The United Nations Sustainable Development Goals (UNSDGs) aim to create a better, fairer and more sustainable world by 2030. The 17 SDGs address the global challenges society faces, including those related to poverty, inequality, climate change, conservation and economic growth. We can contribute to these broader goals through working in partnership with many different stakeholders, from global to local.

We recognise our business activities can create negative impacts and, therefore, sustainability must be integral to how we do business. The interconnectedness of the SDGs means that a positive contribution to one can have a multiplier effect, so we work to understand the linkages, manage and mitigate any adverse impacts, and determine how we can make a positive contribution to those most relevant to our business and social value priorities.

We contribute towards the achievement of the SDGs through:

 

Our work on inclusion and diversity. Refer to our Inclusion and diversity section for information on our approach and how we are tracking against our aspirational goal for a gender-balanced employee workforce by the end of FY2025. (SDGs 5 and 8).	Our focus on water stewardship. Refer to our Water section for information on our approach to water management. (SDG 6).	Our work on marine and terrestrial biodiversity. Refer to our Biodiversity and land section for information on our approach to biodiversity. (SDGs 14 and 15).
The taxes and royalties we pay to host governments, the direct and indirect employment opportunities we create and our supply chain. Refer to the Economic Contribution Report  for more information. (SDG 8)	Our voluntary social investment. Refer to our Social investment section for information on our social investment strategy and framework. (SDGs 3, 4 and11).	Our commitment to the aims of the Paris Agreement and action to reduce our operational emissions help to address emissions in our value chain, build resilience and enhance the global response to climate change. Refer to our Value chain sustainability section for information on our approach to value chain sustainability and our Climate change section for our approach to climate change. (SDG 13).

This approach allows us to work in partnerships with others to achieve mutually beneficial outcomes. (SDG17).

We recognise that changes in our business, ranging from the opening to the closing of a mine, can have significant, and sometimes disproportionate, effects on communities where we operate. We also recognise that these same communities are navigating broader shifts in the global economy, such as the energy transition and digital disruption, and that the scope and nature of these transitions will continue to evolve.

We are committed to working with communities we are a part of in periods of change and transition to achieve long-term mutual value.

Our approach will be grounded in our existing strategies, policies and frameworks in relation to our people, the environment, communities and other stakeholders and partners. The interconnection of these policies and frameworks¹ aims to ensure change and transitions are equitable and deliberately considered across the life cycle of our business and for the communities where we operate. 

Our approach to equitable change and transitions will:

• Recognise our responsibility to our workforce – where a major change in our business is expected to affect our workforce, we will engage in meaningful dialogue and support those impacted.
• Create opportunity for meaningful engagement and co-designed processes – we will seek to develop relationships with stakeholders and partners, including government, local businesses, community members, suppliers, Indigenous peoples and workers, that support understanding of the issues and co-creation of solutions. We will communicate transparently on the types of changes the business needs to make and enable active participation of those most impacted.
• Recognise the impacts associated with gender, land connectedness and social and economic vulnerability – we will not assume all people are affected similarly. We will seek to understand how impacts may be differently experienced, including for Indigenous peoples, and recognise that plans and solutions must take into account the particular strengths of each community and tackle the unique impacts they experience. 
• Recognise that the economic, social and environmental dimensions of sustainable development are inter-related – we will aim to avoid or mitigate adverse environmental impacts of change and transitions, while pursuing opportunities to build climate resilience and environmentally sustainable communities.

Given change and transitions will involve multiple actors, we will seek to be a catalyst to bring people together and use our relationships to advocate for equitable change and transitions in line with the above principles.

¹ These include our Indigenous Peoples Framework, Social Value Framework, Inclusion and Diversity Statement, Climate Change Strategy, approach to the environment, Closure Strategy, Human Rights Policy Statement, and approach to community engagement.

We set clear direction through our social value framework and we embed and measure sustainability performance through our public sustainability targets and goals. We completed our most recent five-year sustainability targets in FY2022.

We completed our most recent five-year sustainability targets in FY2022. Highlights include three years fatality-free, a reduction in the total number of workers exposed to our most material occupational exposures by 68 per cent, a 15 per cent decrease in operational greenhouse gas (GHG) emissions from our adjusted FY2017 baseline, social investment of US$681.9 million over five years and a 29 per cent reduction in freshwater withdrawal volumes from our adjusted FY2017 baseline.

