A QUESTION at a recent Glencore pre-AGM meeting about greenhouse gas (GHG) reduction targets made mention that the group’s short-term targets were being missed.
Glencore chairman Tony Hayward’s response was to say the group’s 40% carbon emissions target by 2035 was consistent with the Paris Agreement, which has called on its signatories to minimise global warming to 1.5 degrees centigrade by that date. “We think the timeframe to lower emissions is realistic,” Hayward said.
The interplay demonstrates that while investment groups welcome the bold, long-term targets, there is scepticism as to whether they will actually be met.
Another manifestation of this scepticism was voiced at the April 26 sustainability report presented by Anglo American in which someone asked why the UK firm hadn’t adopted Glencore’s commitment to reducing Scope 3 emissions.
Scope 3 emissions are those of a mining company’s customers as apart from Scope 1 and Scope 2 emissions which focus on the carbon footprint of the firm’s operations and those of its suppliers, respectively.
Mark Cutifani, Anglo American CEO, responded that there was more than one way to meet the dictates of the Paris Agreement, before acknowledging that: “We do have an issue at the moment in that we honestly don’t believe there are any real effective standards that can be applied”.
“Even our competitors account for the numbers differently: whether it is including ‘trading’, not including ‘trading’,” he said. “We are working our way through different methodologies so that when set targets we’ve worked through the unintended consequences.”
What both questions, and their responses, suggest, is that now mining companies have set their intentions, a standard means of measurement or benchmark needs to be agreed upon.
“We think that having done work on Scope 1 and Scope 2, the inconsistencies in the way the numbers are reported need to be very transparent,” said Cutifani. He added, however, that accounting for GHG, was in its early stages for the mining sector.
“A concrete update on benchmarking progress would be offered in October,” he said, referring to the group’s planned update on its environment, sustainability, and governance targets.