BHP case study: Strategies for Achieving SDG 8
Question
Task: The purpose of BHP case study is to identify the business strategy that can be adapted by BHP that would help in fulfilling SDG 8.
Answer
1.0 Introduction
1.1 Background of the study
The selected company for the study is a natural resource company, BHP, which is one of the largest multinational mining companies of the world. BHP acquired its name from the city Broken hill and the company got registered in 1885. The company formed at 2001 with the merger of Billiton and BHP private limited (Britannica. 2021). Today, BHP operates under two parent companies and has a worldwide market starting from Singapore to the United States. The firm has over 80 thousand contractors and employees all over the world (BHP. 2021). Thus, the company must strengthen the 8th Sustainable Goal.The idea of SDG8 stands for 'Decent Work and Economic Growth. Economic growth is considered a positive force. Overall economic growth for the world brings more opportunities which can further help to create an ecosystem that is more economically sustainable.Businesses are the source of the creation of job opportunities and economical activities, which can further help with the growth of the society, thus it is important for a business to adapt to SGD8.
1.2 Research objectives The objectives of the study are:
- To understand the actions that can be taken to provide decent work and economic growth for local communities around BHP
- To identify the business strategy that can be adapted by BHP that would help in fulfilling SDG 8
To find out the ways to monitor development towards SDG 81.3 Problem Statement
Containing the idea of SDG 8 can act as a long-term investment for a company. BHP is growing rapidly in the industry. However, to achieve continuous growth while also giving importance to the economical growth of the society, firms like BHP should opt for the method of SDG 8. Opting for SDG 8 will not only help BHP with reconstructing an effective business structure but also will ensure the profit of the company in a long run and ensure that the company reaches its organizational goals more precisely.
1.4 Research Question
1. What specific actions can be taken to provide decent work and economic growth for local communities around BHP?
2. What specific business strategy can be adapted by BHP that would help in fulfilling SDG 8?
3. How development towards SDG 8 can be monitored through success indicators?
2.0 Literature Review
2.1 Targets to achieve decent work and economic growth
In September 2015, world leaders adopted the idea of SDG. At the end of 2015, 17 SDGs were developed by the world leaders to attain sustainable development throughout the world (un.org, 2015). According to studies almost half of the population of the world lives on the equivalent of 2 dollars in various parts of the world. Also, in these parts of the world, getting a job is not enough to escape the grasp of poverty. Also, at the time of the development of SDG in 2015, it was predicted that almost 212 million people in the population will be jobless by the time of 2019 for the lack of any kind of contract (Sdgcompass.org. 2015). Thus, to change the situation of employment and to ensure the growth of the overall economy, a list of targets to fulfil by the year 2030 was brought to light by world leaders.
According to one of the reports developed by the International Labor Organization, there are 12 specific targets that are needed to be fulfilled to achieve the proper economical growth and to make decent work opportunities available. One of the targets of SDG8 is the productive and decent employment of men and women irrespective of their ages, which is considered as an agenda of 2030. This brings the question of another target which is eliminating the non-employment issue of the youth of the world by the time of 2020. A business also needs to improve the efficiency of its use of resources, by minimizing the use degradation of the environment. This is considered a target that businesses need to fill by the year 2030.
The other targets that a company needs to achieve by the time of 2030 are equal pay across the organization irrespective of the gender of an individual and promoting sustainable and beneficial tourism. Taking immediate steps against the recruitment of children and the concept of child labour can also be considered as a target that needs to be fulfilled by the end of the year 2025 (globalgoals.org, 2021). Other than these targets there are also several other targets that need to be fulfilled which are universal accessto banking, securing labour rights, and promoting various policies to ensure the availability of job opportunities.
2.2 Strategies adopted by other companies to achieve sustainability
There are several mining companies like BHP in the mining industry that has opted for the strategies to SDG8. Mining companies like South32, Riotinto and Newcrest has adapted to various strategies for the betterment economy. By the targets of SDG-8, it is important for a company to protect its labour rights. According to the words of the CEO of Newcrest Mining Limited, the company has developed several policies over the years regarding human rights to maintain a safe and ethical operation (Newcrest. 2021). Managing resources while also respecting the environment is also necessary according to SDG8. From the words of another mining supply chain Riotinto, the company has developed a strategy of having fossil fuel-free production in 2018 (Riotinto, 2021). Another competitor of BHP, South32 has also developed strategies to improve the economic structure by providing direct employment in the company by proper payment of government taxes (South32, 2021).
2.3 Importance of sustainable development goal in relation to mining companies
By adapting strategies for the sustainable development goals, not only the companies will be beneficial but the global ecosystem will be beneficial too. Companies like South32 and Riotinto adapting for the production of energy more efficiently has created a long-term effect. From the study of Rogelj (2013), it has been identified that maintaining the strategy of efficient energy development till 2030 can keep the environmental temperature cooler by 2 degrees. Other than these benefits, maintaining these strategies will also help with ending poverty on a large scale, achieving gender equality, maintaining sustainable use of oceans and water, building a stronger infrastructure and continuous industrialization and a more innovative culture.
