Sustainability Reporting and BHP Billiton: A Critical Review

This report critically reviews BHP Billiton's sustainability reporting practices, referencing several academic articles on corporate accountability, environmental reporting, and corporate social responsibility. It examines the company's 2017 sustainability report, highlighting its commitment to environmental protection, health and safety, and community development. The analysis covers BHP Billiton's sustainability framework, its alignment with international standards like the UN Global Compact, and its performance against set targets in areas such as safety, health, and environmental impact. The report concludes that BHP Billiton effectively undertakes its sustainability practices and transparently discloses its performance, contributing to the protection of the environment and promotion of sustainable business practices.

Running Head: Sustainability Reporting of BHP Billiton
Sustainability Reporting

Sustainability Reporting of BHP Billiton 1
Research paper A
The topic of the first article which has been examined to understand the concept of
corporate accountability is: Corporate accountability in the Samarco chemical sludge
disaster.
This article sets out the real world case of one of the worst disasters occurred in Brazilian
country, which have affected the country to a huge extent. The Samarco chemical sludge
disaster took place in 2015. The two iron ore dams of an extractive country Samarco burst
out in one of the small towns of the country. The disaster had severely affected the lives of
the citizens of the country. This article explains the disaster as the disruption of a society’s
normal functioning. The article further discusses the importance of legal initiatives to
improve the business’s performance towards dealing with the social and environmental
issues. Since, 1980s, various voluntary standards have been introduced for the companies to
enhance and improve their corporate social responsibilities. The article emphasises on the
accountability of multinational and other large sized companies towards the safeguarding of
environment so as to avoid the disasters which arises due to natural disasters as well as man-
made disasters. Also, OCED’s guidelines were introduced in the context of human rights
protections, environmental protection, labour standards etc. These guidelines also provide
sound opportunity to impose pressure on the national environmental regulators to seek
company’s accountability towards sustainable practices. The article is prepared suggests that
if OCED guidelines are followed by the companies, then the negative impact of their
operations could be reduced to a good extent (Da Costa, 2017).
Research Paper B

Sustainability Reporting of BHP Billiton 2
The topic of the second article that has been examined for the purpose of understanding
the concept of corporate governance and environmental reporting is: Corporate
governance and environmental reporting: an Australian study
The main purpose of examining this article is to understand the relationship between the
entity’s environmental reporting and the attributes of corporate governance. The article
suggests that there is a strong positive relation between the extent of company’s
environmental reporting practices and the proportion of company’s total independent as well
female directors. The article also provides that it is quite important for the companies to focus
on their individual impacts on the overall nature and environment. It is also important for the
companies to report about their business practices that supports their corporate social
responsibilities, to the wide group of their stakeholders such as employees, customers,
regulators, communities and the shareholders. The article defines the environmental
reporting as the provision of information related to company’s social, economic and
environmental practices. The article sets out in Australia, reporting on social and
environmental matters is voluntary. However, reporting on such matters have various benefits
for the company such as it creates its sound public image in the market and also it avoids
various legal interventions from the governmental regulators (Kathy, Tilt & Lester, 2012).
Research paper C
The topic of the third article that has been examined for the purpose of understanding
the concept of environmental reporting is: Environmental disclosures in the annual
report.
This article focuses on the concept of legitimacy theory which is based on the belief that in
order to operate smoothly and successfully, companies must act in the best interest of the
society by performing all its functions in the socially accepted manner. It is generally

