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Question:
Discuss about the CSR Audit of BHP Billiton.
 
 
Answer:
Introduction

BHP Billiton is one of the leading petroleum, mining and metals company having its headquarter is Melbourne, Australia. The organization is named the largest mining company in the world in the year of 2015 along with the fourth largest company in Australia in terms of revenue. To maintain its success or image in the corresponding industry of operation, an organization like BHP Billiton focuses a lot of effort on the corporate social responsibilities in its business model. These corporate social responsibilities define the activities that the organization does for the wellbeing of the community and the corresponding society of operation. The presence and completion of these corporate social responsibilities allow the organization to maintain its leadership in the corresponding industry. The corporate social responsibilities also allow the organization to achieve its goals in an efficient manner through the positioning of the brand with a positive image among the individuals and organizations present in the corresponding markets. This report focuses on the corporate social responsibilities of BHP Billiton and analyzes these responsibilities in terms of their presence in the business model and operational model of the organization. Along with the analysis of the CSR activities done by BHP Billiton, the report also analyzes the discrepancies between the claims that the organization makes for its CSR activities and the actual corporate practices of the organization for its corporate social responsibilities (Lodhia, 2014).

Scope of engagement

As mentioned earlier, the scope of the report is to define the corporate social responsibilities in the business and operational model of the organization along with the analysis of these responsibilities held by BHP Billiton. The report also analyzes the extent or significance of the corporate social responsibilities in the business model of BHP Billiton along with their involvement in the vision and strategies of the organization. The report also analyzes whether these corporate social responsibilities of BHP Billiton are measurable to certain extent along with their positive impacts on the performance of the organization and the society in which the organization operates in (Jamali, 2015). Then the intention of the report is to identify and analyze the discrepancies between the corporate social responsibilities defined in the business model of BHP Billiton and the actual corporate practices of the organization to carry these responsibilities out. The report also includes some recommendations to improve the corporate social responsibilities of the organization along with the CSR practices and their effectiveness. The report is presented to the management of BHP Billiton as an end-to-end analysis of their current CSR activities and potential rooms for improvement in these business processes in the form of a CSR audit of the organization (Mayes, 2013).

 
Corporate Social Responsibilities (CSR)

The corporate social responsibilities are considered to be the way for the organizations to give something back to the society. These responsibilities of the organizations are defined to allow the organizations to be responsible for the wellbeing of the community and the societies across the corresponding markets of operation. These responsibilities also allow the organizations to have a positive image in the corresponding market of operation, which in turn helps in increasing the sales of the products or services of the organizations. BHP Billiton realizes the significance of the corporate social activities and have a number of corporate social responsibilities embedded into the business model of the organization. There are a number of other business benefits of the corporate social responsibilities such as risk management, branding, positioning, strong supplier relations and effective workforce of the organization. BHP Billiton focuses on a number of sectors such as health, economy, education, disaster relief and various charities to achieve its corporate social responsibility goals in the corresponding market of operation. There are a number of organizations in the industries across the globe, who claim to carry out a number of CSR activities, but fail to complete these corporate social responsibilities in the real world. This report analyses these claims of BHP Billiton of the CSR activities with the actual real-world corporate activities of the organization (Mayes, 2015).

BHP’s CSR commitment

As mentioned earlier, BHP Billiton focuses on a number of sectors of the societies across the world to achieve its goals and objectives for the corporate social responsibilities. Some of these sectors are education, healthcare, disaster relief and economic development, which are mentioned in this section of the report (Price, 2015).

CSR claims embedded in BHP’s vision and strategic documents

The business strategy of BHP Billiton is to contribute to the development of the society along with the manufacturing and distribution of high quality products and services.

Community investment

The business strategic documents of BHP Billiton claim that the business model of the organization puts a lot of focus on the community investments in order to make the lives of the individuals in the corresponding communities better.

 
Economic development

The business processes of the organization aim at the effective development of the economic condition of the host country through the business activities of the organization. The business model of BHP Billiton supports the local businesses for a number of its business processes, which in turn leads to the development of the economic condition of the local market (Billiton, 2014).

Education

BHP Billiton has been active in the education and training industry for quite some time. The organization includes the contributions to the educational institutions in the rural places in the corresponding market of operation in its business model and trains the individuals in the corresponding societies in various useful skills. These trainings allow the individuals to have a source of employment for them (Northey, 2013).

Health

BHP Billiton also organizes a number of initiatives to enhance the health of the individuals present in the corresponding market of operation. ‘Swim and Survive’ is such an initiative started by BHP Billiton to allow the children in the corresponding societies to participate in for various competition, which in turn also allow the children to have better health (Saunders, 2015).

