Page 311 - Annual Report 2020

Climate Change related metrics
We recognise the impacts of climate change may impact BHP in a range of areas (refer to section 1.5.4 for more information). Climate-
related risks include the potential physical impacts of acute and chronic risks, and transition impacts arising from the transition to a lower
carbon economy. Our climate change SPMs help us monitor our climate change commitments (refer to section 1.7) to mitigate the risks Strategic Report
and potential impacts associated with climate change to BHP, as well as fulfil our regulatory reporting obligations. The SPMs allow the
Board, management, investors and other stakeholders to measure BHP’s performance against these commitments.
Reference and SPM Methodology
Section 1.7.8 Climate Definition
change and section 6.6.4 Energy means all forms of energy products where ‘energy products’ means combustible fuels, heat, renewable energy,
Climate Change – electricity or any other form of energy from operations that are owned or controlled by BHP. The primary sources of
performance data energy consumption come from fuel consumed by haul trucks at our operated assets, as well as purchased electricity
– Operational energy used at our operated assets.
consumption
Energy consumption has been calculated on an operational control basis in accordance with mandatory minimum
performance requirements for HSEC reporting, which are in line with the World Resources Institute/World Business
Council for Sustainable Development guidance and are measured in terawatt-hours or petajoules (measurement unit Governance at BHP
specified in the relevant table).
Calculation methodology
The energy figures are calculated using the activity data collected at our operated assets. Activity data is multiplied
by an energy content factor (where necessary) to derive the energy consumption associated with a process or an
operation. Examples of activity data include, kilowatt-hours of electricity used or quantity of fuel used. Energy content
factors are sourced from the regulations and guidance specified in Scope 1 and Scope 2 GHG emissions calculation
methodology below. All other energy figures in section 1.7.8 are derived from the approach specified above with further
information detailed in the footnotes.
This methodology has been prepared in accordance with GRI standard 302-1.
Section 1.4.8 Sustainability Definition
KPIs, section 1.7.8 Climate Scope 1 greenhouse gas emissions are direct emissions from operations that are owned or controlled by BHP, primarily Remuneration Report
change and section 6.6.4 emissions from fuel consumed by haul trucks at our operated assets, as well as fugitive methane emissions from coal
Climate change – and petroleum production at our operated assets. Scope 1 refers to direct GHG emissions from our operated assets.
performance data
– Operational GHG Scope 2 greenhouse gas emissions are indirect emissions from the generation of purchased or acquired electricity,
emissions, Scope 1 GHG steam, heat or cooling that is consumed by operations that are owned or controlled by BHP. Our Scope 2 emissions
emissions – Scope 2 GHG have been calculated using the market-based method using supplier-specific emission factors unless otherwise specified.
emissions Scope 1 and 2 emissions have been calculated on an operational control basis in accordance with mandatory minimum
performance requirements for HSEC reporting, which are in line with the Greenhouse Gas Protocol definitions and are
measured in tonnes of carbon dioxide equivalent, and in line with the Greenhouse Gas Protocol Corporate Accounting
and Reporting Standard and the Greenhouse Gas Protocol Scope 2 Guidance.
Calculation methodology
The emissions figures are calculated using the activity data collected at our operated assets. Activity data is multiplied Directors’ Report
by an energy content factor (where necessary) and emission factors to derive the energy consumption and GHG
emissions associated with a process or an operation. Examples of activity data include kilowatt-hours of electricity
used or quantity of fuel used.
Energy and Scope 1 emissions for facilities already reporting to mandatory local regulatory programs are required to
use the same emission factors and methodologies for reporting under BHP’s operational control boundary. This ensures
a single emissions and energy inventory is maintained for consistency and efficiency. Local regulatory programs were
applicable to the majority of BHP’s Scope 1 emissions inventory in FY2020 (operational control boundary), as listed in
the table below. A local regulatory program in this context refers to any scheme requiring emissions to be calculated
using mandated references (e.g. the Green Tax legislation in Chile, which requires emissions to be calculated using the
Intergovernmental Panel on Climate Change (IPCC) factors) or mandated emission factors (e.g. the Australian National
Greenhouse and Energy Reporting (NGER) Scheme or US EPA GHG reporting program, which publish factors specific to the
programs). In the absence of local mandatory regulations, the Australian NGER (Measurement) Determination has been set
as the default source for emission factors and methodologies for consistency with the majority of the emissions inventory. Financial Statements
Asset Location Local regulations
BMA, BMC, NSW Energy Coal, Olympic Australia National Greenhouse and Energy
Dam, Nickel West, WA Iron ore, Reporting Scheme
Petroleum – Australia
Escondida, Pampa Norte Chile Green Tax legislation
(referencing IPCC factors)
Petroleum – Gulf of Mexico USA US EPA GHG reporting program 6
Potash Canada Canada Canadian Greenhouse Gas Reporting
Program (referencing IPCC factors)
Petroleum – Trinidad Trinidad None
Scope 2 emissions totals are reported using the market-based method (default calculation approach unless otherwise
stated) and the location-based method, as recommended by the GHG Protocol Scope 2 Guidance. Definitions of Additional information
location and market-based reporting used in BHP’s accounting are consistent with the Greenhouse Gas Protocol
terminology as follows:
• Market-based reporting: Scope 2 GHG emissions based on the generators (and therefore the generation fuel mix from
which the reporter contractually purchases electricity and/or is directly provided electricity via a direct line transfer).
• Location-based reporting: Scope 2 GHG emissions based on average energy generation emission factors for defined
geographic locations, including local, subnational, or national boundaries (i.e. grid factors). In the case of a direct line
transfer, the location-based emissions are equivalent to the market-based emissions.
For facilities where market-based reporting is required, electricity emission factors are sourced directly from the
supplier in the first instance. An emission factor in the public domain, which is specific to the generation plant Shareholder information
supplying the facility, is considered equivalent to a supplier-specific factor in this context.
Where supplier-specific factors are not available, a default emission factor for off-grid electricity is used instead,
as published in local regulations or industry frameworks (or the default off-grid electricity emission factor from
the Australian NGER (Measurement) Determination) in the case where no local default is available.
The location-based method is applied using electricity emission factors for the relevant grid network, as sourced from
local regulations, industry frameworks or publications from the local grid administrator.
These methodologies have been prepared in accordance with GRI standard 305-1 and GRI standard 305-2.
All other emission figures in section 1.7.8 are derived from the approach specified above with further information
detailed in the footnotes. More information on the calculation methodologies for other reported categories, boundaries
assumptions and key references used in the preparation of our Scope 1 and Scope 2 emissions data can be found in the
BHP Scope 1, 2 and 3 Emissions Calculation Methodology, available at bhp.com/climate.
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