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Our supply chains have become increasingly globalised, complex and competitive. BHP made payments to more than 9,000 suppliers in FY2020, including those in our local communities, and is one of the world’s largest bulk vessel charterers. At the same time, consumer demand for ‘green’ and ethical products, environmental regulations on business activities and investors’ sustainability expectations are growing.

Promoting sustainability in our value chain

As a leading global resources company, we strive to work with our customers, suppliers and other value chain participants to promote sustainable practices across the full life cycle of our products. BHP supports the global transition to a low carbon economy by continuing to contribute to the sustainable procurement and production of commodities essential to the energy and mobility transition, working with our partners and key suppliers along our value chains.

BHP’s Value Chain Sustainability strategy takes a systems approach, designed to assess and work with others to improve the sustainability impacts of our upstream supply chains, inbound and outbound logistics, and our products as they move through the value chain from extraction, processing and use. We can broadly categorise Value Chain Sustainability activities across our value chain as follows:

  • Responsible sourcing: actions to integrate sustainability considerations into procurement and logistics in our inbound and outbound supply chains (including shipping)
  • Process stewardship: actions to help ensure the sustainability performance of our operated assets meet the responsible sourcing expectations of the market
  • Product stewardship: actions to influence the sustainability performance of our downstream value chain where we do not have operational control

Our Value Chain Sustainability strategy seeks to identify and improve performance across a wide range of relevant issues, including people, environment and communities. In determining where to focus, we consider financial impact as well as environmental and social materiality. Priority areas (see below) have been identified and are aligned with BHP’s social value priorities.

Infographic People Environment Community

Responsible sourcing

We encourage the suppliers we work with to put sustainability at the heart of their operations. The supply chain for our global operations includes skilled labour, miscellaneous services and supply of raw, direct and indirect materials. For all our goods and services, we engage our suppliers through a commercial framework that is aligned with Our Charter values and our ethical practices.

We are focused on how we can support suppliers and service providers to adopt sustainable business standards in health, safety, human rights, anti-corruption and environmental protection that are in line with our own. Contractors working at our operated assets are required to comply with our Health, Safety and Environment (HSE) standards. We also look for opportunities to minimise adverse safety, health, human rights, environmental and climate impacts throughout our value chain.

We take a risk-based approach to identify potential suppliers for more in depth assessment of their compliance against our requirements. The approach is based on a combination of questionnaires, due diligence and third party data. We manage our relationships through relevant contractual arrangements, applicable regulatory frameworks, Our Charter, Our Code of Business Conduct and Our Requirements standards. The Our Requirements for Supply standard provides the framework with a view to ensuring our suppliers comply with our HSE and business conduct minimum requirements.

We assess supply categories according to commercial dependency and supplier risk. If required, we work together to develop a plan to ensure the supplier meets applicable Our Requirements standards throughout the relationship. We also support suppliers from host communities to help them meet our standards, build their capabilities and generate local employment.

In FY2019, the foundations of our Ethical Supply Chain and Transparency program were developed and tested through the completion of a pilot program. The full program was launched in May 2020 and now forms the primary preventative control to manage the risk of a human rights breach within BHP’s supply chain. The program applies to all suppliers of non-traded goods and services to BHP. This program is critical to the sustainable operation of our business, but also to our responsibility to work with our suppliers and contractors to manage risks that human rights abuses present through our value chain. We are committed to working with our suppliers to enhance their understanding of our Ethical Supply Chain and Transparency processes, which includes taking steps to encourage them to improve management of human rights risks (including modern slavery) among subcontractors and across their own supply chain.

We continue to strengthen our processes and seek to better understand the risks of modern slavery and human trafficking in our operations and supply chains, including assessing our direct suppliers against our Minimum requirements for suppliers, and using third-party audits for high-risk vendors where appropriate. We report our progress annually through our Modern Slavery Act Statement, which is prepared under the UK and Australian Modern Slavery legislation.

Process stewardship

We support industry association programs and other initiatives that bring together participants in a product’s life cycle to improve sustainability performance. For example, we are members of the International Council on Mining and Metals (ICMM), apply the ICMM Mining Principles and participate in the ICMM Materials Stewardship Facility. In FY2020, we developed and implemented a plan to conform to the updated ICMM Mining Principles, which now include clearly articulated performance expectations and requirements for asset-level validation. We are members of Responsible Steel, participated in the London Metal Exchange’s consultation on responsible sourcing standards, and participated in the development of the Copper Mark, a new assurance program for responsible copper production established by the International Copper Association. Our participation in these initiatives is aimed at ensuring that the standards and thresholds are meaningful and drive a fundamental change in the industry.

Through our minimum mandatory performance requirements, including those that address capital projects, environment, climate change, water, tailings storage facilities and closure, we set standards to ensure that in project design, operation and de-commissioning, BHP considers cost effective measures for the efficient use, recovery, re-use or recycling of energy, natural resources, and materials.

Product stewardship

BHP encourages the responsible design, use, reuse, recycling and disposal of our products throughout our value chain, in line with the ICMM Mining Principles.

Our Sales and Marketing Team works with our operated assets to maintain compliance with all product regulatory requirements in relevant markets. This includes assessing the hazards of the products of mining according to UN Globally Harmonised System of Hazard Classification and Labelling, or equivalent relevant regulatory systems, and communicating through safety data sheets and labelling as appropriate.

Where possible, BHP also works directly with those involved in the processing and use our products to improve environmental performance throughout the value chain, and to promote the sustainable use of our products. For example, we work with individual customers to design and test raw material blends that optimise environmental performance. We also collaborate on research with customers, industry bodies and academia to identify sustainable product and process improvements. We seek to improve materials traceability and transparency of products through piloting blockchain initiatives with industry consortia.

In July 2019, BHP committed to set public goals related to Scope 3 emissions. During FY2020, we investigated BHP’s opportunities to influence emissions reductions through an analysis of our value chain and consultation with suppliers, customers, investors and other stakeholders. As a result, we have set Scope 3 GHG emissions goals for 2030.

Our interest in the value chain also extends to water use. BHP has potential exposure to water-related risks across the value chain and climate change may increase our future exposure. Customers and suppliers may be exposed to areas of high to extremely high water stress, and we must understand these factors and respond to the challenges, working with our customers and suppliers.

Process stewardship and performance

At BHP we are committed to a high level of sustainability performance at our operated assets, as well as seeking to influence the sustainability performance of our downstream customers and across the value chain. We support industry association programs and other initiatives that bring together participants in a product’s life cycle to improve sustainability performance.

You can read more about our activities below and view our current accreditations. 

 

ISO 14001 and ISO 9001

A number of our BHP operated assets currently hold ISO 14001:2015 and ISO 9001:2015 certifications.


ICMM Mining Principles

In FY2020, we developed an implementation plan to conform to the updated ICMM Mining Principles, which now include clearly articulated performance expectations and requirements for asset-level validation.


Copper Mark


In FY2020, we participated in the development of the Copper Mark, a new assurance program for responsible copper production established by the International Copper Association.


Responsible Steel


As business members of Responsible Steel we are partnering with customers to improve sustainability and emission standards in the steel making value chain.

 

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 and set target environmental outcomes for land, biodiversity, air and water resources that are consistent with the assessed risks and potential impacts. Target environmental outcomes are required to be approved by the relevant Asset President or equivalent and included in the life of asset plan. Verification of the EMS is either via ISO14001 certification, for those sites that currently hold ISO14001 certification, or internal assurance processes. For more information refer to our environment approach.

 

ISO certifications

BHP ISO certifications imageThis information is valid as at 30 June 2020


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