Sustainability Reporting of BHP Billiton 3
believed that the companies have the key aim of generating satisfactory returns for their
shareholders. However, this article suggests that large companies have to satisfy a large
number of stakeholders in order to survive efficiently. Further, this article explains that the
companies are social creations and hence their existence majorly depends on how willing is
the society is to allow them to operate successfully. Therefore, corporate reporting is the way
by which company can communicate with its stakeholders about its social and environmental
performances so as to keep them satisfied and informed (O’Donovan, 2002).
Research Paper D
The topic of the fourth article that has been examined for the purpose of understanding
the concept of Corporate Social Responsibilities: Alternative Perspectives About the
Need to Legislate.
This is the research article prepared to review the submissions of Australian government in
2005-06 for the inquiry into Corporate Social Responsibility of the company. The article
suggests that the regulations related to Corporate Social Responsibilities as well as
accountabilities must be determined on the basis of market forces of the country. The results
of the research indicate that the business communities in any country favours the anti-
regulation approach of the country under which the companies must be given the flexibility
for the determination of their individual social responsibilities. However, the active
participation of business corporations in the CSR activities is an essential thing for the
country to take moves and initiatives towards its sustainable development and to address the
issues related to social or environmental problems faced by the people of that nation (Deegan,
& Shelly, 2014).

Sustainability Reporting of BHP Billiton 4
SUSTAINIBILTY REPORTING
Introduction:
BHP Billion Limited is Australian company which is listed on the Australian Stock
Exchange. The company is based at Melbourne, Australian and is in existence since 1851. It
is engaged in the business of discovering, acquiring, developing and marketing of natural
resources across the world. BHP Billiton operates through its four main segments. These
segments are: Petroleum, Copper, Coal and the iron core (Bloomberg, 2017). It is indulged in
the activities like potash development; mining, smelting and refinement of nickel. Also, it
deals in provision of financial services and other services like trading, marketing,
administrative and other support services. As BHP Billiton is dealing in the processing of
natural resources, it has to perform its business operations considering its total impact on the
natural environment. Due to its very nature, the company has to duly comply with the
requirements of sustainability reporting. A sustainability report is a comprehensive report
prepared and published by a business organisation to provide the information about its
economic, environmental and social performance, to its stakeholders. To prepare a
sustainability report, a company has to comply with Global Reporting Initiative Guidelines.
Sustainability reporting of BHP Billiton:
From the sustainability report of BHP Billiton, it has been observed that sustainability is the
central part of who the company is and what the company does. The directors of the company
have stated in BHP’s sustainability report that they are firmly determined to bring a positive
difference to the environment in which it operates its business. The company is voluntarily
disclosing its sustainability performance to its stakeholders and it holds itself accountable for
this commitment (BHP Billiton, 2017).

Sustainability Reporting of BHP Billiton 5
The health and safety is company’s top priority. The company gives huge importance to its
sustainability responsibilities and hence it operates in the environment responsible manner. It
also possesses huge values and principles towards safeguarding and respecting the human
rights. The company aims at the development of the local communities to which it belong and
the overall economic development of the country. The company has its own approach to fulfil
its responsibilities towards the society, environment and economy as a whole. In pursuit of its
sustainability requirements, the company has designed its formal statements named as Our
Charter and Our Requirement Standards. The said documents set out the minimum
performance requirements to be achieved compulsorily. The standards of the company in
consistence with the principles and compulsory requirements of International Council of
Mining and Metals’ Sustainable Development Framework, the United Nations’ (UN) Global
Compact, the UN Declaration of Human Rights and the Voluntary Principles on Security and
Human Rights (BHP Billiton, 2017).
Figure 1: BHP's Sustainability Framework
Source: https://www.bhp.com/-/media/documents/investors/annual-reports/2017/
bhpsustainabilityreport2017.pdf

Sustainability Reporting of BHP Billiton 6
The sustainability report of the company is in line with the International Council on Mining
and Metals’ Sustainable Development Framework. BHP Group prepares this report by
following the global reporting initiatives guidelines. As the company is one of the signatory
members of United Nations’ Global Compact (UNGC), its sustainability report as its UNGC
communication in relation to progress of implementation of various principles. This report
also supports the development objectives of the company at the wider level.
The company has voluntarily invested around one of its pre-tax profits, amounting to us $ 2.3
billion to the community program since year 2001. Also, it has made social investments for $
80.1 million towards community development programs and its foundations. Further it had
introduced an e-learning module in 2017 to emphasise on the mental health of its employees.
It has set new target for 2018 to reduce to 50% (in comparison with 2017), the number of
employees exposed to silica and coal dust. However, there is an increase in the occupational
illness of the employees working with the company by 18% in 2017 as compared to 2016 and
that of contractors increased by 23%.
BHP Billiton’s sustainability report for 2017covers its assets which have been possessed by it
during the financial period starting from 1st July, 2016 to 30th June, 2017. These assets include
those assets which are under exploration, the projects that are under development or
execution processes as well as the sites and operations which are closed. The non-operating
joint ventures of BHP Billiton are not included in its Sustainability report. However, certain
key issues in relation to such joint venture.
The company had targeted certain standards to be achieved during the financial years 2013-
2017 and the results of its performance have been included in the current year’s sustainability
report. In terms of safety, health, community, climate change and environment, BHP Billiton

