Competition for environmental resources is growing, with the twin crises of climate change and biodiversity loss amplifying the sensitivities of our natural systems. Through our Climate Transition Action Plan 2021 and Climate Change Position Statement and Water Stewardship Position Statement, we recognise that BHP has a responsibility to play a leadership role in responding to these global challenges.
BHP case study a first for natural capital accounting in mining
In a first for the mining industry we’ve published, with our partners, a case study on how natural capital accounting can be applied to sectors who are working to halt and reverse current trends in nature loss by 2030.
Our vision and environment approach
We recognise that with BHP's significant land and water footprints, there is an opportunity to steward a new approach to environmental management.
Under our 2030 healthy environment goal, we will focus on the creation of nature positive1 outcomes by having at least 30 per cent of the land and water we steward under conservation, restoration or regenerative practices by 2030.
Supporting this vision is our approach to environmental management, which is embedded in our purpose, Our Charter value of Sustainability and key company position statements and standards. In line with Our Charter, we acknowledge that we have a role in avoiding or minimising adverse environmental impacts through every stage of our operational activities and contributing more broadly to the resilience of the natural environment. We also recognise that our environmental performance and management of environmental impacts on our host communities is an important part of our contribution to social value.
Our approach to environmental management is based on the identification, assessment and management of risks (both threats and opportunities) across all phases of our operational activities, including exploration, development, operation and closure. BHP applies a Group-wide Risk Framework to identify and manage risks, including environmental risks, and we engage with stakeholders and take their perspectives and knowledge into account in our decision-making.
In FY2022, we announced our Group-wide 2030 goals that include water, biodiversity and decarbonisation. Our goals contribute to the achievement of collective goals, such as relevant United Nations Sustainable Development Goals. We monitor and report our Group performance on a range of environmental indicators and metrics in line with external reporting frameworks, such as the Global Reporting Initiative (GRI). In September 2021, BHP joined the Taskforce on Nature-related Financial Disclosures (TNFD) Forum as we seek to incorporate a deeper understanding of nature-related risks to further embed nature into our strategic planning, risk management and corporate decision-making processes. Annual performance data, progress on public targets and goals and key initiatives, as well as certain environmental monitoring information and environmental social impact assessments are publicly available on our website.
1 Nature positive is defined by the WBCSD / TNFD as “A high-level goal and concept describing a future state of nature (e.g. biodiversity, ecosystem services and natural capital) which is greater than the current state.” It includes land and water management practices that halt and reverse nature loss – that is, supporting healthy, functioning ecosystems.
Minimising environmental impacts
At every stage in the life cycle of our operated assets, we seek to avoid, minimise and mitigate our adverse environmental impacts in line with our defined Risk Appetite Statement and have comprehensive frameworks, policies and processes (including on governance and risk management) that apply to environmental risks and set the basis for how we manage those risks and achieve our environmental objectives.
Our Group-wide approach to environmental management is set out in the Our Requirements for Environment and Climate Change standard (OR E&CC) and our mandatory minimum performance requirements for risk management to deliver on our commitments and to manage environment-related risks. These standards require us to take an integrated, risk-based approach to managing any actual or reasonably foreseeable operational impacts (direct, indirect and cumulative) on biodiversity, land, water and air. We establish and implement monitoring and review practices designed to ensure continued management of environment-related risk within our risk appetite through business planning and project evaluation cycles.
An updated version of the OR E&CC was issued in FY2020 to reflect changes in BHP’s Risk Framework and other Our Requirements standards, our FY2017- FY2022 public sustainability targets for water, climate change and biodiversity, our Water Stewardship Position Statement and new technical standards for water. In FY2023, we intend to review our OR E&CC to incorporate mandatory minimum requirements that will help us achieve our 2030 goals.
Applying the mitigation hierarchy
As detailed in the OR E&CC, our operated assets are required to put in place controls and plans that reflect the mitigation hierarchy, an approach that helps us to avoid potential adverse environmental impacts and, if necessary, minimise and rehabilitate any unavoidable impacts. If, after application of the first three stages of the mitigation hierarchy, actual or reasonably foreseeable impacts to important biodiversity and/or ecosystems remain, we will seek to identify compensatory actions, such as offsets, in line with BHP’s risk appetite.
Commitments to avoid adverse impacts
BHP respects legally designated protected areas and commits to avoiding areas or activities where we consider the environmental risk is outside BHP’s risk appetite. These include:
- We do not explore or extract resources within the boundaries of World Heritage listed properties.
