Report Quality and AssuranceChair: John Purcell, Policy Advisor Corporate Regulation, CPA Australia; Member, GRI’s Australian Advisory Group.Richard Boele, Managing Director, BanarraRenzo Mori Junior, Researcher, University of Southern QueenslandAdrian King, National Leader, Climate Change & Sustainability Services, KPMG Nancie-Lee Robinson, General Manager – Governance, Integration & Reporting, Telstra

KPMG in BHP Billiton’s Assurance Journey

Adrian King

Tuesday 27 March 2012

3© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

What I will cover

3. The differences in these levels of

assurance

4. KPMG’s approach to assurance

5. Why companies are seeking greater

assurance

2. KPMG’s assurance in FY11

1. BHP Billiton’s reporting in FY11

4© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

BHP Billiton’s reporting in FY11

ICMM Sustainable Development Framework Requirements

Global Compact Principles

Source: www.bhpbilliton.com

5© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

Increasing levels of assurance

Limited assurance 4- 6 parameters

AA1000 & ISAE3000

Limited assurance 6 parameters

ISAE3000

Limited assurance11 parameters

Reasonable assurance GHGEmissions

ISAE3000No assurance

Verification Statement – no standard

Scope to be finalised

ISAE3000

FY07 - 09 FY10 - 12

Limited assurance

AA1000

FY97

BHP Billiton Environment Report 1997

FY04 – 06FY02-03

BHP Billiton Sustainability Report 2012

Source: www.bhpbilliton.com

6© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG’s assurance in FY11

–GRI application level check

(Verification)

–Limited assurance over selected areas

–Reasonable assurance over GHG

7© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

Sustainability report

AssetGroupCustomer Service Group

ProcessOperation Data

GRI Application Level check (Verification)

Control environment

Review controls

Process controls

Data review

Data verification

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8© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

Limited assurance

Control environment

Review controls

Process controls

Data review

Benchmarking

Trend analysis

Data verification

OO OO OOOOO OO OOOOO OO OO

Understand and review of processes

Sustainability report

AssetGroupCustomer Service Group

ProcessOperation Data

O O

9© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

Reasonable assurance

Control environment

Review controls

Process controls

Data review

Benchmarking

Testing control environment Data verification

Data verification

Testing process controls

Testing review controls

Trend analysis

Data verification

OOOOO

Understand and review of processes

Sustainability report

AssetGroupCustomer Service Group

ProcessOperation Data

OOOOOOO OOOOOOOO

10© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG’s Approach to Assurance

■ Standards are subject to continuous improvement

■ Mandatory supporting standards

Assurance Standards

Regulation of assurance provider

Quality control at firm level

■ Monitoring of assurance quality by professional body and regulator

■ Complaints mechanism

■ Disciplinary processes

■ Ethical requirements

■ Peer review required

■ Independence requirements

KSAMKPMG Sustainability Assurance Manual

11© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

Why companies are seeking greater assurance

■ Less errors in reporting

■ Improved processes and controls

■ Greater confidence in reported information

■ Ability to support claims to regulators

■ Lower reputational and reporting risks

Ultimately to enhance reliability & credibility of information

© 2012 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International).

Liability limited by a scheme approved under Professional Standards Legislation.