REG - Glencore PLC - Publication of 2nd Climate Action Transition Plan

GlencoreAnnouncement

20/03/2024 08:45

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RNS Number : 5880H  Glencore PLC  20 March 2024

 

 

Glencore plc

20 March 2024

Baar, Switzerland

 

Publication of second Climate Action Transition Plan

 

Today, we release our second Climate Action Transition Plan (the 2024-2026
CATP). We continue to evolve our approach first published in 2020, introduce a
new interim industrial emissions reduction target and lay out our plans for
the next three years considering the risks and opportunities of our current
combined energy and metals businesses.

Gary Nagle, Chief Executive Officer, said:

"Our 2024-2026 CATP reflects a wide range of inputs, including analysis of the
evolving market landscape, new regulatory requirements, mining and energy peer
approaches, the IEA's latest modelling, stakeholder inputs, and emerging
insights from the most recent UNFCCC dialogue. We have also undertaken
extensive engagement with our shareholders and appreciate their time and
support as we have developed this CATP.

"Reflecting on these various inputs, this CATP retains our existing emissions
reduction targets, of 15% and 50% by the end of 2026 and 2035 respectively and
our 2050 ambition of achieving net zero industrial CO2e emissions, subject to
a supportive policy environment. It also introduces a new interim target of a
25% reduction in CO2e emissions for our industrial assets by the end of 2030.
We are on track to meet our 2026, 2030 and 2035 emissions reduction targets,
all of which are measured against a restated 2019 baseline.

"Looking ahead, our plan focuses on the delivery of our commitments, including
implementing our MACC initiatives (where practicable and economically viable)
and responsibly phasing down our thermal coal operations, while also
allocating capital to grow our transition-enabling commodities business, and
evolving our understanding and assessment of the climate-related risks and
opportunities that our business faces."

Our progress

We have maintained our previous industrial emissions reduction targets and
ambition. Our transition plan reaffirms our existing targets against a
restated 2019 baseline and adds a new interim target, leading towards a 2050
net zero emissions ambition, subject to a supportive policy environment:

 

-    2026: 15% reduction in our Scope 1, 2 and 3 industrial CO(2)e
emissions against a restated 2019 baseline by the end of 2026

-    2030: 25% reduction in our Scope 1, 2 and 3 industrial CO(2)e
emissions against a restated 2019 baseline by the end of 2030

-    2035: 50% reduction in our Scope 1, 2 and 3 industrial CO(2)e
emissions against a restated 2019 baseline by the end of 2035

Glencore's role in the climate transition

Glencore plays an important role in supporting the global transition to a low
carbon economy. Across our business, we produce, distribute and recycle
commodities that are key components of current transition technologies while
supporting the energy needs of today.

The pace and pathway of decarbonisation are heavily influenced by many
factors, from geopolitics to technological innovation. Our 2024-2026 CATP must
therefore be resilient and flexible to cope with external economic and
political factors, whilst sustaining our own climate targets and ambition.
These external factors also highlight the need for global coordination and
progressive and well-designed policies that are consistent with a just and
orderly transition.

That is why continuous dialogue and engagement with stakeholders is an
important part of how we develop our plans. The 2024-2026 CATP reflects a wide
range of inputs, from stakeholder engagement to the IEA's latest modelling to
analysing peer approaches.

Our strategic pillars

The 2024-2026 CATP is comprised of four strategic pillars:

 

1.   Managing our operational footprint: We continue to identify and deliver
cost-effective emissions reduction opportunities for our Scope 1 and 2
emissions. Whilst our Scope 1 and 2 industrial emissions reflect a small
proportion of our overall emissions footprint, these factors are within our
control and we are developing solutions to address them, such as
electrification and alternative fuel, as well as strengthening our own
monitoring capabilities.

2.   Responsibly reducing our Scope 3 industrial emissions: We remain
committed to the responsible phase-down of our coal portfolio. We recognise
the different roles of thermal coal and steelmaking coal - and the different
transition pathways for both.

We reaffirm our approach to responsibly reduce our production of thermal coal
in an orderly and just way. As part of this, we are not progressing any
greenfield thermal coal investments. We expect a continued phase down of our
thermal coal plants, reflecting our emissions reduction targets and in line
with our Just Transition Principles. We will strive to mitigate impacts and
accelerate the social benefit potential of any operational decisions on our
local communities.

3.   Advancing tomorrow through our transition-enabling commodities
portfolio:  The expected growth in clean energy and low-carbon technologies
is leading to an increased need for 'transition' commodities and we are
investing to meet an expected significant increase in demand for these.

4.   Driving new business models: We are positioning our business for the
future through the pursuit of new business models that support the transition,
such as recycling and carbon solutions.

Elk Valley Resources

We have agreed with Teck Resources Ltd to acquire a 77% interest in its
steelmaking coal business, Elk Valley Resources (EVR), which remains subject
to mandatory regulatory approvals and is expected to close by no later than Q3
2024.

Steelmaking coal is an important transition-enabling commodity as it is an
essential input into much of the world's steelmaking in its current form.
Steel is necessary for constructing transportation and infrastructure such as
ocean-going vessels, rail, bridges and buildings, as well as energy transition
infrastructure including wind turbines.

As there was no certainty that any transaction would be agreed when we
commenced work on this strategy, and because we do not yet have access to the
necessary information relating to EVR, we have developed this strategy
considering the risks and opportunities of our current portfolio of our
integrated energy and metals business.