- We do not explore or extract resources adjacent to World Heritage listed properties, unless the proposed activity is compatible with the outstanding universal values for which the World Heritage property is listed.
- We do not explore or extract resources within or adjacent to the boundaries of the International Union for Conservation of Nature (IUCN) Protected Areas Categories I to IV, unless a plan is implemented that meets regulatory requirements, takes into account stakeholder expectations and contributes to the values for which the protected area is listed.
- We do not operate where there is a risk of direct impacts to ecosystems that could result in the extinction of an IUCN Red List Threatened Species in the wild.
- We do not dispose of mined waste rock or tailings into a river or marine environment.
Environmental management processes
Our environmental management processes are set out in the OR E&CC and BHP’s mandatory minimum performance requirements for risk management, as well as aspects of other Our Requirements standards. The OR E&CC also includes specific climate change related requirements for our operated assets, in addition to the environment components listed below.
- Development of requirements under the OR E&CC considers and aligns to applicable external standards and requirements, including the ISO14001 international standard for Environmental Management Systems and the International Finance Corporation Performance Standard 6, which relates to biodiversity conservation and sustainable management of living natural resources. The OR E&CC applies to environment-related risks and potential impacts on the physical environment: air, water, land, biodiversity, communities and their interrelationships.
- The OR E&CC applies to all BHP employees and contractors involved in planning or executing exploration, development, operational or closure activities, or those making investment decisions. Compliance with the OR E&CC is not mandated for non-operated joint ventures; however, consideration of the OR E&CC (or equivalent standards) is encouraged.
- To support continual improvement in environmental performance, each of our operated assets is required to:
- have an Environmental Management System (EMS) that aligns with ISO14001 standards. Verification of the EMS is either via ISO14001 certification, for those sites that currently hold ISO14001 certification, or internal assurance processes, and
- set Target Environmental Outcomes (TEOs) for biodiversity, land, air and water resources that are consistent with the assessed risks and potential impacts. TEOs are required to be approved by the relevant Asset President or equivalent and included in the life-of-asset plan.
- Environmental impact assessments are required to consider, within the area of influence, current and reasonably foreseeable activities associated with life-of-asset and closure plans, including consideration of climate projections.
- Each of our operated assets must define intended asset-level environmental objectives by setting TEOs for land, biodiversity, air and water resources consistent with the assessed risks and potential impacts. Management review processes are required to monitor and verify progress towards achievement of TEOs and ensure continued management of environment-related risk within our risk appetite through the business planning and project evaluation processes.
- We require operated assets to assign and include resources in their two-year budgets to help manage environment-related risks (including regulatory and compliance risks) and to progress TEOs and context-based water targets.
- Environmental incidents and events are required to be managed in line with BHP’s mandatory minimum performance requirements for event and investigation management, which includes requirements for reporting, investigations, corrective actions and communications relating to health, safety, environmentalal and community (HSEC) events, with the objective of minimising the potential for recurrence.
- BHP applies processes to engage with communities and external stakeholders and manage internal and external complaints and grievances. In addition to our business conduct hotline, EthicsPoint, and online case management system, the Our Requirements for Community standard requires local-level complaint management at our operated assets.
- The OR E&CC is regularly reviewed and updated as required.
The most significant air emissions across our portfolio of operated assets relate to emissions of greenhouse gases (GHG) and dust. For more information on GHG emissions see our Climate change webpage. We recognise the importance of managing and controlling the dust that mining operations can generate to avoid or minimise potential adverse impacts on air quality, health and the environment. The OR E&CC includes the requirement for operated assets that have identified the potential for significant air-related impacts on community wellbeing to develop an air quality management plan. The plan’s development must consider a stakeholder engagement strategy, dispersion modelling, targets, objectives and reporting.
We have implemented a number of actions to improve dust management at our operated assets. These include:
- At Western Australia Iron Ore (WAIO), we announced plans in FY2020 to invest up to a further A$300 million over five years to improve air quality and reduce dust emissions across our Pilbara operations. Studies have progressed to support future mine plans, including further optimisation of moisture management systems for ore conditioning at mines, and introducing new technologies, such as wind fences for reducing dust generation at the port.
- For the BHP Mitsubishi Alliance, we are developing an air quality framework for all our operated mines, focusing on improving real-time air quality monitoring and dust management controls to contribute to our proactive site operational measures.
- In Chile, we are implementing an air quality strategy for all our operated mines, focusing on real-time air quality and health exposure monitoring, dust management control improvements, modelling and forecasting of air quality conditions and dust analytics.
