Sustainability approach

Sustainability is key to our purpose of bringing people and resources together to build a better world.

Our approach and position

Governance and oversight, engagement and performance

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Disclosure

Our ambition

We are committed to finding new ways of operating more sustainably while supplying products that are essential for the global transition towards a more sustainable future. We can only achieve our purpose through collective effort, and we value the opportunity of partnering in our value chain to strive to make our business more sustainable and to contribute to global sustainable development goals.

Our approach and position

We recognise our business interacts with a range of material sustainability topic areas. Furthermore, we recognise a key to operating more sustainably is how we govern our approach to managing our actual and potential impacts.

As illustrated below, our sustainability approach is defined by our purpose, building strong foundations, and creating social value. For more information, our social value framework, approach to governance, and annual performance against our social value scorecard are detailed on our Social value webpage and in the BHP Annual Report 2024, Operating and Financial Review 6.5 - 2030 goals. For more information on our approach to sustainability-related risk management, refer to our Sustainability-related risk management webpage and the BHP Annual Report 2024, Operating and Financial Review 8 How we manage risk.

Governance and oversight, engagement, disclosure and performance

Governance and oversight

The BHP Board has oversight of our approach to and delivery on sustainability and is supported by each of its Committees:

More information on the Board and each Committee is set out in the 2024 Corporate Governance Statement, Board Governance Document and Committee Charters on the Corporate Governance webpage.

Engagement

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

Stakeholder / Partner

Interest

How we engage

Customers

Broad customer base, geographically dispersed across multiple commodities

Sales agreements, product quality, performance and price, environmental laws and regulations, sustainability metrics and performance, alignment with regional regulations

Regular engagement according to commodity, sector and geography to understand our customers’ needs and determine the optimal product placement; participation in relevant industry associations and conferences and establishing partnerships and collaboration in areas of mutual interest, such as supply chain innovation and sustainability

Employees

Our global workforce of more than 90,000 employees and contractors

Group financial and sustainability performance, health and safety, our work with communities, working conditions, mental health and wellbeing, inclusion and diversity, development opportunities, proposed changes to our operated assets or practices

Regular communication through tailored internal channels, which include our intranet, email and newsletters, town hall meetings, toolbox talks, field leadership activities, ongoing dialogue between leaders and teams, HSEC Awards and through our Engagement and Perception Surveys

Governments where we operate

National, regional or state level and local governments in the countries where we have a presence

Fiscal and tax arrangements, global trade systems, labour relations and employment practices supplier payment arrangements, environmental laws, regulations and project approvals, mineral royalties, local infrastructure and community wellbeing

Direct Group engagement at all levels of government, as well as participation in industry associations where relevant to national (or international), regional/state or local issues

Indigenous peoples

A broad spectrum of Indigenous representatives including, community leaders and members, Traditional Owners
and representative bodies

Environmental, social and cultural impacts associated with our operated assets, cultural heritage, human rights, opportunities for social investment, local employment, local suppliers and business creation, improved community engagement mechanisms and environmental performance

Consultation, negotiation and agreement making processes, community engagement, work and local supply opportunities, social investment, preserving cultural heritage, targeted communications, community perception surveys

Industry peers and associations

Commodity-specific associations, as well as sector-specific associations at regional, national and international levels

Diverse range of issues associated with the resources sector or specific commodities; issues including the environment, health and safety, communities, skills and training for employees, economic policy and sustainability management and performance

Representation on specific committees and engagement on specific projects with industry associations, to develop guidelines, standards and programs, agree advocacy priorities and share best practice

Investment community

Debt and equity analysts, ESG analysts and corporate governance analysts

Alignment of our performance with shareholder interests, including good financial returns, strong governance and expectations of strong performance and management of financial and non-financial risk

Regular communication through analyst briefings on key issues, exchange releases, sharing Group publications, such as Annual Reports and Operational Reviews, participation in external benchmarking activities

Labour unions

Labour unions represented at many of our operated assets

Workers’ rights and interests, freedom of association and collective bargaining, health and safety,
remuneration, working hours, roster arrangements and risk management