The FY2017 baselines and FY2018 - FY2022 data for our occupational exposures, GHG emissions and withdrawal of freshwater have been adjusted for the merger of our Petroleum business with Woodside and divestment of our interest in BHP Mitsui Coal (BMC) in FY2022 (to exclude data related to those operations), together with adjustments made and reported in previous years to ensure ongoing comparability of performance.  FY2022 data for safety, social investment and significant community and environmental events includes the operated assets in our Petroleum business up to the date of the merger (1 June 2022) and BMC up to the date of completion of the sale (3 May 2022).

Each year we identify the sustainability issues most material to our business and stakeholders by assessing the economic, social, environmental and cultural impact of our activities and business relationships.

In FY2022, we adopted the approach of the Global Reporting Initiative (GRI 3: Material Topics 2021) to consider actual and potential negative and positive impacts of our business in order to determine our material sustainability issues for reporting. In doing so we considered BHP’s material risk profile¹, information recorded in our internal event management system, our social value framework and social investment priorities and a number of other sources. 

BHP has been conducting sustainability materiality assessments for many years and has a well-developed understanding of our organisation’s context. We are actively involved in sector-specific initiatives such as the International Council on Mining and Metals (ICMM) and regularly engage with our stakeholders as described in the Our stakeholders section below. Our activities and portfolio are described in the What we do section.

¹ ‘Material’ in  this context refers to the materiality of a risk under BHP’s Risk Framework. For information on our Risk Framework refer to the BHP Operating and Financial Review 9 – How we manage risk. 

Identification of negative impacts

We use BHP’s event management system to identify actual negative impacts. This system is designed to capture events that have, or could have, resulted in adverse consequences to people (health and safety), the environment or the local community, as well as events that have, or could have, resulted in adverse consequences to our legal, reputational or financial standing. Recording hazards that could have resulted in adverse consequences as events in the event management system is encouraged as a proactive measure to help reduce the number of near misses and significant events.

We consider BHP’s material³ risk profile to identify potential negative impacts. This covers threats that have been identified and assessed under our Risk Framework to determine their potential impacts and likelihood. For more information on BHP’s Risk Framework, refer to our Operating and Financial Review 9 – How we manage risk.

We cross-check the actual and potential negative impacts identified using the event management system and BHP’s material³ risk profile with a variety of internal and external sources, such as issues raised at our Annual General Meeting  and through industry sustainability standards and benchmark assessments. We also consult with stakeholders, such as through the BHP Forum on Corporate Responsibility, via ESG investor round tables and advisory groups and with internal stakeholders via focused discussions.

Assessing the significance of the negative impacts 

The next step is to assess the significance of the actual or potential negative impacts identified. To do this, BHP uses an internal severity rating scale (tiered from one to five by increasing severity), as defined in our mandatory minimum performance requirements for risk management. 

For actual negative impacts, all events recorded in our event management system are assigned a severity level based on their actual or potential impact. We consider actual events from our event management system with a  severity level of three or above to be ‘material’ for Global Reporting Initiative reporting purposes.

For potential negative impacts, we consider a current material³ risk to also be ‘material’ for GRI reporting purposes where it satisfies one or both of the following criteria:

1. The maximum foreseeable loss (MFL) if the risk was to materialise is assessed as severity level five (the highest level) and the most significant potential impact of the risk is associated with a sustainability-related category under our Group Risk Architecture. The MFL is the estimated impact to BHP in a worst-case scenario without regard to probability and assuming all risk controls, including insurance and hedging contracts, are ineffective.
2. The level of residual risk is above a certain threshold. This is determined by considering the estimated probability and impact to BHP assuming all risk controls that are in place are operating in accordance with their design.  

For more information on BHP’s Risk Framework, including our Group Risk Architecture, refer to our Operating and Financial Review 9 – How we manage risk.   

Identification and assessment of positive impacts

Our positive impact on the economy, environment and people is captured through our Social Value Framework and Social Investment Framework.  

