Page 341 - Annual Report 2020

Scope 2 greenhouse gas emissions UKLA (United Kingdom Listing Authority)
Scope 2 greenhouse gas emissions are indirect emissions from Term used when the UK Financial Conduct Authority (FCA) acts as
the generation of purchased or acquired electricity, steam, heat the competent authority under Part VI of the UK Financial Services
or cooling that is consumed by operations that are owned or and Markets Act (FSMA). Strategic Report
controlled by BHP. Our Scope 2 emissions have been calculated Underlying attributable profit
using the market-based method using supplier specific emissions
factors unless otherwise specified. Profit/(loss) after taxation attributable to BHP shareholders
excluding any exceptional items attributable to BHP shareholders
Scope 3 greenhouse gas emissions as described in note 3 ‘Exceptional items’ in section 5. Refer
Scope 3 greenhouse gas emissions are all other indirect emissions to section 6.1 for further information.
(not included in Scope 2) that occur in BHP’s value chain, primarily Underlying EBIT
emissions resulting from our customers using the fossil fuel
commodities and processing the non-fossil fuel commodities we Underlying EBITDA, including depreciation, amortisation
sell, as well as upstream emissions associated with the extraction, and impairments. Refer to section 6.1 for further information.
production and transportation of the goods, services, fuels and Underlying EBITDA
energy we purchase for use at our operations; emissions resulting Earnings before net finance costs, depreciation, amortisation Governance at BHP
from the transportation and distribution of our products; and and impairments, taxation expense, Discontinued operations and
operational emissions (on an equity basis) from our non-operated exceptional items. Refer to section 6.1 for further information.
joint ventures. Unit costs
Seawater One of the financial measures BHP uses to monitor the performance
Water from oceans, seas and estuaries. of individual assets. Unit costs are calculated as ratio of net costs of
SEC (United States Securities and Exchange Commission) the assets to the equity share of sales tonnage. Net costs is defined
The US regulatory commission that aims to protect investors, maintain as revenue less Underlying EBITDA excluding freight and other
fair, orderly and efficient markets and facilitate capital formation. costs, depending on the nature of each asset. Petroleum unit costs
exclude exploration and development and evaluation expense and
Senior manager other costs that do not represent underlying cost performance Remuneration Report
An employee who has responsibility for planning, directing or of the business; Western Australia Iron Ore, Queensland Coal
controlling the activities of the entity or a strategically significant and New South Wales Energy Coal unit costs exclude royalties;
part of it. In the Strategic Report, senior manager includes senior Escondida unit costs exclude by-product credits.
leaders and any persons who are directors of any subsidiary WAF (Water Accounting Framework)
company even if they are not senior leaders.
Shareplus The Water Accounting Framework is a common mining and metals
industry approach to water accounting in Australia.
All-employee share purchase plan. Water quality – Type 1
Social investment
Voluntary contributions to support communities through cash Water of high quality that would require minimal (if any) treatment Directors’ Report
to meet drinking water standards. This water is considered high
donations to community programs and associated administrative quality/high-grade in the International Council on Mining and
costs. BHP’s targeted level of contribution is 1 per cent of pre-tax Metals (ICMM) ‘A Practical Guide to Consistent Water Reporting’.
profit calculated on the average of the previous three years’ pre-tax
profit as reported. Water quality – Type 2
South32 Water of medium quality that would require moderate treatment to
meet drinking water standards (it may have a high salinity threshold
During FY2015, BHP demerged a selection of our alumina, of no higher than 5,000 milligrams per litre total dissolved solids
aluminium, coal, manganese, nickel, silver, lead and zinc assets and other individual constituents). This water is considered high
into a new company – South32 Limited. quality/high grade in the International Council on Mining and
SPM (sustainability performance metric) Metals (ICMM) ‘A Practical Guide to Consistent Water Reporting’.
The sustainability performance metrics are the metrics used Water quality – Type 3 Financial Statements
to measure and evaluate our sustainability performance. Water of low quality that would require significant treatment to
Strate meet drinking water standards. It may have individual constituents
South Africa’s Central Securities Depositary for the electronic with high values of total dissolved solids, elevated levels of metals
settlement of financial instruments. or extreme levels of pH. This type of water also includes seawater.
Surface water This water is considered low quality/low-grade in the International 6
Council on Mining and Metals (ICMM) ‘A Practical Guide to
All water naturally open to the atmosphere, except for water from Consistent Water Reporting’.
oceans, seas and estuaries (e.g. precipitation and runoff, including WRSA (Water Resource Situational Analysis)
snow and hail), rivers and creeks external water dams.
Third party water A situational analysis is an analysis of the water resources and
catchments that the operated asset interacts with, including
Water supplied by an entity external to the operational facility. Third assessment of: (i) the sustainability of the volume and quality
party water contains water from the other three sources. When the of the water resources taking into account interactions of all other Additional information
source is known, the physical source (surface water, groundwater parties and climate change forecasts; (ii) BHP’s direct, indirect and
and seawater) should prevail. Our disclosures have allocated all cumulative impacts on the sustainability of the volume and quality
third party water withdrawals to the physical source. of the water resources and any related environmental, social or
TRIF (Total recordable injury frequency) cultural values, taking into account climate change forecasts in
accordance with the Water Management Standard; (iii) the state
The sum of (fatalities + lost-time cases + restricted work cases of water infrastructure, water access, sanitation and hygiene of
+ medical treatment cases) x 1,000,000 ÷ actual hours worked. local communities; (iv) the environmental health of the water
Stated in units of per million hours worked. BHP adopts the US catchments that feed the water resources taking into account the Shareholder information
Government Occupational Safety and Health Administration extent of vegetation, runoff, and any conservation of the area; (v)
guidelines for the recording and reporting of occupational injury external water governance arrangements and their effectiveness.
and illnesses. TRIF statistics exclude non-operated assets.
TSR (Total shareholder return)
TSR measures the return delivered to shareholders over a certain
period through the movements in share price and dividends paid
(which are assumed to be reinvested). It is the measure used to
compare BHP’s performance to that of other relevant companies
under the Long-Term Incentive Plan.

BHP Annual Report 2020 339