In a large pot, heat olive oil over medium heat. Add the diced onion to the pot. Sauté until it becomes translucent. Add the diced bell pepper and minced garlic to the pot. Continue to sauté for an additional minute.
Pour in the canned diced tomatoes and mix well. Add the drained kidney beans and the diced butternut squash. Pour in the vegetable broth and add the bay leaf. Stir everything together until well combined.
Raise the heat to bring the mixture to a gentle simmer. Once simmering, reduce the heat to low, cover the pot, and allow the chili to cook for approximately 30 minutes. The chili is ready when the butternut squash is fork-tender.