3.0 Methodology
3.1 Research Philosophy
In the study, a positivist philosophy has been used. This type of philosophy is highly structured and supports the use of factual data. With the use of a positivism philosophy, evaluation of the use of business strategies has been made easier toanalyse (Marsonet, 2019).
3.2 Research Approach
In this study, a deductive approach has been taken for the analysis of the data. In the deductive approach, the analysis is done from qualitative data.It also supports the use of secondary data. The analysis is done in a more specialized contextual manner.
3.3 Data Collection Methods
In this study, the collection of various secondary data of the mining industry and the strategies developed by the companies is done. From the words of Johnston (2017), it can be assessed that the accessibility of the secondary data is quite easy, as it is publicly available. Also, the variety of secondary data is huge. Secondary data also helps to generate new perspectives from the previous data. Secondary data that are publicly available has been used for this study, which includes analysis of SDG8 and analysis of the mining industry.
3.4 Data Collection Analysis
Qualitative data analysis has been conducted in the study, with the collection of secondary data. This type of analysis helps to distinguish the strategies taken by the companies to maintain a sustainable goal that has been developed by the UN. The method of qualitative analysis depends on the experience of researchers. However, the approach of qualitative analysis is not based on statistical research.
3.5 Rationale
The positivist philosophy and the deductive approach that has been selected for this study, will enable the research in deducing the factual data and as the deductive move from general to specific, it will become easier for the study to determine the extent to which the adopted strategies by the selected firm in the study is appropriate for achieving the set goal by the UN. Additionally, the use of secondary research has made the process of data gathering easier and at the same time authentic.
4.0 Data Findings and Analysis
Theme 1: Sustainability control strategies used in BHP
BHP has claimed to be dedicated to conforming to all the applicable laws and regulations concerning the environment, safety, health and community impacts in all the nations where they operate, and to exceeding them where they are less stringent than our standards. The Director Board of BHP oversees their sustainability approach. They have oversight of the environment, safety, health and community matters and have constant governance and monitoring over them (BHP, 2020). Their efficient Internal Audit and Advisory team keep a constant check upon the efficacy and strategy of their sustainability processes, producing comprehensive management policies, addressing any recognized gaps.
BHP has set proper workplace safety, community and environment principles for their operating assets and are constantly monitoring their enforced application. All their appointed contractors employed at their operation sites need to comply with their requirements and standards (BHP, 2020). They also seek to ensure that their agents, workers, service benefactors follow the same workplace standards and business practices as they do. There are also rules about third-party assertion providers visiting any selected operation sites for evaluating their sustainability approach and ensuring that they truly represent their actions and commitments.
BHP’s long-term and continuing assurance to sustainability has been defined in their Charter and realised through their Requirements standards. According to Baumann &Winzar (2020), their standards being the minimum compulsory performance requirements, providing a foundation to their systems of management at their operation sites. Those standards are designed efficiently enough to maintain and endorse health factors, without disrupting the environment, in everything they do (BHP, 2020). It also takes into consideration the investments they put in different communities and countries where they operate, including components of sustainable development and solid risk management.
They even have civic sustainability performance commitments and targets, claiming to improve their enactment, transparency and responsibility. BHP also claims that they operate on their sites, being a partner to that community, sharing stewardship of the surroundings, supporting indigenous cultures and helping them to progress in financial development. For ensuring the fact that they reflect social value in their business and decision-making at every level, they have put requirements involving social value in their annual corporate planning development for their operating assets.
At BHP, they have made social value their priority and they consider social value at every step of their decision making. Abiding by the social norms has been entrenched at least in their five-year business plan, for now. From the subordinates to the CEO, they are all focused on delivering this strategy (BHP, 2020). They have even introduced scorecards to give incentives to employees, after assessing their work based on following social values. For generating social value, BHP's sustainability management works on prioritizing the safety and health of their workers, maintaining responsibility to the environment, upholding Human Rights and lending support to the communities where they function.
Theme 2: Ways the competitor of BHP is adopting sustainability in their process
Rio Tinto, the biggest competitor of BHP, have put efforts and taken steps to engage, understand and partner with their important investors for creating a mutual and sustained value. They have claimed that the SDG-8 expresses their ideals and priorities, of making an inclusive operational environment, promoting education, helping in skill development and gradually moving towards economic and social development (Rio Tinto, 2020). They are on a mission to support indigenous people, socially backward groups by providing them opportunities for employment and training them with essential skills.
Oil States, another leading mining company, in their 2020 Corporate Sustainability Report has presented that they have conducted themselves with the highest moral standards and truthfulness. They have prioritized the protection of the safety and health of their entire workforce while keeping in check any destruction to the environment (Taylor, 2021). According to one of the reports developed by the Oil States they are focusing on being inclusive and supporting the local communities, providing them leadership, leaving helpful and lifelong impressions, and establishing a sustainable company position for the long term.
