E-book

BMC’s Sustainable
Procurement Report
FY23
Table of Contents
03 A note to the reader
04 Our sustainability focus with our suppliers
05 Our third-party code of conduct and
contract clauses
06 Our public commitments
07 Spotlight on employee-leased car fleet
08 Analyzing our supplier base
09 Applying due diligence and governance
to sustainability
10 Our supplier diversity program
11 Investing in our sourcing team
12 Sustainability leadership in action
13 Global Reporting Initiative (GRI)
standards
02
A note to the reader:
FY23 built on the momentum and progress established in FY22, our largest undertaking as a sustainable procurement organization, a year in which we
established processes, set objectives, and released our first Sustainable Procurement Report.

BMC Global Procurement continues to support BMC’s customers, our local communities, and our global stakeholders via environmental and human rights
initiatives. Plug-in hybrid electric vehicles (PHEVs) are now the de facto standard issue in our European fleet—to the delight of our employees—and we’ve laid
the groundwork to expand our supplier diversity program to India. We undertake these and a variety of other programs in support of BMC’s commitments to
net-zero carbon goals, the Science Based Targets initiative (SBTi), and the United Nations Global Compact (UNGC).

The year in review…
During FY23, we saw good progress in both
delivered projects and the creation of new
initiatives to serve our sustainability goals into
FY24 and beyond. Here a few highlights:
+ To address the impact to those affected
by the Ukraine invasion, we worked with
our contingent labor suppliers and BMC
stakeholders to ensure our contractors
remained safe, connected, and equipped
to earn their livelihoods and support their
families and the Ukrainian economy while
supporting BMC’s business.
+ Setting the stage for a global supplier Recognition along the way…
diversity program, we performed the logistics
and legal groundwork to expand the micro-, We are pleased to note that the work we’ve done
small-, and medium-sized business supplier over the last two years earned BMC a Sustainable
diversity program in India to include women’s Procurement Gold rating from EcoVadis in June
business enterprises (WBEs). We look 2022. BMC appreciates this recognition, and
forward to reporting on these results in next we are continuing that journey to renew the
year’s report. resources that sustain us and improve the lives of
our global stakeholders.
+ BMC designated a Global Procurement
Senior Manager, our Supplier Governance Keith Corell
Manager, as one of three BMC participants in AVP of BMC Global Procurement
the United Nations Sustainable Development
Goals (SDG) Innovation Accelerator for
Young Professionals program, a 10-month
program aimed at promoting collaboration
and innovation to advance company
sustainability initiatives.

03
Our sustainability focus with
our suppliers
Environmental impacts of suppliers

1. Understand emissions contributors from our supplier base

2. Partner with suppliers to minimize greenhouse gas emissions

in air, soil, and water and reduce our carbon footprint

3. Promote a circular economy by reducing resource

consumption, using recycled and/or recyclable materials, and
optimizing durability, repairability, and recyclability, etc.

Labor practices and human rights issues of suppliers

1. Promote quality and fair labor practices

2. Ensure our suppliers comply with all applicable laws,

regulations, and other employment standards

3. Prevent human rights violations in our supply chain, including

those related to human trafficking

04
Our third-party code of conduct
and contract clauses
As a prerequisite to act on behalf of or jointly with BMC, all third parties must agree
to comply with our Third-Party Code of Conduct, which this document advances
our sustainability commitments and communicates our priorities and expectations to
suppliers. This Third-Party Code of Conduct, along with other social and environmental
clauses, is embedded into our master service agreement (MSA) template, in which
suppliers represent and warrant that all employees, contractors, and subcontractors
performing under their contracts acknowledge and accept its conditions.

A paramount expectation is that our suppliers comply with all applicable laws and
regulations in the countries where they conduct or engage in BMC business, including
those that are relevant to environmental and social impacts.

Environmental focus Social focus

BMC expects suppliers to be Human trafficking,
conscious of their impact child labor, and forced
on the environment and labor are prohibited.
to promote and develop
awareness around the
subject matter.

