hypothetical most significant failure mode without controls – not on the current physical stability of the dam. Locatio
Slide 37: Approach to dam risk management at BHP operations
Approach to dam risk management at BHP operations1 Maintaining dam integrity requires appropriate engineering design, quality construction, ongoing operating discipline and effective governance processes BHP’s approach to dam risk management at our operated dams is integrated into our standard appro
Slide 38: BHP Tailings taskforce
BHP Tailings taskforce Prior to Brumadinho we already had a significant focus on looking at how we could deliver a step change reduction in tailings risk. Brumadinho however has further strengthened our resolve. BHP has now established a Tailings Taskforce. • The Taskforce is particularly focused on
Slide 39: More information
More information Presentations Capital allocation briefing Strategy briefing Tailings dams briefing 21 November 2018 22 May 2019 7 and 10 June 2019 Annual Reporting Prospects BHP blog Annual Sustainability Economic Report 2019 Report 2019 Contribution (including Water Report) Report 2019 Social valu
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