Direct communication as required, respecting the right to freedom of association

Local communities

A broad spectrum of local communities with interests and concerns

Environmental, economic and social impacts associated with our operated assets, opportunities for social investment, local employment, local supplier and business creation, support for social infrastructure and programs, improved community engagement mechanisms and environmental performance

Community consultation, engagement and participation in BHP activities, work and local supply opportunities, social investment, targeted communications, community perception surveys

Media

Representatives from print, online, broadcast and social media

Broad range of issues reflecting diverse stakeholder interests

Media releases, briefings, presentations and interviews, publicly available information (Annual
Report and other topic-specific reports, our website, LinkedIn, YouTube, Twitter, Facebook)

Non-government organisations (NGOs) and civil society

Environmental, social and human rights organisations at local, national and international levels

Ethical, social and environmental performance of our operated assets, proposed operated assets or closed operated assets, governance mechanisms, risk management, complaint and grievance mechanisms and remedy, transparency, practices to respect human rights, social investment, non-
operated joint ventures, social and environmental impacts

Local engagement through each operated asset’s stakeholder engagement plan, regular engagement at the Group level with relevant national and international organisations, various multi-stakeholder initiatives and partnerships, and through the BHP Forum for Corporate Responsibility

Shareholders

A diverse group that has invested in our business with significant representation in Australasia, United Kingdom, Europe, South Africa and North America

Creation of long-term shareholder value through consistent financial returns and good governance. Ensuring high-quality governance and maintaining focus on continuous improvement and understanding shareholder concerns, including ESG performance

Annual General Meetings, publicly available information (Annual Report, other topic-specific reports, our website), regular meetings with institutional shareholders and investor representatives, ESG Roundtables and investment and community presentations

Society partners

Public or private organisations we partner with on specific projects to benefit society, the communities where we operate or the environment

Ethical, social and environmental performance of our operated assets, proposed operated assets or closed operated assets, governance mechanisms, risk management

Boards and operating committees, publicly available information (Annual Report and other topic-specific reports, our website), regular engagement at both the Group and local/regional levels

Suppliers

Businesses local to our operated assets (including local Indigenous suppliers) as well as national and multinational suppliers, including maritime vessel charterers

Procurement, inbound marketing procurement and charter party agreements, payments and minimum supplier requirements, safety standards

Regular engagement through the supplier life cycle determined according to supplier segmentation and risk, including with respect to health, safety, environment and community, modern slavery, transparency, inclusion and diversity, and business conduct more broadly

BHP also seeks advice from external experts and forums on issues relating to sustainability as inputs into our policy development and decision-making processes, such as from our Forum on Corporate Responsibility (FCR). Together with BHP’s CEO and other members of the Executive Leadership Team, the FCR comprises independent civil society leaders in various fields of sustainability, who make an important contribution to our approach over a range of sustainability-related topics and to the development of our related policies, strategies and standards. The majority of the membership is civil society members. They provide insight into current and emerging issues, challenge our thinking and allow us to understand and consider the broader impacts of our actions. More information on the FCR is available on our FCR webpage.

Contributing to sustainable development

The United Nations Sustainable Development Goals (SDGs) 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 contribute positively to the SDGs, but our operations can also create negative impacts. Therefore, sustainability must be integral to how we do business. The interconnectedness of the SDGs means a positive contribution to one can either have a multiplier effect or lead to potential negative impacts for another, 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 considered our contribution to the SDGs when developing our social value framework, and have mapped our FY2024 sustainability-related material topics and impacts to their relevant SDGs in our BHP Annual Report 2024, Operating and Financial Review 6.4 Material topics for sustainability reporting.

Performance

We use various metrics to measure our sustainability progress and performance. Our sustainability performance metrics are independently audited and a copy of the EY independent assurance report is available in the BHP Annual Report 2024, Operating and Financial Review 6.13 – Independent limited assurance report.
Refer to the ESG Standards and Databook 2024 for details on our FY2024 sustainability performance data.

Refer to the Social value webpage for our FY2024 performance on our social value scorecard.

ESG ratings agencies and benchmarks

We actively report in alignment with, and/or respond to, a range of prominent ESG ratings and benchmarks. More information on our performance is outlined in the table below.

