Rewiring social investment

A lot of the debate 10 years ago, on issues to do with human rights, supply chains and transparency, was about the what: what companies should do, what they should commit to, what is a responsible way for the company to spend its money. The way I see it, the differences in views on those issues have narrowed considerably.

Take the mining sector, where 15 years ago it was governments – as regulator and legislator – that solely determined the industry’s license to operate. Since then, the dynamics have changed. With the 24/7 news cycle, and the growing soft power of civil society and organized groups of investors such as pension funds, influence has become more diffuse. Investor and societal pressures have grown and, alongside them, so have the related risks. There’s now a constant interplay between companies, governments, institutions, think tanks, NGOs and civil society organizations through which expectations of what is acceptable and responsible corporate behavior ratchet up.

Once the core principles are established – the what – the most important area and the biggest challenge for leading companies turns to how to implement the commitments the business has made and to get the policy commitments put in place that will be implemented on the ground.

That’s where my role comes in. I’m focused on the how: working in the company on social policy issues, and through the Foundation to deliver global programs that contribute to the sustainable development challenges affecting the resources sector.

Following a strategic planning process, the BHP Billiton Foundation focuses its work in three areas that we have identified as our Global Signature Programs: Environmental Resilience, Natural Resource Governance and Education Equity.

The Foundation has a big aspiration: to raise the bar and play a role in shifting the dial on a limited number of critical sustainable development challenges that are especially relevant to the global resources sector.

The Foundation works independently of the company and the company’s interests to set new policy standards in our three strategic areas. Our project investments in these areas are multi-stakeholder by design, because arguably the most critical success factor for raising standards is trying to achieve alignment between governments, civil society and industry.

Let’s take natural resource governance. Every year around the world, global resource companies are pouring hundreds of billions of dollars into governments through taxes and through royalties.

How those contributions are managed by governments is the single most significant factor regarding their contribution to sustainable development. Does a foundation financed by the world’s largest resource company have a responsibility to work with NGOs and governments to shape that conversation? I would say, yes.

This goes beyond traditional thinking in philanthropy; it is the fundamental responsibility of leading responsible global resource companies that want to maximize the societal benefit of the industry in which they operate.

CEO and President of BHP Billiton Foundation, and Principal Sustainability and Public Policy at BHP Billiton, James Ensor was previously Policy & Program Director at global development agency Oxfam.

BHP Billiton, the world’s largest natural resource company, was formed from two miners, both founded in the 19th century: BHP in 1885 and Billiton in 1851.

James Dray is a Partner in Brunswick’s London office, with an expertise in Africa, mining and global philanthropic institutions. He focuses on the firm’s work with global foundations.

Illustration: Melinda Beck