Social value is the mutual value created through enduring positive relationships with people and planet that enable us to realise our purpose. One of the tools in our overall approach to contributing to the creation of social value is social investment.

The Social Value Framework was developed through extensive consultation and identified the opportunity to build value, beyond minimum compliance, through proactive initiatives and investments that focus on sustaining long-term, mutual value with those who help to enable the realisation of our purpose.

Our social investment strategy is informed by our Social Investment Framework, which aims to make a meaningful contribution to addressing the sustainable development challenges of most relevance to our business and stakeholders. We prioritise working in genuine partnership with others towards shared outcomes. At the highest level, the Social Investment Framework is built on relevant UN SDGs in the areas of innovation and adaptation, capability and inclusion, and environment. 

Instead of assessing each of our positive impacts individually, we consider our six social value pillars and three social investment themes are material for GRI reporting purpose.

Our material sustainability issues

The Board’s Sustainability Committee reviews our materiality assessment approach and the list of material issues each year . In addition, the alignment of the BHP materiality assessment process with the GRI methodology is subject to independent third-party limited assurance as required under our ICMM membership. EY’s assurance statement is available in our Annual Report.   

Our materiality assessment informs our sustainability approach and helps to guide the depth of coverage of key topics to be included in our Annual Report in line with the GRI Standards Reporting Principles. 

In FY2022, the pillars and themes under our social value and social investment frameworks align closely with the events and risks identified as material   for GRI reporting purposes through our review of BHP’s event management system and material  3 risk profile. Where appropriate, similar pillars, themes, events and risks were grouped together to determine our material sustainability issues against which to report. Accordingly, the material sustainability issues shown in the table below are the areas of focus for our sustainability disclosures in our Operating and Financial Review 7 – Sustainability. Refer to the section reference in the table for where our most material sustainability issues are covered in the BHP Operating and Financial Review 7 – Sustainability.

We use BHP’s event management system to identify actual negative impacts. This system is designed to capture events that have, or could have, resulted in adverse consequences to people (health and safety), the environment or the local community, as well as events that have, or could have, resulted in adverse consequences to our legal, reputational or financial standing. Recording hazards that could have resulted in adverse consequences as events in the event management system is encouraged as a proactive measure to help reduce the number of near misses and significant events.

We consider BHP’s material³ risk profile to identify potential negative impacts. This covers threats that have been identified and assessed under our Risk Framework to determine their potential impacts and likelihood. For more information on BHP’s Risk Framework, refer to our Operating and Financial Review 9 – How we manage risk .

We cross-check the actual and potential negative impacts identified using the event management system and BHP’s material3  risk profile with a variety of internal and external sources, such as issues raised at our Annual General Meetings and through industry sustainability standards and benchmark assessments. We also consult with stakeholders, such as through the BHP Forum on Corporate Responsibility, via ESG investor round tables and advisory groups and with internal stakeholders via focused discussions.

Assessing  the significance of the negative impacts 

The next step is to assess the significance of the actual or potential negative impacts identified. To do this, BHP uses an internal severity rating scale (tiered from one to five by increasing severity), as defined in our mandatory minimum performance requirements for risk management. 

For actual negative impacts, all events recorded in our event management system are assigned a severity level based on their actual or potential impact. We consider actual events from our event management system with a  severity level of three or above to be ‘material’ for Global Reporting Initiative reporting purposes.

For potential negative impacts, we consider a current material3 risk to also be ‘material’ for GRI reporting purposes where it satisfies one or both of the following criteria:

1. The maximum foreseeable loss (MFL) if the risk was to materialise is assessed as severity level five (the highest level) and the most significant potential impact of the risk is associated with a sustainability-related category under our Group Risk Architecture. The MFL is the estimated impact to BHP in a worst-case scenario without regard to probability and assuming all risk controls, including insurance and hedging contracts, are ineffective.
2. The level of residual risk is above a certain threshold. This is determined by considering the estimated probability and impact to BHP assuming all risk controls that are in place are operating in accordance with their design.  

For more information on BHP’s Risk Framework, including our Group Risk Architecture, refer to our Operating and Financial Review 9 – How we manage risk.

Identification  and assessment of positive impacts

Our positive impact on the economy, environment and people is captured through our Social Value Framework and Social Investment Framework.  