- At Nickel West, we are implementing an asset-level air quality management plan that focuses on air quality risk identification and management. This will enable improved operational controls to mitigate potential air quality risks across the Nickel West mining and processing operations.
Resource extraction and processing can generate large amounts of waste depending on the mineral geology, mining or extraction method and extent of processing applied to produce our products to the specifications our customers require. We are committed to continually improving our practices to minimise waste generation, increase recycling and repurposing of materials, and prevent pollution through proper disposal.
We broadly define waste from resource extraction into two main categories: mineral and non-mineral waste. These are further split into hazardous and non-hazardous streams, which are usually defined by local legislation.
Mineral waste includes waste from raw or intermediate materials, such as mineral ore that has been processed as part of the production sequence. We process some of our ores to increase the concentration of target minerals or remove unwanted components using processes such as beneficiation, refining and smelting. These processes generate mineral waste streams, such as tailings, waste rock, slimes, sludge, residues, slag, fly ash and gypsum or coal rejects.
Non-mineral waste includes waste that does not arise from minerals extraction and processing, but arises from our overall activities, such as packaging, lubricants, scrap metal and food waste from mining camps.
Mineral waste, including tailings, is the waste stream we focus on in our Group-level ESG Standards and Databook given it is the most significant waste for us in terms of the volume we generate. We also monitor and report hazardous waste streams (mineral and non-mineral), as required by local or national legislation.
While we focus on waste-related impacts related to our operations, we also recognise the potential downstream impacts of some of our products, for example uranium. Australian uranium is sold for nuclear power generation only and therefore waste associated with its use is disposed under specific local government regulation.
All waste streams (including waste from BHP operations that is managed by a third party) are required to be managed to the higher of applicable BHP internal global standards, such as the OR E&CC, or the local legislative requirements.
We have recently reviewed our waste reporting and expect to report additional waste data for our operated assets to align with GRI 306 Waste and SASB Metals and Mining requirements. We plan to start disclosing that data in our FY2024 reporting.
An example of our commitment to continuous improvement in relation to waste management is our joint funding of the Future Tails program, which we launched in June 2020 in partnership with Rio Tinto and the University of Western Australia. Over five years, we will invest A$2 million to fund a program of training, research and education to establish industry-wide best practice of waste management and tailings storage facilities.
Environmental governanceOur approach to environmental governance is a part of BHP’s overarching governance processes, as follows:
- The Board’s Sustainability Committee assists the Board in its oversight of the Group’s health, safety, environment and community (HSEC) matters, including our sustainability approach. The Sustainability Committee 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 the Group. The Board’s Risk and Audit Committee assists the Board with oversight of the Group’s risk management systems.
- As with all risks faced by the Group, environment-related risks are required to be managed in accordance with BHP’s Risk Framework. BHP uses the ‘three lines model’ to define the role of different teams across the organisation in managing risk, including environment-related risk. This approach sets clear accountabilities for risk management and provides appropriate ‘checks and balances’ to support us in protecting and growing value. The first line is provided by our frontline staff, operational management and people in functional roles. This is to ensure that anyone who makes decisions, deploys resources or contributes to an outcome is responsible for identifying and managing the associated risks. The second line functions, such as our Regional Health, Safety and Environment assurance teams, are responsible for providing expertise, support, monitoring and challenge on risk-related matters, including by defining and assuring the Group-wide minimum standards to which the first line operates. The third line, our Internal Audit team, is responsible for providing independent and objective assurance over the control environment to the Board and Executive Leadership Team. The outcomes of internal, as well as external, audits are taken into account when updating environmental management systems and the OR E&CC and also considered by the Board and senior management when reviewing the Group’s material risk profile.
Contributing to a resilient environment
We look beyond our operational footprint for nature-positive opportunities to contribute to environmental resilience on other land we steward, mostly retained as exploration tenements or leased for pastoral use, as well as ‘outside the fence’ at landscape-scales, and seek to work with others to collectively solve shared environmental challenges, as outlined in our Water Stewardship Position Statement and our Climate Transition Action Plan 2021.
We recognise BHP can engage across communities, government, business and civil society with the aim of encouraging actions to improve natural resources governance and advance sustainable solutions for the natural environment. We aim to do this through our individual company actions, as well as by promoting the adoption of industry best practice through industry associations we belong to, such as the International Council on Mining and Metals and the CEO Water Mandate.
We are committed to high ethical business practices and governance standards.
We provide detailed regulatory information in operational, environmental and community information for our local communities and key government stakeholders.