One hundred percent of applicable suppliers have

acknowledged BMC’s Third-Party Code of Conduct.
05
Our public commitments
United Nations Global Compact (UNGC)
In 2022, BMC joined the world’s largest
sustainability initiative, serving to strengthen
the social responsibility of companies. As a
participant, BMC has committed to conduct
business responsibly by aligning to the UNGC’s
Ten Principles pertaining to human rights, labor,
environmental practices, and anti-corruption.
In 2023, BMC furthered its involvement
with the UNGC by participating in the SDG
Innovation Accelerator for Young Professionals,
a 10-month program for future business leaders
and innovative sustainability trailblazers. With
one of Global Procurement’s Senior Managers,
the Supplier Governance Manager, selected
as one of the three BMC participants, we are
actively working to advance our sustainability
initiatives through innovation and collaboration
with other UNGC companies.
Science Based Targets initiative (SBTi)
In 2021, BMC joined the Business Ambition
for the 1.5°C campaign, which aims to limit
the global temperature rise to 1.5°C above
pre-industrial levels, and to reach net zero by
2050. Through this pledge and our submission
to the Carbon Disclosure Project (CDP), BMC
has committed to establishing science-based
emissions’ reduction targets across the business
and setting a long-term target to reach net-zero
value chain emissions by no later than 2030.
Objective: By the end of FY24, BMC intends
to join the CDP Supply Chain Program, a
world-leading disclosure system that will help us
to identify and respond to environmental risks
and opportunities with our suppliers.
06
Update on employee-leased
car fleet
BMC Global Procurement continues its initiative to transition our employee-leased
EMEA car fleet from diesel/gas cars to plug-in hybrids.

Supply chain issues in the auto sector and high demand caused a slow start to our
shift to plug-in hybrid electric vehicles (PHEVs) early in FY23, but those challenges
have eased, and we expect to accelerate the shift in FY24.

On average, replacing a gas-powered vehicle with a hybrid cuts CO2/km emissions

by 66 percent.*

Projected Emissions as Fleet Transitions to Plug-in Hybrid

(20km/yr per vehicle)
To accommodate the change to hybrids,
100 600
BMC Global Procurement is partnering
500
80 with BMC Facilities to install charging
400
Percentage 60 Metric
stations in our EMEA offices. The number
of Hybrid 300 Tons of of charging stations is anticipated to
Cars 40 CO2*
200 increase in concert with government
20 100 restrictions on standard cars; we look
0 0 forward to our employees' increased
access to this benefit in the future.
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*Based on JATO Dynamic's, Inc. emissions data for BMC’s current and projected fleet and 20 km/yr per vehicle assumption.
07
Analyzing our supplier base
We recognize certain suppliers require
enhanced due diligence based on their
heightened risk of human and labor rights
violations, as well as their contributions to
greenhouse gas emissions.
Heightened-risk categories include:
Facilities, Global Services, IT and Cloud
Services, IT Hardware, IT Network
and Telecom, IT Software, and Non-
employee Labor.

We classify our suppliers based on

category, sub-category, and tier to FY23 Spend Allocation
identify potential social and environmental
focus areas. Suppliers that meet certain
criteria are designated Corporate Social
Responsibility (CSR)-Focused Suppliers.

CSR-Focused Suppliers are subject Suppliers Suppliers in CSR-Focused

All
in other heightened-risk Suppliers
to enhanced due diligence such as others
categories categories (Tier 1)
sustainability assessments and added
69% 31% 65% 35%
documentation requirements, with audits
and remediation plans.

08
Applying due diligence and
governance to sustainability
Goal established in FY22: 100% of
CSR-Focused Suppliers have completed
an environmental and social due-diligence
assessment upon contract renewal or end
of FY24, whichever is earlier.
FY22 FY23 (Current State)
71% 87%
The environmental and social due-diligence
assessment includes reviewing and
assessing CSR-Focused Suppliers against
BMC’s Sustainability Questionnaire and/
or supplier-provided documentation that
meets the same intent. Review includes
identifying significant actual and potential
negative social and/or environmental
impacts with a supplier.
Objective: By FY25, incorporate and leverage the CDP Supply Chain Program
into our evaluations of applicable supplier environmental risk.
Governance: Chaired by BMC Global
Procurement, the BMC Supplier Risk
Governance Council is a cross-functional
team comprised of various subject matter
experts from different offices within BMC.
This team is responsible for performing due
diligence risk reviews of BMC’s third-party
suppliers.
In the past, this council has focused on
information security, personal data, and
confidential and financial information
shared. In FY23, we met our objective to
expand the purpose of this due-diligence
process to include new suppliers that
meet CSR-Focused Supplier criteria. Going
forward, all CSR-Focused Suppliers will be
reviewed and approved against sustainability
considerations as part of this process.
09
Our supplier diversity program
At BMC, diversity is a business imperative—one that not only applies to our employees,
but also extends to those with whom we do business. We strategically align ourselves
with women- and minority-owned businesses of all sizes and small businesses
encompassing, but not limited to, the following socio-economic concerns as defined by
the U.S. Small Business Administration: small disadvantaged, veteran-owned, service-
disabled veteran-owned, and women-owned.

Throughout FY23, we worked to accomplish the goal set in our FY22 report of
expanding our supplier diversity program beyond the United States. As a result of these
efforts, we are now able to track the spend with women-owned and veteran-owned
businesses in India, our second largest country in which we operate.

