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2019 Industry Association Review process

BHP was one of the first multinational corporations to embark on a systemic, rigorous and comprehensive review of the climate and energy policy positions held by associations of which it is a member, relative to its own positions. In late 2017, we published a report on the positions of 21 associations against BHP’s ten core climate and energy policy positions.

Our industry association review (IAR), which identified material differences in certain policy areas with the Minerals Council of Australia (MCA), the United States Chamber of Commerce (the Chamber) and the World Coal Association (WCA), was widely acknowledged for its transparency and clearly set the standard for how other companies have approached their own reviews.

Following the review, we ended our membership of the WCA and engaged closely with the MCA and the Chamber to enhance their climate and energy policy positions. This engagement proved beneficial. The MCA (in March 2018) and the Chamber (in April 2019) issued new policy statements which endorsed the Paris Agreement.

We also seek to influence associations outside of the review process. For example, over the course of the past year, BHP has also been working with Coal21 to amend its Constitution to better reflect its purpose. That is, to invest in research and deployment of LET to reduce and remove existing and future sources of energy and industrial emissions. The Coal21 Board has unanimously agreed to amend its Constitution to reflect this purpose. Discussions are also underway in relation to the role of the CEO being an exclusively Coal21 role, with no report to the Minerals Council of Australia.

In 2019, we are undertaking our latest review of industry association positions on climate and energy policy.

We are again following a rigorous approach, including:

  • The collection and analysis of information on the positions of relevant associations. This includes both primary and secondary data gathered from a range of sources, including association websites, government review processes, news articles and social media sites;
  • We will then assess the materiality of any potential departures from BHP’s position;
  • Where we identify any material differences, we will assess the benefit that BHP receives from the broader activities of these associations, and
  • We will make a determination on BHP’s future relationship with these associations – up to and including the potential to exit, in accordance with our IAR principles.

In addition to our core approach, we are undertaking a range of enhancements to the scope and methodology of our 2019 review. These include:

  • An update of our climate and energy policy positions against which our associations will be assessed.
  • Coal21 has been added to the scope of the review for the first time.
  • The IAR has criteria to determine whether a material difference exists between BHP and our industry associations on climate and energy policy. These criteria will be broadened to include a new criterion relating to our view that industry associations impacting national or international debates should have a position of explicit support for the Paris Agreement.
  • In addition to assessing whether there are any absolute material differences between BHP and our industry associations on climate and energy policy, the IAR will also assess the overall extent of alignment between BHP and our industry associations on climate and energy policy. This will involve reaching a determination as to whether the associations are: Aligned; Partially Aligned; or Misaligned.

The outcomes of our 2019 review will be published before the end of the current calendar year.

In addition to our 2019 review, we will be implementing a number of changes to our governance processes for industry associations that have an active position on climate and energy policy. We will:

  • Strengthen ongoing oversight of industry associations through Board representation.
  • Introduce an expectation that associations will: (1) publish a statement (to be updated annually) outlining their climate and energy policy position; and (2) update BHP on steps taken in line with the policy position.

Climate change is a global challenge that requires collaboration. Resources companies such as BHP, our customers and governments must play their part to meet this challenge. Further information on our climate change strategy, including our alignment with the Paris Agreement, can be found on the climate change section of our website.

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