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Ethical sourcing, meeting climate change goals and creating an inclusive workforce are not only right, they are good for business, according to BHP group procurement officer Sundeep Singh. 

Mr Singh told the International Mining and Resources Conference (IMARC) in Melbourne that prioritising these principles across its entire supply chain was critical for the mining giant’s business operations.

Good principles are good for business, says BHP boss

On the issue of climate change, Mr Singh highlighted the company’s world-first tender earlier this year for LNG-powered vessels for its maritime transport operations as it works towards a goal of net-zero operational emissions by 2050.

“If shipping were a country it would be the sixth-largest emitter of CO2 in the world, with more emissions than Germany or Canada,” Mr Singh said. 

When it comes to ethical sourcing, Mr Singh said that BHP was continually reviewing and assessing its supply chain, applying the framework established through its own Human Rights Centre of Excellence and Global Contract Management System. 

“No-one wants to work with unethical suppliers. Having high-risk partners is ultimately expensive for everyone and represents significant exposures. Human Rights violations are the furthest anyone could possibly be from shared value,” he said.

“Through the system, we know that 96 per cent of our direct suppliers are concentrated in 10 countries. 

According to Verisk Maplecroft’s Modern Slavery Index 2019, only two per cent are based in high-risk countries. 

“We then work with a third-party auditor to conduct reviews across a range of labour conditions, including wage and working hours, workplace health and safety issues, environmental conditions and the frameworks in place to manage these risks,” Mr Singh said.

The company set itself a goal in 2016 to be gender-balanced by 2025. Three years ago, women made up 17.6 per cent of its workforce. Today, that number has climbed to 24.5 per cent.

Mr Singh said BHP was working hard with like-minded employment agencies to meet their targets – and the shift was paying substantial dividends.  

Data collected by BHP shows that more inclusive and diverse teams outperform other teams on safety, productivity and culture. 

Examples include a drop of as much as 67 per cent in injury rates and 11 per cent better adherence to schedule.