Small Business Spend (in millions) GSA Goals vs. Actuals Minority Spend (in millions)
by Federal Fiscal Year (ends Sep 30) by Federal Fiscal Year

Women Minority
FY20 FY21 FY22* FY23** Owned Owned
40 3.5
35 3.0
30
2.5
Objective: Expand our supplier
25
2.0 diversity program to Europe in FY24
20
15
1.5 to include 100 percent of the region’s
1.0
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*During FY22, the budget and travel impacts of COVID-19 restrictions reduced small business spend against General Services Administration (GSA) goals.

**Our GSA goals are set based on the attainments reached in prior periods, and our shortfall in GSA FY22 resulted in a historically low goal for FY23. Our
10
forecast indicates we will exceed this goal despite continued challenges in the events category.
Investing in our sourcing team
Ongoing sustainability training

+ Intentional focus on sustainability: In FY22, the entire BMC Global

Procurement team completed Udemy’s “Sustainable Procurement: A
Guide to Ethical Purchasing” course focused on social and environmental
issues facing supply chains and their impacts on purchasing. We’ve since
embedded this training as a sustainability onboarding initiative for any Communicating, setting, and
new members of our organization, and as such, have maintained 100 measuring sustainability goals
percent completion throughout our organization.*
We continually work to ensure that
+ Bi-annual training on supplier diversity: We continue to hold our goals for our sourcing team reflect
quarterly training sessions with the applicable members of our sourcing our priorities. Not only do we train and
team to educate and further advance their awareness and involvement educate on sustainability, but we also set
with this important aspect of our supplier base. Further, applicable BMC and measure goals related to sustainability
Global Procurement buyers are committed to participating in annual in applicable BMC Global Procurement
events with the various organizations we support. buyers’ annual performance plans. We
continue to expand our sourcing team’s
+ Unlimited access to LinkedIn Learning: Continued education goals to advance the objectives we set in
and learning is paramount at BMC. This is demonstrated by giving all these annual reports.
employees access to the LinkedIn Learning platform, which houses
thousands of courses, including those related to social and environmental
sustainability.

*Based on management review of completion certificates.

11
Sustainability leadership in action
Martin Luther King International Day of Service
Twenty-nine employees from the U.S. BMC Global
Procurement team and the Controllership organization
spent four hours removing 10 cubic yards of weeds from
Memorial Park in Houston, Texas.
Two members of the Spain Global Procurement team
spent four hours cleaning up the local beach in Alicante
on the east coast of Spain.
The Global Procurement team in India spent six hours
cleaning up and raising awareness about the litter problem
at Sinhagad Fort in Pune, India, a site with historical
significance frequently visited by locals and tourists.
In partnership with our CSR office and the BMC Facilities
team, one of our India-based Global Procurement team
members proactively placed stickers on all paper towel
holders in the BMC India headquarters bathrooms,
reminding the user that only one is needed.
12
Global Reporting Initiative (GRI) standards
Throughout FY23, BMC undertook the challenge to report in The entire applicable GRI index can be found in the annual BMC
reference to the Global Reporting Initiative (GRI) standards. By Corporate Social Responsibility Report, and we’ve included the
doing so as a company, we ensure that we provide consistency and portions that Global Procurement directly contributes to here:
transparency in our reporting, while also publicly disclosing our
most significant sustainability impacts and how we manage them.

Statement of use BMC Software, Inc. has reported the information cited in this GRI content index for the period 1 April 2022–31
March 2023 with reference to the GRI Standards.
GRI 1 used GRI 1: Foundation 2021

Standard Reference Disclosure Reference

GRI 204: Procurement Practices 2016
GRI 308: Supplier Environmental Assessment 2016
GRI 308: Supplier Environmental Assessment 2016
GRI 414: Supplier Social Assessment 2016
GRI 414: Supplier Social Assessment 2016
Disclosure 204-1 Proportion of spending on local
suppliers
6 Disclosure 308-1 New suppliers that were screened
using environmental criteria
Disclosure 308-2 Negative environmental impacts in the
supply chain and actions taken
Disclosure 414-1 New suppliers that were screened
using social criteria
Disclosure 414-2 Negative social impacts in the supply
chain and actions taken
The term “local suppliers” refers to suppliers operating
in the country where a BMC entity is located.
Significant locations of operation include the
United States and India, which represent a combined
76% of BMC’s FY23 procured spend.
Percentages of procured spend local to those BMC
entities for FY23 are:
1) United States: 92%
2) India: 97%
100% of Tier 1 that fall within environmental high-risk
sub-categories were screened.
We have not identified any Tier 1 suppliers with these
risks.
100% of Tier 1 that fall within social high-risk sub-
categories were screened.
We have not identified any Tier 1 suppliers with these
risks.

13
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