Sustainability Reporting of BHP Billiton 7
has achieved all the targets except a target in relation zero work related fatalities (safety
standard) because it had to face one fatality at its Escondida asset in FY2017.
Figure 2: Employee Fatalities
Source: https://www.bhp.com/-/media/documents/investors/annual-
reports/2017/bhpsustainabilityreport2017.pdf
From the sustainability report of BHP Billiton it has also been observed that the contractors
who are working with the company’s assets are required to duly comply with company’s
health, safety, environment as well as community standards. The company believes that the
strong standards in the areas of governance are must for the creation of enduring value and
for the maintenance of its social licence which is mandatory for its operations.
The sustainability committee of BHP Billiton is entrusted with the function of overseeing the
HSEC standards as well as human right and other legal and regulatory matters. The company
seeks guidance from the external expert parties and forums for the sustainability issues for its
decision making process. Further, the risk management strategies of the company are
designed in such a way that all the significant risks are assessed by considering the potential
impact of its operations on the health, safety, environment as well as its communities. Also,

Sustainability Reporting of BHP Billiton 8
the financial and legal impact of its operations related to the natural resources is kept in mind
by the board of the company at the time of formulation of risk management strategies (BHP
Billiton, 2017).
Figure 3: BHP's Sustainability Goals
Source: https://www.bhp.com/-/media/documents/investors/annual-reports/2017/
bhpsustainabilityreport2017.pdf
BHP Billiton’s Internal Audit Department is responsible for the continuous evaluation of
design as well as effectiveness of company’s sustainability processes in each year.
Conclusion:
After examining the sustainability report of BHP Billiton for the year 2017 and various other
articles in respect of company’s responsibility towards the sustainable development of the
country, it can be concluded that in the modern world, sustainable business practices of the
corporate entities plays vital role in the protection of environment and its constituents. After

Sustainability Reporting of BHP Billiton 9
reviewing the sustainability report of a large international natural resources company BHP
Billiton, it can be said that company is effectively undertaking its sustainability practices tin
order to meet the protection of its health, safety, environmental and social standards and also
it is voluntarily disclosing all the results of its sustainability performances. The companies
which are involved in the significant business operations that have material impact on the
environment must at-least consider their sustainability responsibilities while formulating their
strategies and policies towards the growth and survival in the market where there is intense
competition.

Sustainability Reporting of BHP Billiton 10
References:
BHP Billiton, 2017. Annual Report. Retrieved from:
https://www.bhp.com/-/media/documents/investors/annual-reports/2017/
bhpsustainabilityreport2017.pdf
Bloomberg, 2017. Overview of company’s profile. Retrieved from:
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=256654
Da Costa, K. (2017). Corporate accountability in the Samarco chemical sludge
disaster. Disaster Prevention and Management, 26(5), 540-552.
Deegan, C., & Shelly, M. (2014). Corporate social responsibilities: Alternative perspectives
about the need to legislate. Journal of Business Ethics, 121(4), 499-526.
Kathy Rao, K., Tilt, C. A., & Lester, L. H. (2012). Corporate governance and environmental
reporting: an Australian study. Corporate Governance: The international journal of
business in society, 12(2), 143-163.
O’Donovan, G. (2002). Environmental disclosures in the annual report: Extending the
applicability and predictive power of legitimacy theory. Accounting, Auditing &
Accountability Journal, 15(3), 344-371.