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Sustainability-related Risk Management

Our Group-wide approach to managing risk 

The identification and management of risks is central to achieving our strategic objectives. It helps to protect us against potential negative impacts, enables us to take risk for strategic reward and improves our resilience against emerging risks. BHP believes effective risk management requires a single, consolidated view of risks across the business to understand the Group’s full risk exposure and to prioritise risk management and governance activity. As such, we apply a single framework (known as the Risk Framework) for all risks.  

There are four pillars in our Risk Framework: risk strategy, risk governance, risk process and risk intelligence.  

Risk Management

For further information, refer to BHP Annual Report 2023, Operating and Financial Review 8 How we manage risk

How our approach applies to sustainability-related risks 

Our Risk Framework requires the identification and management of risk (both threats and opportunities) to be embedded in business activities. We aim to identify all risks associated with our business, including those that relate to sustainability, to support us to prioritise and manage the risks that matter most.  

When we assess the materiality of a 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 means that potential sustainability impacts are required to be considered in the context of all identified risks – even risks that may not initially appear to be linked to sustainability.  

Once assessed, risks are required to be treated through appropriate controls, monitored and reviewed in accordance with the requirements of our Risk Framework. Current material risks are required to be evaluated once a year at a minimum by the risk owner or accountable individual. 

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 groups and categories, which supports us to manage risks associated with sustainability-related matters. For example, we consider similar risks in categories such as ‘Health, Safety & Environment’ and ‘People & Culture’, while risk groups that sit under those categories include ‘Occupational Safety’, ‘Tailings Storage Facilities’, ‘Human Rights’, ‘Climate Change’, ‘Water Interactions’, ‘Biodiversity Loss & Land Use Impacts’ and ‘Diversity, Inclusion & Equal Opportunity’. The Group Risk Architecture gives the Board and management visibility over the aggregate exposure to risks on a Group-wide basis and supports performance monitoring and reporting, including in areas related to sustainability.  

Further mandatory minimum performance requirements may also apply to the management of some sustainability-related risks. Refer to the following pages for information on how we manage risks related to Tailings Storage Facilities, Biodiversity, Ethics and Business Conduct, Safety, Sexual Harassment, and Water.  

Our Risk team reports biannually to a joint meeting of the Board’s Risk and Audit Committee and Sustainability Committee on the Group’s material risk profile, including health, safety, environment, climate, community and human rights risks, as necessary.