Organisation

BHP performance

Morningstar Sustainalytics is a leading independent ESG and corporate governance research, ratings and analytics firm that supports investors around the world with the development and implementation of responsible investment strategies.

BHP is rated ‘Medium Risk’ with a score of 29.2. This places BHP in the top 16^thpercentile of the Diversified Metals Industry. Sustainalytics upgraded BHP on its Global Watch to Watchlist on the UN Global Compact (no longer “fail”) in April 2024.

MSCI is a leading provider of decision support tools and services for the global investment community.

BHP is rated ‘A’. In FY2024, MSCI upgraded to ‘Partially Concluded’ the ‘Very Severe’ Controversy against BHP, related to the failure in 2015 of the Fundão tailings dam operated by Samarco Mineração S.A. (Samarco). As a result, BHP no longer has a red flag or a ‘fail’ status against the UN Global Compact from MSCI. Samarco is a non-operated joint venture owned by BHP Billiton Brasil Ltda (BHP Brasil) and Vale S.A. (Vale), with each having a 50 per cent shareholding. For more information refer to Samarco.

BHP Brasil remains committed to supporting the Renova Foundation and its work to progress the remediation and compensatory programs to restore the environment and re-establish communities affected by the Samarco dam failure. The upgrade of the Controversy to ‘Partially Concluded’ followed extensive engagement with MSCI by BHP. We believe it is a reflection of the progress that has been made in Brazil towards ensuring the full and fair remediation and compensation for Samarco’s Fundão dam failure in 2015.

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 has received an ‘A-’ CDP score for 2023 (upgraded from the 2022 ‘B’ CDP score). This score sits in CDP’s leadership band for the 2023 CDP Climate Change Questionnaire, reflecting BHP’s continued transparency and performance on climate change. This score is one of the highest amongst our diversified mining peers, and also within the broader CDP activity group ‘Metallic mineral mining’, with only 9% of the companies obtaining leadership level scores.

2023 CDP Submission: A-

2022 CDP Submission: B

2021 CDP Submission: B

2020 CDP Submission: B

2019 CDP Submission: A-

2018 CDP Submission: A

ISS ESG is the responsible investment arm of Institutional Shareholder Services Inc., a global provider of environmental, social and governance solutions for asset owners, asset managers, hedge funds and asset servicing providers. They provide research and services relating to ESG performance of companies and investment portfolios.

ISS ESG rates BHP as C+. ISS ESG has a ‘red signal’ and UN Global Compact ‘fail’ status against BHP, related to the failure in 2015 of the Fundão Fundão tailings dam operated by Samarco, on its environment criteria. Related the the failure in 2015 of the Fundao tailings dam operated by Samacro.

BHP Brasil remains committed to supporting the Renova Foundation and its work to progress the remediation and compensatory programs to restore the environment and re-establish communities affected by the Samarco dam failure. BHP continues to engage ISS ESG and provide updates on the remediation and compensation efforts undertaken by the Renova Foundation. For more information refer to Samarco.

Disclosure

We commit to a number of sustainability frameworks, standards and initiatives and we disclose data as required by law and according to the requirements of those frameworks, standards and initiatives. Our sustainability performance data is included in relevant sections of the BHP Annual Report 2024, Operating and Financial Review, and in our ESG Standards and Databook 2024. Our Annual Reporting suite also includes our Modern Slavery Statement 2024, prepared under the Australian Modern Slavery Act (2018) and UK Modern Slavery Act (2015), and our Economic Contribution Report 2024. We have obtained external limited assurance over the sustainability disclosures included in the BHP Annual Report 2024, Operating and Financial Review and our ESG Standards and Databook 2024.

Our sustainability disclosures are informed by and/or consistent with the principles, position statements and requirements of the following disclosure frameworks, standards and initiatives.

Our approach to responsible production and sourcing standards, including details on some of our relevant memberships, is detailed on our Value chain sustainability webpage.

Materiality assessment

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

Forum on corporate responsibility

To help us engage with our stakeholders and partners and ensure we have access to leading specialist expertise, we regularly seek advice from external experts and forums on sustainability issues.

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Social value

Commodities we produce are essential to everyday life. The benefits they help to create, and how we do this, underpin our purpose and social value.

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