Industry associations play an important enabling role for business and the broader community. Depending on their size and purpose, they can facilitate information sharing and relationship building, provide a forum for stakeholders to collaborate on addressing common and complex problems, and allow industry to have a collective voice in public policy debates.
Just as we do to ourselves, we hold the industry associations of which we are a member to high standards. We expect them to act with integrity, be constructive in their engagements with stakeholders, and reflect the views and positions of their members as a whole.
Why we join industry associations
We will join, and remain members of, an industry association if we believe the association can provide one or more of the following benefits to BHP:
- Advocating for a policy and regulatory landscape that supports member companies – associations can pursue this outcome through a range of means, including by lodging submissions, appearing before inquiries, meeting with officials, commissioning research, issuing media releases, responding to media queries, and commissioning advertising.
- Developing and maintaining standards on issues of importance to our business.
- Facilitating improvements in our own practice – associations can contribute to this outcome by enabling the sharing of best practice, publishing data to strengthen decision-making, hosting events to bolster member company initiatives, and using their convening power to bring together different stakeholder groups.
The table below outlines some recent examples of how our association memberships have generated benefits for BHP.
Over the past three years, the Consejo Minero has played a key role in representing the interests of the mining sector in the ongoing discussions on proposed new royalty arrangements for copper and constitutional reform in Chile. This included helping establish the Compromiso Minero (‘Mining Commitment’) – a network of over 100 local organisations, suppliers, associations, NGOs and academics that have provided a broader voice on the importance of mining to Chile. The Mining Association of Canada developed and maintains the Towards Sustainable Mining (TSM) standard. TSM is a globally recognised sustainability program that supports mining companies in managing key environmental and social risks. The Chamber of Minerals and Energy of Western Australia has played a critical role in lifting understanding and practices across the resource sector in Western Australia in relation to preventing sexual harassment.
Our governance arrangements
It is a requirement under BHP’s mandatory minimum performance requirements for external engagement that approvals are required before joining an industry association. As part of the approvals process, each prospective association is subject to due diligence and compliance checks and a review of policy alignment. We also consider whether our membership of the association is necessary, relative to our existing memberships and the proposed membership fee. The approval process is renewed every two years.
The Board has oversight of BHP’s climate related lobbying approach. Senior management oversees the day to day implementation of climate change lobbying policies and practices.
In line with BHP’s prior practice, our 2023 industry association review report was approved by the BHP Board. Our 2023 industry association review was overseen by the Chief Legal, Governance and External Affairs Officer. Detailed work was led by Group Corporate Affairs, with the assistance of our ESG, Group Governance and Sustainability and Climate Change teams. We commissioned an external party (KPMG) to collect publicly available information on the associations’ advocacy (e.g., from association websites, government consultation processes, news reports and social media).
Additional information on our 2023 industry association review is below.
Our industry association memberships
BHP is a member of many industry associations around the world. These associations tend to serve one of the following four purposes:
- General – the association seeks to advance the interests of the general business community in a particular jurisdiction.
- Sector-specific – the association seeks to advance the interests of a specific sector or a specific commodity.
- Issue-specific – the association seeks to address a specific issue or technical challenge.
- Bilateral/local – the association seeks to facilitate information-sharing and relationship-building between different countries or within a local community.
We also differentiate between our material and other association memberships. We consider an industry association to be ‘material’ if it meets at least one of the following two criteria:
- our base annual membership fee is equal to or greater than US$100,000; and/or
- there is significant stakeholder interest in the climate policy advocacy of the association (as determined by whether the association is listed on InfluenceMap’s ranking of industry associations).
For our most recent list of the industry associations of which we are a member, categorised by materiality, purpose and location, please click here.
Alignment on climate policy
BHP supports the aims of the Paris Agreement to limit the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the increase to 1.5°C. The world must work toward these aims with increased levels of national and global ambition to limit the impacts of climate change.
We have an important role to play in helping the world achieve the aims of the Paris Agreement. Part of this involves taking concrete steps to progress towards achieving our operational and value chain greenhouse gas (GHG) emissions targets and goals. It also involves engaging with governments and other stakeholders in pursuit of policies that support a global transition to net zero.