Environmental contribution

This is another section of the CSR activities carried out by BHP Billiton, which allows the organization to contribute for the wellbeing and betterment of the environment of the market of operation.

Greenhouse gas emissions

The organization also focuses on minimizing its greenhouse gas emissions and energy usage of the processes of manufacturing the products. The organization has created a number of initiatives as part of its business strategy to minimize the emission of the greenhouse gases along with the efficient utilization of energy (Su, 2013).

Measurability of these claims

Some of these claims of BHP Billiton can be measured to a certain extent based on the type of contribution to the society. Some of these measurements of the CSR activities of the organization are mentioned in this section.

Economic development

The contributions of BHP Billiton can be measured in terms of the sales and revenue generation figures of some of the initiatives that the organization started. The BMA local buying program of BHP Billiton allowed 372 businesses to be registered in the program, which in turn created 1910 work opportunities in the local market resulting with 25 million USD of revenue locally. The World-Class supplier program launched by BHP Billiton in the year of 2012 in Chile had more than 5000 individuals generating over 4000 million USD of sales, which in turn led to the strengthening of the Chilean economic condition (Billiton, 2012).

 
Education

The educational and training contributions of BHP Billiton can be measured in terms of the below mentioned facts. BHP Billiton has been a part of the growing academic partnership with more than 30 Chinese universities, which opens up a large number of educational opportunities. BHP Billiton has also been a part of the ‘Chile before Chile’ initiative to fund the activities of gathering valuable artifacts and preserving them in the Chilean museum of pre-Columbian art to educate people about the indigenous culture and history of Chile. BHP Billiton also contributed 10$ dollars to the Australian Indigenous Education Foundation (AIEF) for funding 90 scholarships in the year of 2014 (Fonseca, 2014).

Greenhouse gas emission

This claim of the BHP Billiton can be measured in terms of the total amount of the gases emitted by the business processes each year. The total amount of greenhouse gas emissions of BHP Billiton was 38.3 million tons in the year of 2015. This count suggests that the GHG emission reduced 6% from 2014, which in turn proves the active contribution of the organization to this CSR activity (Billiton, 2014).

Positive impact of BHP’s CSR policy

The CSR claims embedded in the vision and strategic documents of BHP Billiton were mentioned in the previous section. These CSR activities of the organization are carried out through an effective implementation of a CSR policy, which in turn allows the organization to have a number of positive impacts on the society. The contribution of the organization to the economic condition of the local market is leading to the strengthening of a number of less-developed or developing countries along with the enhancement of the standard of living of the individuals staying in the corresponding society. The educational and healthcare contributions of the organization are also responsible for making the lives of the individuals in the corresponding societies better in terms of the standard of living and the quality of their lives. The minimization of the GHG emission is also responsible for making the environment less polluted, which in turn is decreasing the global warming issue (Browne, 2013).

Discrepancies between communicated intention and corporate practice

The claims made by BHP Billiton for their corporate social responsibilities are included in the vision and strategic documents of the organization. There aren’t a lot of discrepancies between these claims made by the organization and the actual corporate practices. As mentioned in the previous sections, we have enough data to analyze these CSR activities of the organization. This analysis reveals that the organization is contributing or carrying out the CSR activities to an acceptable significance and with acceptable effectiveness (Onn, 2014). The organization has a number of open initiatives in the corresponding markets of operation, which allows the organization to minimize the gap between the intended CSR activities and the actual corporate practices.

 
Recommendations

As mentioned earlier, the analysis of the CSR activities and objectives of BHP Billiton are being carried out efficiently by the organization in the corresponding markets of operation. This section mentions a number of recommendation, which the management of the organization can consider for enhancing the CSR activities and their effectiveness in the corresponding markets.

  • The organization can focus more on the sustainable development initiatives in order to make the corresponding societies sustainable enough to cater to the needs of the future generations (Paul, 2016).
  • The organization can focus more on the optimization of the usage of the natural resources in its business processes in order to preserve these natural resources, which are facing a threat of getting depleted (Ross, 2016).
  • BHP Billiton can also focus its CSR activities on the contributions to various charities for orphans and elderly people in order to contribute towards the betterment of the corresponding societies along with the enhancement of the brand image in the corresponding markets (Pellegrino, 2012).
  • The organization can focus on publishing public yearly reports for its CSR activities along with the progress of the organization in achieving these CSR objectives. These reports can be designed to include all the CSR activities taken up by the organization along with their effectiveness and positive impacts on the corresponding societies (Bair, 2015).
Conclusion