Social value is the mutual value created through enduring positive relationships with people and planet that enable us to realise our purpose. One of the tools in our overall approach to contributing to the creation of social value is social investment.

The Social Value Framework was developed through extensive consultation and identified the opportunity to build value, beyond minimum compliance, through proactive initiatives and investments that focus on sustaining long-term, mutual value with those who help to enable the realisation of our purpose.

Our social investment strategy is informed by our Social Investment Framework, which aims to make a meaningful contribution to addressing the sustainable development challenges of most relevance to our business and stakeholders. We prioritise working in genuine partnership with others towards shared outcomes. At the highest level, the Social Investment Framework is built on relevant UN SDGs in the areas of innovation and adaptation, capability and inclusion, and environment. 

Instead of assessing each of our positive impacts individually, we consider our six social value pillars and three social investment themes are material for GRI reporting purpose.

The Board’s Sustainability Committee  reviews our materiality assessment approach and the list of material issues each year . In addition, the alignment of the BHP materiality assessment process with the GRI methodology is subject to independent third-party limited assurance as required under our ICMM membership. EY’s assurance statement is available in our Appendix 4E.   

Our materiality assessment informs our sustainability approach and helps to guide the depth of coverage of key topics to be included in our Annual Report in line with the GRI Standards Reporting Principles. 

In FY2022, the pillars and themes under our social value and social investment frameworks align closely with the events and risks identified as material   for GRI reporting purposes through our review of BHP’s event management system and material  3 risk profile. Where appropriate, similar pillars, themes, events and risks were grouped together to determine our material sustainability issues against which to report. Accordingly, the material sustainability issues shown in the table below are the areas of focus for our sustainability disclosures in our Operating and Financial Review 7 – Sustainability . Refer to the section reference in the table for where our most material sustainability issues are covered in the BHP Operating and Financial Review 7 – Sustainability.

We commit to several sustainability frameworks, standards and initiatives and disclose data according to their requirements. Our commitments inform and influence our sustainability approach. 

Continuing the approach we adopted in FY2020, in FY2022 we further integrated our sustainability reporting into BHP’s Operating and Financial Review to enable more effective reporting for our stakeholders and to capture the most material financial and non-financial information in one report. We disclose our most material sustainability issues in the Annual Report and our approach to sustainability management on our website. Our sustainability performance data is included in of the relevant sections of our Operating and Financial Review and in our ESG Standards and Databook. 

Our Annual Reporting suite also includes our Modern Slavery Statement 2022 prepared in accordance with UK and Australian requirements and our Economic Contribution Report 2022. In 2021 , we published our Climate Transition Action Plan (CTAP) which covered the focus areas of the Climate Action 100+ Net-Zero Company Benchmark. For FY2022, our climate disclosures are integrated into our Annual Report and were developed in alignment with the Task Force on Climate-related Financial Disclosures (TCFD) 2021 framework. They include progress on the commitments we made in the CTAP.

We have obtained external limited assurance over the sustainability disclosures included in our Operating and Financial Review and our ESG Standards and Databook.

Our sustainability disclosures are consistent with the principles, position statements and requirements of the following disclosure frameworks, standards and initiatives. Our response to them is below:

	The Global Reporting Initiative (GRI) Standards are the first global standards for sustainability reporting. They feature a modular, interrelated structure, and represent the global best practice for reporting on a range of economic, environmental and social impacts. Our sustainability disclosures, including our Annual Report and online content, have been prepared in accordance with the GRI Standards comprehensive-level option. GRI Content Index
	The Sustainability Accounting Standards Board (SASB) standards enable businesses around the world to identify and manage financially material sustainability risks (both threats and opportunities), and communicate them to investors. We have been reporting against the SASB Metals & Mining Standard since FY2020. SASB Index
	The International Council on Mining and Metals (ICMM) is an international organisation dedicated to a safe, fair and sustainable mining and metals industry. Every ICMM company member is required to adhere to ICMM’s Mining Principles.   Our sustainability disclosures are aligned with the Mining Principles and associated ICMM Performance Expectations. ICMM’s Mining Principles require member companies to conduct a prioritisation process to determine which assets will be subjected to third-party validation across a three-year cycle. Third-party validation for our operated assets is intended to occur across FY2022– FY2024.   Our water-related Performance Data is disclosed by operated asset in accordance with the ICMM Standard: A Practical Guide to Consistent Water Reporting.   ICMM Index
	The Task Force on Climate-related Financial Disclosures (TCFD) recommendations are designed to solicit consistent, decision-useful, forward-looking information on the material financial impacts of climate-related threats and opportunities, including those related to the global transition to a low-carbon economy. We address the TCFD recommendations within our Operating and Financial Review, 7.1 - Our approach to sustainability and ESG Standards and Databook.  TCFD Index
	The UN Global Compact (UNGC) provides a universal language for corporate responsibility and provides a framework to guide all businesses regardless of size, complexity or location. As signatories to the Ten Principles of the United Nations Global Compact (UNGC), our sustainability disclosures serve as our UNGC Communication on Progress on implementation of the principles and support for the UNGC’s broader development objectives. UNGC Index
	The CEO Water Mandate is a UN Global Compact initiative that mobilises business leaders on water, sanitation, and the Sustainable Development Goals. BHP is a CEO Water Mandate endorsing company for demonstrating its ongoing commitment to the initiative and its six commitment areas. Since 2019, BHP has included a description of action and investments undertaken in relation to the CEO Water Mandate in its annual Communication on Progress, available at this link. UNGC Index
	The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries - developed and developing - in a global partnership.   Refer to our GRI Index to understand how we contribute towards the achievement of the SDGs. SDGs linked to our GRI Index
	The Extractive Industries Transparency Initiative is the global standard to promote the open and accountable management of oil, gas and mineral resources. BHP has been a supporter of the Extractive Industries Transparency Initiative (EITI) since its inception in 2002.
	CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. BHP achieved a place on the CDP Climate Change A List in 2018 and a grade of 'A-' in 2019 and 'B' in 2020 and 2021. 2022 CDP Submission - Pending grading 2021 CDP Submission - B 2020 CDP Submission - B 2019 CDP Submission - A- 2018 CDP Submission - A
	The Paris Agreement sets out a global framework to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C. It also aims to strengthen countries’ ability to deal with the impacts of climate change and support them in their efforts. The Paris Agreement is a landmark global climate change agreement, adopted at the Paris climate conference (COP21) in December 2015. BHP joined the Paris Pledge for Action.
	The Voluntary Principles Initiative (VPI) was created to promote implementation of the Principles. BHP is a member of the Initiative since 2004. The Voluntary Principles on Security and Human Rights are an internationally recognised set of principles that guide companies on how to conduct their security operations while ensuring respect for human rights.   We are committed to respecting internationally recognised human rights as set out in the Voluntary Principles on Security and Human Rights.
	UN Guiding Principles on Business an Human Rights The UN Guiding Principles on Business and Human Rights are a set of guidelines for States and companies to prevent, address and remedy human rights abuses or adverse impacts in business operations. We are committed to operating in a manner consistent with the UN Guiding Principles on Business and Human Rights.
	The Copper Mark is a credible assurance framework that seeks to promote responsible practices and demonstrate the copper industry’s contribution to the UNSDGs. The Copper Mark uses the Risk Readiness Assessment (RRA) adopted by the Responsible Minerals Initiative (RMI), which contains 32 issue areas covering environmental, social and governance aspects of mining and refining operations. In FY2021, BHP signed our letters of commitment for Olympic Dam, Escondida and Spence to the Copper Mark assurance process. The Copper Mark was awarded to Olympic Dam in September 2021, while Spence and Escondida were each awarded theirs in November 2021.
	The Global Industry Standard on Tailings Management (GISTM) was established as an international standard for safer tailings management through a process co-convened with the International Council on Mining and Metals (ICMM), United Nations Environmental Programme (UNEP) and the Principles of Responsible Investing (PRI). The standard provides a framework for safer tailings management and an ambition to achieve the goal of zero harm to people and the environment. BHP is working towards implementation and conformance with the requirements that have been set out in the GISTM.   For more information on how our sustainability disclosures meet these frameworks, standards and initiatives, refer to our ESG Standards and Databook.