We engage with governments on climate policy both directly through our own advocacy and indirectly through the advocacy of our industry association memberships. Further information on our approach to direct advocacy is available here, while our approach to indirect advocacy can be accessed using the menu to the right.
We published our updated global Climate Policy Principles in May 2023, which continue to apply globally across BHP’s operational jurisdictions. BHP commits to conducting all our advocacy efforts consistent with our global Climate Policy Principles and to use the Principles to direct the advocacy of the industry associations of which we are a member.
Our approach to indirect advocacy
Our approach to indirect advocacy on climate policy comprises four main elements:
- We clearly communicate to industry associations (via our global Climate Policy Principles) our views on how governments can best pursue the aims of the Paris Agreement.
- We use our positions on industry association boards, committees and working groups to seek to influence the climate policy advocacy of the relevant associations.
- We monitor in real time the advocacy of our material association memberships – to give us the best opportunity to address any potential misalignments as soon as they occur.
- We regularly review the climate policy advocacy of our material association memberships against our global Climate Policy Principles and publish the findings of these reviews on our website (see below for more detail).
Our industry association review process
Our industry association reviews provide us a structured and transparent means of assessing the climate policy advocacy of our material association memberships and acting on potential areas of misalignment.
We published our first industry association review in 2017. We repeated this process (with some modification) in 2018 and 2019. In 2020, as part of a broader suite of changes, we shifted our industry association review process from an annual to a three-yearly cycle.
Following recent engagement with investors and other stakeholders, we have decided to increase the frequency of our industry association reviews to every two years. In the intervening years, we will publish an update on the progress we have made in addressing areas of misalignment from the prior year review and any relevant findings from our real time monitoring.
2023 industry association review
We deferred the release of our 2023 industry association review to engage with investors on possible improvements we could make to our general approach. Further information on the outcomes of this investor engagement can be found in the Engaging with investors section below.
Our report outlines the findings and outcomes of the 2023 industry association review. We made two main enhancements to our review methodology for this report:
- We refreshed how we assess advocacy alignment. In previous reviews, we focused primarily on determining whether the association’s advocacy was ‘materially different’ to BHP’s advocacy. For this review, we have shifted from a binary focus to assessing advocacy alignment along a continuum (alignment, some non-material misalignment, and material misalignment).
- We have expanded our disclosures. In previous reviews, we only provided information on association advocacy that was found to be materially different to our own. For this review, we have sought to provide a comprehensive overview of the climate policy advocacy of our material association memberships (taking into account both their ‘top-line’ statements and day-to-day advocacy).
- We supplemented our normal data collection process by drawing on the advocacy examples provided by InfluenceMap in their ranking of industry associations (where such examples are of direct relevance to the mining sector).
We will publish an update on the progress we have made in addressing areas of misalignment identified from our 2023 industry association review ahead of our 2024 Annual General Meeting.
Previous industry association review reports
The findings and outcomes of our 2019 and 2017 industry association reviews can be accessed via the links below:
Addressing potential misalignment
Where we identify potential misalignment, we take steps in line with our principles for participating in industry associations. Our preference is to engage with the relevant association and seek a change in its advocacy. We have had success in the past in changing the advocacy of our material association memberships through this type of engagement. For example:
- Our 2017 industry association review identified a material difference with the US Chamber of Commerce over its opposition to carbon pricing. Through engagement by BHP and prominent American companies, the US Chamber shifted its position to ultimately express support for carbon pricing1.
- Our 2019 industry association review identified a material difference with the Mining Association of Canada (MAC) due to the association not having an articulated position on the Paris Agreement. Following discussions with BHP, the MAC Board approved an update to the association’s position on climate change2, which provided explicit support for the Paris Agreement and its aims.
- BHP formally adopted the goal of achieving net zero operational GHG emissions by 2050 in FY2020. Through our engagement on the Mineral Council of Australia’s Energy and Climate Change Committee and Board, we (along with other member companies) successfully encouraged the association to adopt a similar ambition for the minerals industry in October 20213.
