Sustainability Roadshow Preview Climate change 17 May 2018
Agenda 1 Key takeaways • Strategic approach • Climate change considerations embedded in our planning • Emissions targets and performance • 2020 target set at 5% below 2016, post 2020 being evaluated • Reporting update ◦ TCFD ◦ Adopting TCFD reporting methodology ◦ Aiming for A ◦ Delivered “Aiming for A” objectives ◦ Disclosure • Energy & climate scenarios • Energy and climate scenarios used to evaluate business ◦ Glencore perspective ◦ Supporting least cost carbon reduction • Energy demand • Global energy demand drivers persist ◦ IEA update ◦ Growth and fossil fuels embedded in New Policies ◦ SE Asia demand ◦ Coal central to SE Asian energy demand • HELE technology & CTSCo • HELE technology and CCS are essential to deliver Paris targets • Balanced Portfolio • Commodity mix and resource optionality key to Glencore • Conclusion
Strategic Approach 2 Our response Corporate strategy Assessment of risk and materiality • Integration of Maintain Focus on cost Scenario analysis – energy and commodity demand pathways • sustainability a robust and control and including carbon pricing throughout our flexible balance operational Risk Management – government policy, energy costs, physical, business sheet efficiencies • stakeholder, markets Management of our energy and carbon emissions footprint • Climate Change Established and on target to meet 5% emissions intensity • reduction by 2020 Evaluating post 2020 targets • Our Position Recognise science of climate change as set out by IPCC • Engagement with our stakeholders • Acknowledge climate change goals outline in the UNFCCC Paris Agreement • We strongly believe energy and climate change goals will only be met in an economically stable and • Support for low emission technologies • secure world Advocating HELE technology • Governments and industry must work together to establish policy frameworks to deliver the optimal • CTSCo – CCS pilot project balance of social, environmental and economic considerations appropriate for individual nations. • We support a least-cost pathway to achieving climate change goals that considers the cost and Balanced commodity exposure • • consequences of all available policy options and does not hinder socio-economic development. Key Highlights 2017 20% of Glencore’s global energy consumption is sourced Total energy use Scope 1 emissions Scope 2 emissions (petajoules) (million tonnes CO 2 e) (million tonnes CO 2 ) from renewables 202 21.6 11.9
Emissions performance 3 Glencore emissions reduction Established carbon emission intensity reduction target (Scope1 & 2) • of at least 5% on 2016 levels by 2020 40 4.9 Continuing to include carbon emissions and reductions in annual • 35 Emission intensity (t CO 2 e/t Cu-eq) planning process , updating marginal abatement cost curves to 4.8 assist in establishing post 2020 targets Absolute Scope 1+2 (Mt CO 2 e) 30 Absolute Scope 1&2 emissions decreased by 5%, • 4.7 primarily due to lower fugitive emissions at our coal operations 25 Emission intensity increased slightly, related to pre-stripping • 20 4.6 activity 2018 – 2021 carbon budget showed on track to meeting reduction 15 • 4.5 target; combination of Energy efficiency gains, specially reusing heat and waste gases • 10 Carbon-efficient operational changes • 4.4 5 0 4.3 2015 2016 2017 2018 2019 2020 Absolute scope 1+2 Intensity Scope 1+2
Status update: Task Force on Climate-related Financial Disclosure (TCFD) 4 TCFD core Governance Strategy Risk Management Metrics and Targets elements • Board oversight • Describe risk & • Risk identification process • Risk & operational metrics opportunities • Management of risks and • Risk management • Scope 1 – 3 metrics, risks opportunities • Impact on business, process • Targets strategy, financial plan • Embedding into • Resilience - 2DS scenario corporate risk • Established Climate • Performed high-level risk • Disclosed high-level risk • Disclosed assured Scope 1, 2 2017 management Change working group, assessment assessment & & 3 emissions, breakdowns, reporting chaired by Chairman management process intensities • Developed 3 scenarios on • Included carbon pricing in carbon and energy prices, • Set 2020 intensity target budget process applied to commodities, • Applied internal cost of disclosed investment • Published TCFD cross