Our Social Investment Strategy frames BHP’s approach to voluntary social investment across all levels of the organisation. It is the result of a review in FY2020 of the Group’s approach to social investment and analysis of how we can maximise the value of our social investment to strengthen social value. We prioritise working in genuine partnership with others towards shared outcomes.

In particular, our strategy aims to:

• provide a unified and integrated framework to guide all social investment across our operated assets, business and Group functions
• align our social investment with current and emerging issues, trends and priorities of relevance to our business and stakeholders, and where we believe we can make a distinctive contribution and/or demonstrate leadership
• contribute to addressing global sustainable development challenges by aligning our strategy to the United Nations Sustainable Development Goals (UNSDGs) of most relevance to our business and committing to work in partnership with others to achieve shared goals
• enable us to more effectively evaluate, aggregate and demonstrate the cumulative positive impact of our social investment to our stakeholders
• strengthen social value through making a positive contribution to the environment and society.

Our approach to social investment is underpinned by some core principles: coherent, enduring, value-oriented and informed by social value priorities. These principles are also intended to ensure social investments are designed and delivered in a manner that respects relevant local customs, traditions and priorities.

We recognise our responsibility to make a positive contribution to sustainable development and environmental resilience. 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. The framework is informed by the UN SDGs and as part of our review of the Social Investment Strategy in FY2020, we updated our Social Investment Framework to better align with the focus of our business and the communities where we have a presence.
The Social Investment Framework focuses on three themes:

• Future of Communities- to contribute to the understanding, development and sustainable use of resources to support a just transition for communities and address the challenges of the future
• Future of Work- to enhance human capability and social inclusion through increasing access to relevant education and vocational training, skills development, and enhanced livelihood opportunities linked to the future of work
• Future of Environment- to contribute to enduring environmental and social benefits through biodiversity conservation and ecosystem restoration, water stewardship and climate change mitigation and adaptation

The Social Investment Framework is delivered using a local, regional, national and global approach, outlined in the figure below.

Monitoring and evaluation is a fundamental element of the global social investment approach. A suite of metrics is used to enable us to aggregate data aligned to the key focus areas of the Social Investment Framework and consistently assess and quantify the outcomes and impact of our social investment across all levels of investment.

Our voluntary social investment in FY2020 totalled US$149.63 million, consisting of US$113.83 million in direct community development and environment projects and donations, US$12.03 million equity share to non-operated joint venture social investment programs, a US$12 million donation to the BHP Foundation⁽¹⁾ and US$1.85 million under the Matched Giving Program. Administrative costs to facilitate direct social investment activities totalled US$8.58 million and US$1.33 million supported the operations of the BHP Foundation.

⁽¹⁾ The BHP Foundation is a charitable organisation established and funded by BHP, which works in partnership with internationally recognised institutions, think tanks and non-government organisations to address some of the most critical sustainable development challenges facing society that are directly relevant to the resources sector.

We are proud to support the organisations that are important to our employees. Through our Matched Giving Program, BHP matches personal donations made by our employees to eligible not-for-profit organisations at a ratio of 2:1. BHP donates two dollars for every dollar donated by our employees.

Our Matched Giving Program features 50 eligible organisations for matching, with their official chapters (if applicable) in other locations also eligible. Throughout the year, almost 3,000 of our employees participated in the Program, supporting a total of 103 individual not-for-profit organisations. These organisations received US$ 1.85 million in matching contributions via the Program through a total of 6,572 individual donations.

BHP supports the growth of local businesses in the regions where we operate, through sourcing and promoting locally available products and services. Our operated assets develop local procurement plans that identify opportunities for local suppliers, including small businesses, to deliver capacity building and employment creation initiatives. These initiatives are designed to be sustainable beyond BHP’s presence in a region.

During FY2020, 12 per cent of our external expenditure was with local suppliers. An additional 84 per cent of our supply expenditure was within the regions in which we operate. Of the US$16 billion paid to more than 9,000 suppliers across the globe, US$1.9 billion was paid to local suppliers in the communities in which we operate, supporting their further development.

Our expenditure with local suppliers in FY2020 was mostly made in Chile (15 per cent), Australia (11 per cent), the United States (9 per cent), Trinidad and Tobago (2 per cent) and Mexico (1 per cent). These percentages are of our total external expenditure within that context.

⁽¹⁾ Local spend refers to spend within communities in which we operate. Regional spend refers to spend within the regions, such as states and provinces, and the home country of operation, excluding local spend.