If we are unable to convince an association to change its advocacy to address any material misalignment, we will consider a range of steps, including:
- publicising that the material misalignment exists;
- imposing conditions on our membership (such as requesting that the association communicate that its advocacy relating to the identified area of material misalignment does not represent the views of BHP); and/or
- suspending or ceasing our membership of the association. If we suspend our membership of an association, this will involve withdrawing BHP funding and participation from the association, subject to any contractual, legal or otherwise binding membership requirements.
Our 'real time' disclosure
BHP recognises the importance of communicating in a timely manner when we disagree with the public position taken by an organisation of which we are a member. The sections below detail our most recent ‘real time’ disclosures for industry associations and other organisations.
We have no ‘real time’ disclosures to make regarding our industry association memberships at this time.
Low Emission Technology Australia (LETA)
LETA (previously known as Coal21) is an industry-funded body tasked with identifying, researching and developing low emissions technologies (LETs).
In June 2023, LETA launched a digital media campaign aimed at raising awareness of the organisation’s activities and the LETs on which it is focused. LETA believes such communication is necessary to build stakeholder support to enable approval and delivery of their key projects.
Our general position is that the activities of an organisation of which we are a member should be aligned with the core purpose of the organisation. We thus believe the activities of LETA should effectively and efficiently advance its purpose of identifying, researching and developing LETs. In our view, this means that the communicational role of LETA should be limited to highlighting specific projects and their technical progress, and that broader campaigns aimed at building awareness of LETs would be more appropriately pursued by other bodies whose purpose is to advocate on climate and energy matters.
We have shared our views on this issue directly with the LETA Board.
Engaging with investors
Our process for engagement with shareholders and stakeholdersBHP has an annual calendar of shareholder and stakeholder engagement. Throughout the year, BHP engages with investors and stakeholders including through results roadshows and other investor engagement meetings and on key issues such as climate change, industry associations and social value. BHP also hosts live webcasts and Q&A sessions with our senior leaders for shareholders to directly ask questions of management, including on corporate governance and ESG matters, steel decarbonisation technologies, strategy, finance and operating performance.
Our recent engagements
During engagement prior to our 2022 Annual General Meeting, a number of investors expressed an interest in having discussions with BHP on our industry association review process and possible improvements we could make.
Based on this feedback, we decided to defer the release of our industry association review (which we had originally intended to publish in December 2022) until we had the opportunity to hear from investors and consider their views on our approach.
In February 2023, we hosted a range of discussions with investors and other stakeholders. In all, we spoke to over 50 investors (located in Australia, Asia, Europe and North America) and civil society groups including the Australasian Centre for Corporate Responsibility (ACCR) and InfluenceMap.
Feedback and actions
During these discussions, stakeholders generally expressed appreciation for the enhancements we had already made to our industry association review methodology (which we discuss here). Beyond this, three key pieces of feedback were raised.
First, while investors were cognisant of the effort spent by companies like BHP in conducting industry associations reviews, they nonetheless felt our three-year review cycle was insufficient from a disclosure perspective. Reflecting on this feedback, we have decided to increase the frequency of our industry association reviews to every two years. In the intervening years, we will publish an update on the progress we have made in addressing areas of misalignment from the prior year review and any relevant findings from our real time monitoring.
Second, investors emphasised the importance of companies disclosing not only the climate policy advocacy of their industry associations, but also their own direct advocacy. In line with this expectation, we have enhanced our disclosure on BHP’s climate policy advocacy. Further information on our approach to direct advocacy is available here.
Lastly, investors indicated they would value more information on BHP’s governance of industry associations, particularly in terms of how we seek to influence the climate policy advocacy of industry associations (and the steps we take when we identify misalignment), together with the benefits we get from being members of industry associations. We have expanded our disclosure on these matters, which can be found in the Our approach to industry associations section above.
We thank all stakeholders who shared their perspectives during our recent consultation process.