BHP Group Ltd (ASX: BHP) is holding an investor and analyst briefing today in London about Social Value, is the BHP share price a buy?
BHP is a world-leading resources company, extracting and processing minerals (like iron ore and copper), oil and gas, and has more than 62,000 employees and contractors, primarily in Australia and the Americas. Headquartered in Melbourne, BHP has shares listed on both the ASX and London Stock Exchange (BHP Billiton Plc).
BHP’s Changing Strategy
BHP is one of the world’s largest resource businesses, but it’s making more reference to being better for everyone, not just shareholder returns above everything else.
The briefing that it’s holding today is to provide detail about how ‘social value’ underpins BHP’s strategy, how it plays an important role in decision making and how it can driver better outcomes for all BHP stakeholders.
BHP Chief External Affairs Officer Geoff Healy said: “We are moving from a position of maintaining a ‘social licence’ to creating ‘social value’.
“For us, it is – plain and simple – good business. We are part of a society that expects more of us. We recognise that our success depends on our ability to earn their trust and confidence. And we know that this means changing the way we do business at all levels from local to global.
“If we get this right, we firmly believe we will win access to the best talent, resources and markets, and set ourselves up to deliver a sustained competitive advantage.”
BHP recognises that many more investors are looking at their investments with ‘environmental, social and governance’ (ESG) as part of the process. According to BHP, around 80% of asset managers consider ESG and 61% of fund managers believe evidence of ESG execution is very important.
BHP highlighted a number of initiatives that it’s supporting to reduce the impact on the environment such as a shift to desalinated water at Escondida and it is trying to reduce its shipping CO2 by 20% with the world’s first bulk carrier tender for LNG-fuelled transport.
I think BHP is making the right moves to make sure it’s sustainable in a future where there’s an even higher focus on environmental aspects. Is BHP a buy today? Well it depends what the various resource prices do.
With the BHP share price above $35 I think it’s much closer to the top of the resources cycle rather than the bottom, so it would probably be better to wait for lower resource prices and a lower share price.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.