carbon in commodities outlook reference table in AR 2017 with highest GHG emissions Future Action • Continue board • Disclose longer term • Perform top-valued asset • Prepare post-2020 target involvement in climate climate change strategy level risk assessment • Consider further metrics on change governance • Disclose indication of risks and opportunities • Incorporate climate change financial impact of risks & • Extend implementation of considerations in M&A, mitigating actions for internal cost of carbon large projects regions, products where relevant • Induce climate change • Disclose updated scenarios incentives for assets with including assumptions high climate change impact/risk • Have full response to TCFD in AR 2019
Status update: Aiming for A 5 Aiming for A Ongoing operational Asset portfolio Low carbon energy Strategic KPIs and Public policy area emissions resilience R&D and investment executive incentives interventions management • Apply post-2035 • Publish long term • Transparency on long • Disclose evolution of scenarios, IEA7 range HELE/CCS strategy term lead KPIs and PPI • CDP Climate score executive incentives re. progress to best in • Publish in routine • Disclose amount • Positions on policy transition to low class (A) report invested goals and measures, carbon economy especially towards NDCs • 2017 CDP score: B • Published scenarios, • Disclosed CTSCo and • Declared KPIs and • Disclosed our own 2017 report including IEA 2DS, up Callide Oxyfuel projects incentives to be most position • Disclosed all Scope 1 – 3 to 2040, in separate relevant at asset level emissions in SD17 • Amount invested in • Disclosed views of report Callide Oxyfuel was industry bodies in • Reiterated in AR17 and disclosed which we participate SD17 and our involvement in their positions
Disclosure and reporting 6 Report Content Annual report 2017, p. 30-33 TCFD cross reference • Strategy, impact • High level values • Climate change considerations for our Our approach, policy developments, strategic integration • business 2017 Risk management, transition to low carbon economy • Business opportunities, portfolio resilience, case studies • Sustainability report 2017, p. 28-35 Our approach, performance, risk management • TCFD cross reference, summary of portfolio resilience • Data book and GRI references 2017 Detailed breakdowns of energy, Scope 1 and 2 emissions by type, region and • p. 16–19, 22-30, p. 48 - 50 commodity; Scope 3 details Emission factors, carbon reduction initiatives, carbon trading, breakdown of • coal production by mine type CDP Climate Change 2017 Not to be responded to for 2017: highly redundant to TCFD-based and freely • accessible reporting as per above
Glencore perspective on meeting climate change goals 7 We support reducing global carbon emissions and acknowledge the COP21 climate goal of 2 o C global leaders have pledged to • achieve We want to see a logical and least cost approach to achieving climate goals • There is a significant gap between the energy reality and outcomes being predicted by key climate commentators who are • basing their forecasts on policy statements Industrialisation and urbanisation of developing economies, particularly in Asia, will continue to drive significant growth in global • energy / electricity demand which will continue to largely be met by coal, oil and gas for the foreseeable future Glencore’s commodity mix is aligned to the broader electrification of economies ◦ While it may no longer be predominant - under most scenarios, coal will play a major role as key input to industrial processes • and as a competitive, safe, secure and reliable baseload source of energy The achievement of climate goals has to consider the ongoing use of coal – policy needs to drive the use of high efficiency low • emission (HELE) technology, which already exists and which now delivers up to 35% less emissions than older technology The aim of climate and energy policy must be to reduce CO 2 emissions in the most cost effective manner whilst ensuring energy • security – investing into HELE coal technologies achieves this All climate scenarios recognise that the deployment of carbon capture and storage technology (CCS) is essential to achieving • climate goals – global policy needs to support this otherwise climate goals will not be met
Recommend
More recommend