BHP Billiton is one of the leading organizations in the mining industry with its operations in a number of markets. The organization includes a number of corporate social responsibilities in its vision and business strategies. These CSR activities of the organization mainly focus on its contributions to the community through the healthcare, education and economic sector of the corresponding societies along with the environmental contributions of the organization to minimize the emission of the greenhouse gases and efficient usage of energy (Pepper, 2015). Most of these CSR activities of the organization are measurable in terms of the actual calculations of the contributions made by the organization or the calculations of the positive impacts of the CSR activities of the organization. These CSR activities of BHP Billiton have a number of positive impacts on the corresponding societies of operation. The analysis of these CSR activities of the organization reveals that there aren’t a lot of discrepancies between the claims made by the management and the actual corporate practices of the organization. The organization has been active in the corresponding markets of operation to enhance the effectiveness and efficiency of its CSR activities along with taking new initiatives to enhance the effectiveness of its business processes (Boiral, 2015). This report focused on the corporate social responsibilities of BHP Billiton and analyzes these responsibilities in terms of their presence in the business model and operational model of the organization. Along with the analysis of the CSR activities done by BHP Billiton, the report also analyzed the discrepancies between the claims that the organization makes for its CSR activities and the actual corporate practices of the organization for its corporate social responsibilities.

 
References

Bair, J., & Palpacuer, F. (2015). CSR beyond the corporation: contested governance in global value chains. Global Networks, 15(s1), S1-S19.

Billiton, B. H. P. (2012). Sustainability. Accessed November, 26, 2012.

Billiton, B. H. P. (2014). BHP Billiton Interim Results: Transcript–Investor Briefing, 18 February.

Billiton, B. H. P. (2014). BHP Billiton results for the year ended 30 June 2014.

Boiral, O., & Henri, J. F. (2015). Is sustainability performance comparable? A study of GRI reports of mining organizations. Business & Society, 0007650315576134.

Browne, J., & Nuttall, R. (2013). Beyond corporate social responsibility: Integrated external engagement. The McKinsey Quarterly, 1-11.

Fonseca, A., McAllister, M. L., & Fitzpatrick, P. (2014). Sustainability reporting among mining corporations: a constructive critique of the GRI approach. Journal of Cleaner Production, 84, 70-83.

Jamali, D., Karam, C., & Blowfield, M. (Eds.). (2015). Development-Oriented Corporate Social Responsibility: Volume 1: Multinational Corporations and the Global Context (Vol. 1). Greenleaf Publishing.

Lodhia, S., & Martin, N. (2014). Corporate sustainability indicators: an Australian mining case study. Journal of Cleaner Production, 84, 107-115.

Mayes, R. (2015). A social licence to operate: corporate social responsibility, local communities and the constitution of global production networks. Global Networks, 15(s1), S109-S128.

Mayes, R., Pini, B., & McDonald, P. (2013). Corporate social responsibility and the parameters of dialogue with vulnerable others. Organization, 20(6), 840-859.

Northey, S., Haque, N., & Mudd, G. (2013). Using sustainability reporting to assess the environmental footprint of copper mining. Journal of Cleaner Production, 40, 118-128.

Onn, A. H., & Woodley, A. (2014). A discourse analysis on how the sustainability agenda is defined within the mining industry. Journal of Cleaner Production, 84, 116-127.

Paul, S. (2016). BHP Billiton reviews Indonesian coal assets. Australia's Paydirt, 1(238), 83.

Pepper, A., McIntosh, P., Fitzsimmons, R., Gebhardt, T., & Dillenbeck, E. (2015, September). The Unconventional Global Endowment: Results of BHP Billiton's Global Assessment. In International Conference & Exhibition.

Pellegrino, C., & Lodhia, S. (2012). Climate change accounting and the Australian mining industry: exploring the links between corporate disclosure and the generation of legitimacy. Journal of Cleaner Production, 36, 68-82.

Price, G. (2015). Spotlight on seeds for BHP Billiton Iron Ore. AusIMM Bulletin, (Jun 2015), 76.

Ross, D. (2016). Corporate Social Responsibility Initiatives in Australia’s Mining Industry: An Applied Stakeholder Approach. In Key Initiatives in Corporate Social Responsibility (pp. 261-278). Springer International Publishing.

Saunders, A. (2015). BHP Billiton winds back China forecast.

Su, R., Yi, R., Hooper, K., & Dutta, A. (2013). Information Spillover, Profit Opportunities, and Return Deviations Analysis: The Case of Cross-Listed BHP Billiton. International Journal of Business and Economics, 12(2), 155.

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