Tronox Mining Corporation, on the other hand, has taken the initiative of developing teamwork with effective collaboration, open communication, engaging in honesty and treating every employer respectfully. This approach helps in promoting sustainability, both inside and outside the company (Tronox, 2020). They have put control and limitations on their operations in the surrounding environment, increasing productivity and ensuring their customer's proper sustainable value in their resource chains. They think that their efforts of social responsibility will increasingly support their appeal to businesses in the future and that addressing sustainability issues together with their customers will lead to more efficient and quick solutions for it.
Theme 3: Measures that BHP can adopt to monitor their progress related to the meeting of SGD 8
The SDG8 deals with "Decent Work and Economic Growth – Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all". BHP can certainly take more initiatives to fulfil Sustainable Development Goal 8 more prominently. BHP can make more appointments of labourers from various local indigenous groups, which will lead to more employment, resulting in more output of the company, opening of more mining sites due to increasing the number of workforces and of course, the growth of the economy (globalreporting.org, 2020). If members from the socially backward and financially poor classes join the labour force of BHP, it will be both beneficial for the company and the employers.
People who have been unemployed due to lack of education or lack of opportunity can at least survive with adequate finance and employment. It is easier for the mining industry to appoint a less educated or uneducated workforce because they have many labour related positions, which does not require education. Also, for the proper fulfilment of SDG8, BHP should propagate ways to provide more training, skills and education to its employees, who are in need of them. They should give a proper lookout for not employing any children in their workforce and help in eradicating child labour (globalreporting.org, 2020).
Upholding labour rights and promoting safer work conditions for the workforce shall be a milestone achievement in meeting SDG8. When the labourers and employees are happy working at BHP and feel safe under their leadership, the annual output will be naturally more proficient, further adding to economic growth. Providing incentives or rewards to the workforce for motivating them in their work shall be fruitful too. Giving the labourers a full guarantee of health insurance is a must as there are many life risks involved in the mining industry. Another strong side they can look into is appointing women labourers. This will also disperse gender inequality and provide employment opportunities to women and also give a boost in their output due to more workforce. Equal pay should be given to both women and men for the same work they do.
5.0 Discussion
As already discussed earlier, the UN induced SDG 8 is of much significance to all the companies of the mining industries. BHP is no exception to this fact. They have made it possible to reconstruct an effective business structure, keeping in mind the targets of SDG 8 like economic growth, sustainability of the environment and adhering to social values.
The UNSDGs (SDGs) are aimed at the improvement of the welfare of present and future generations. The 17 UNSDGs endorse sustainable development for dodging the world's most crucial challenges. BHP has recognised its ability to achieve broader communal goals with its shareholders, promoting mutual profit. They have acknowledged the fact that their company activities do create adverse impacts on the environment and to fulfil the targets of SDGs, they need to consider and look into their ways of doing business (BHP, 2020). SDG8 points out the fact that no positive contribution of one company should have negative impacts on others, be it the environment or labourers or any other company. This is further supported by the report developed by the International Labour Organization. It has been assessed that even the report of ILO mentions that SDG 8 aims to mitigate poverty by supporting employment (Ilo.org, 2021).
As it has already been mentioned earlier about the importance of opting for a more efficient and environmentally friendly power production system, the same procedure could be seen being adopted by the company Rio Tinto, which has developed a certain technology that can enable the smelting process of aluminium, totally free of direct GHG emissions (Riotinto, 2020). They have worked progressively towards building an economy having low-carbon and products like smartphones and electric vehicles. Rio Tinto has even claimed to be working with indigenous blueberry farmers in Canada to create a nontoxic and operative fertiliser made from waste generated from their aluminium operations.
BHP is also implementing ways to re-process and diminish discarded mineral waste, consisting of tailings (BHP, 2020). They have taken the initiative to process electricity from low-carbon renewable energy and are discovering innovative ways to work with patrons and associates to manage and naturalize land and strengthen sustainable conservation as well to escalate the sustainable management of forests (BHP, 2020). BHP has implemented the strategy to obtain the greatest competencies, best commodities and finest resources, to generate high returns and long-term value. They are of the opinion that the enduring health of their business is dependent on the long-term health of humanity and a sustainable natural environment.
6.0 Conclusion
After completion of the study, it can be concluded that the significance of SDG8 is crucial in the improvement of the overall economic standpoint of the world. There are several targets of SDG8 that have been developed by world leaders. By pursuing these targets, a business industry like a mining industry will not only be beneficial but also will further help eliminate the issue of poverty, gender equality and the longevity of the environment. There are companies like BHP who have also opted for various strategies to improve the ecosystem, which will lead the economy towards a healthier position by 2030.
7.0 References
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