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Monday, Feb. 15, 2016

Promoting Transparency

BHP Billiton improves investor relations with operations

BHP Billiton improves investor relations with operations

From worst to first, and holding steady.

When the Investor Environmental Health Network created a scorecard in 2013 rating the transparency of the largest oil and gas companies, BHP Billiton came in last place.

That score was a wake-up call that spurred the company to action, and for the last two years in a row, BHP Billiton has instead ranked first on the list.

“We have just been recognized from a national investor relations group as No. 1 in the industry for transparency and disclosure around hydraulic fracturing operations,” Tommy Clark, head of corporate affairs, said at a community stakeholders meeting Jan. 27.

“We think it’s important for you to understand that you have an operator here in the Haynesville Shale that operates responsibly, safely and is concerned about the environment and the citizens that make up the community.”

BHP Billiton’s purpose is “to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources.” Its global headquarters is located in Australia.

Clark said the IEHN represents about $100 billion of assets and created the scorecard in order to determine which companies inspired the most confidence for investors.

“They said, ‘We’re not quite sure how the people that we’re investing our money with are managing their risk,’” Clark said.

“When you’re dealing with investors that are dealing with large sums of money, they want to make sure their money is being safely managed, and they are investing in companies they feel are managing that risk responsibly.”

BHP scored low on the first scorecard because it did not have the details in its public reporting that IEHN was looking for, Clark said.

“We wrote a specific case study … that basically takes everything in their scorecard, and we did a big internalization of that by corralling a ton of internal experts,” he said.

“We published this case study the following year, and our score went from dead last to first.”

Not only has the company come in first on the list the past two years, but it has improved its score while the bar has been set higher by IEHN. In 2014, BHP scored 18 out of 35 points; in 2015, the company scored 32 out of 39 points.

“This put us ahead of a lot of our peer companies, a lot of companies that we’ve worked closely with from time to time,” Ed Mongan, senior manager, environment and regulatory, said. “All companies are moving their scores up; we’re not the only ones working on this, so it takes some work to try and stay ahead of the pack.”

During the stakeholders meeting, Mongan presented a report showing the company’s disclosure priorities, including toxic chemicals in frac fluids, well integrity, water and waste management, air emissions and community engagement.

“The investors are interested in those things that differentiate companies, they want to invest in companies that they can have a lot of confidence are going to do the right thing, they’re going to be out there practicing good safety, good environmental stewardship, so they take that information and they want to be able to report to the investors that this is a good company to put your money behind,” Mongan said.

“I think a lot of those are the same things that communities are interested in – if you take a community like Haynesville Shale, Shreveport, our operations are very much in line with the community, so it’s very important that they understand we are looking out for the safety of the community and environment.”

Ensuring it has the community’s trust is essential to BHP, Clark said, and engagement between the company and community is “a two-way street.”

Clark said he wanted to make sure it was known that the company has an outlet for citizens to provide their own comments.

“We have a process that if the community or any citizen in the community has a complaint or concern about our operations, there is a number to call,” he said. “That’s a big component for us.”

The hotline number to voice concerns is 1-844-220-1715, or comments can be emailed to communityconcerns.na@ bhpbilliton.com.

The company’s focus on community involvement also extends to bettering the community by partnering with local agencies, Clark said.

“We are purposeful in how we improve the quality of life in communities where we operate,” he said.

Factors affecting quality of life include healthcare, education and poverty, Clark said.

“There are a lot of health concerns around the world and right here in Shreveport- Bossier, and that’s one of the reasons we have partnered with the Y and others, the food bank …” he said. “We have a lot of fertile ground to work with, a lot of good opportunities as a community to work together.”.

–Sarah Crawford

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