As a global company, we interact with a range of partners and stakeholders. Our methods, frequency of engagement and approach to listening to partners and stakeholders are diverse. We use a range of formal and informal communication and engagement channels to understand stakeholders’ views:

• Globally, we communicate and engage with external stakeholders via our Annual General Meetings, Group publications (including the Annual Report and other topic-specific reports), our website and our social media platforms, releases to the market and media, brand campaigns, analyst briefings, speeches and interviews with senior executives and investor round tables.
• At a regional and local level, each operated asset is required to plan, implement and document stakeholder and partner engagement activities. This includes engagement via community forums, newsletters, reports, community perception surveys and consultation groups, implementing community complaint and grievance mechanisms, representation on specific industry association committees and initiatives, and engagement to develop social and environmental programs. We also engage on sustainability issues with a broader range of stakeholders, including local governments, non-government organisations (NGOs), schools and universities and others.
• Within our business, we engage with our people (employees and contractors) via tailored internal channels. These channels include our intranet, email and newsletters, town hall meetings and by inviting feedback and comment through Engagement and Perception Surveys. Key internal announcements and videos are made available in English and Spanish.

The following table provides an overview of our stakeholder groups, their range of interests and how we engage with them.

Our approach to sustainability is overseen by BHP’s Board. The Board’s Sustainability Committee advises and assists the Board in its oversight of the Group’s health, safety, environmental and community (HSEC) matters. Members of the Sustainability Committee are Non-executive Directors determined by the Board to have appropriate skills in HSEC matters.

The Sustainability Committee also advises the Board on the adequacy of the Group’s HSEC Framework, HSEC Management Systems, and governance of HSEC matters, along with the Group’s HSEC performance under those systems. This includes consideration of both existing HSEC issues, such as climate, safety and Indigenous and human rights, as well as emerging areas of HSEC risk for BHP.  

The Sustainability Committee advises the Remuneration Committee in setting HSEC-related scorecard targets and evaluating performance against those targets.

In addition, the Board’s Risk and Audit Committee assists the Board in overseeing the Group’s risk management systems.

BHP also seeks advice from external experts and forums on issues relating to sustainability as inputs into our policy development and decision-making processes. The BHP Forum on Corporate Responsibility is a key part of our governance approach and stakeholder engagement program. The Forum comprises independent civil society leaders in various fields of sustainability, who make an important contribution to our approach over a range of social and environmental issues and the development of our policies, strategies and standards. They provide insight into current and emerging issues, challenge our thinking and allow us to understand and consider the broader impacts of our actions.

Under our Group-wide Risk Framework, our aim is to identify    risks (both threats and opportunities) associated with our business, including risks and potential impacts that relate to sustainability issues. This enables us to prioritise and manage the risks that matter most.

We classify all risks to which BHP is exposed using our Group Risk Architecture. This is a tool to identify, analyse, monitor and report risk, which provides a platform to understand and manage risks. Similar risks are considered together in categories, such as ‘People and culture’, ‘Health and safety’ and ‘Environment, climate change and community’. Each category is then further comprised of groups of risks, which include ‘Occupational safety’, ‘Human rights’, ‘Climate change’ and other sustainability risks. This gives the Board and management visibility over the aggregate exposure to risks – including sustainability risks – on a Group-wide basis and supports performance monitoring and reporting against BHP’s risk appetite.

When we assess the materiality of a current risk, our Risk Framework requires us to consider all potential impacts, including to health and safety, the environment, communities, human rights and social value. This is designed to support the consideration of all potential impacts in risk assessments and means potential sustainability impacts are required to be considered in the context of all identified risks.

Risk management is embedded into work processes and critical business systems to help us develop a risk-informed approach to sustainability.

We set workplace HSEC standards for our operated assets and work to enforce their application. Contractors working at our operated assets must comply with our standards and requirements, and we seek to ensure our suppliers, agents and service providers maintain business practices and workplace standards comparable to our own.

Our Internal Audit   team is responsible for providing independent and objective assurance over the control environment (governance, risk management and internal controls) to the Board and Executive Leadership Team. 

Third-party assurance providers visit selected operated assets and evaluate our sustainability approach to ensure we accurately represent our commitments and actions.

For more information on our approach to risk management, refer to our Operating and Financial Review, 9 – How we manage risk.