Our commitment to future reporting

We intend to submit our 2024-2026 CATP for an advisory vote at our 2024 AGM.
We will continue to review our CATP every three years, or if there are
material changes to our business, and seek advisory votes when our climate
plans are renewed.

For further information please contact:

 Investors
 Martin Fewings     t: +41 41 709 28 80  m: +41 79 737 56 42  martin.fewings@glencore.com
 Media
 Charles Watenphul  t: +41 41 709 24 62  m: +41 79 904 33 20  charles.watenphul@glencore.com

 

www.glencore.com

Glencore LEI: 2138002658CPO9NBH955

 
Note on 'our emissions' and other terminology

References to 'Glencore's emissions', 'our emissions' or 'industrial
emissions' mean CO2e emissions from our industrial assets (including Scope 1,
2 and 3) which is defined by reference to our organisational boundary of
operational control, as set out in the About our emissions calculations and
reporting section in our latest Annual Report and our latest Basis of
Reporting. Where 'industrial' is used before 'emissions', this is for
additional clarity, and the underlying meaning is the same irrespective of
whether this is included.

Throughout our 2024-2026 Climate Action Transition Plan (CATP), where we refer
to our aim and/or efforts to achieve 'net zero emissions' we are referring to
a net zero ambition in relation to our industrial emissions.

Reference is made to the Group Reporting Glossary available at
glencore.com/publications for the 2023 reporting suite with respect to the
terms used the 2024-2026 CATP.

 

 

Notes for Editors

Glencore is Glencore is one of the world's largest global diversified natural
resource companies and a major producer and marketer of more than 60
commodities that advance everyday life. Through a network of assets, customers
and suppliers that spans the globe, we produce, process, recycle, source,
market and distribute the commodities that support decarbonisation while
meeting the energy needs of today.

With over 150,000 employees and contractors and a strong footprint in over 35
countries in both established and emerging regions for natural resources, our
marketing and industrial activities are supported by a global network of more
than 50 offices.

Glencore's customers are industrial consumers, such as those in the
automotive, steel, power generation, battery manufacturing and oil sectors. We
also provide financing, logistics and other services to producers and
consumers of commodities.

Glencore is proud to be a member of the Voluntary Principles on Security and
Human Rights and the International Council on Mining and Metals. We are an
active participant in the Extractive Industries Transparency Initiative.

We will support the global effort to achieve the goals of the Paris Agreement
through our efforts to decarbonise our own operational footprint. We believe
that we should take a holistic approach and have considered our commitment
through the lens of our global industrial emissions. Against a restated 2019
baseline, we are targeting to reduce our Scope 1, 2 and 3 industrial emissions
by 15% by the end of 2026, 25% by the end of 2030, 50% by the end of 2035 and
we have an ambition to achieve net zero industrial emissions by the end of
2050, subject to a supportive policy environment. For more information see our
2024-2026 Climate Action Transition Plan and the About our emissions
calculation and reporting section in our 2023 Annual Report, available on our
website at glencore.com/publications.

 

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Important Information

This document does not constitute or form part of any offer or invitation to
sell or issue, or any solicitation of any offer to purchase or subscribe for
any securities.

 

Cautionary statement regarding forward-looking information

Certain descriptions in this document are oriented towards future events and
therefore contains statements that are, or may be deemed to be,
"forward-looking statements" which are prospective in nature. Such statements
may include, without limitation, statements in respect of trends in commodity
prices and currency exchange rates; demand for commodities; reserves and
resources and production forecasts; expectations, plans, strategies and
objectives of management; expectations regarding financial performance,
results of operations and cash flows, climate scenarios; sustainability
performance (including, without limitation, environmental, social and
governance) related goals, ambitions, targets, intentions, visions, milestones
and aspirations; approval of certain projects and consummation of certain
transactions (including, without limitation, acquisitions and disposals, in
particular the proposed acquisition of a majority stake of EVR from Teck
Resources Limited and potential subsequent demerger of the combined coal and
carbon steel materials business); closures or divestments of certain assets,
operations or facilities (including, without limitation, associated costs);
capital costs and scheduling; operating costs and supply of materials and
skilled employees; financings; anticipated productive lives of projects, mines
and facilities; provisions and contingent liabilities; and tax, legal and
regulatory developments.

 

These forward-looking statements may be identified by the use of
forward-looking terminology, or the negative thereof including, without
limitation, "outlook", "guidance", "trend", "plans", "expects", "continues",
"assumes", "is subject to", "budget", "scheduled", "estimates", "aims",
"forecasts", "risks", "intends", "positioned", "predicts", "projects",
"anticipates", "believes", or variations of such words or comparable
terminology and phrases or statements that certain actions, events or results
"may", "could", "should", "shall", "would", "might" or "will" be taken, occur
or be achieved. The information in this document provides an insight into how
we currently intend to direct the management of our businesses and assets and
to deploy our capital to help us implement our strategy. The matters disclosed
in this document are a 'point in time' disclosure only. Forward-looking
statements are not based on historical facts, but rather on current
predictions, expectations, beliefs, opinions, plans, objectives, goals,
intentions and projections about future events, results of operations,
prospects, financial conditions and discussions of strategy, and reflect
judgments, assumptions, estimates and other information available as at the
date of this document or the date of the corresponding planning or scenario
analysis process.

 

By their nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to differ materially from any future event, results, performance,
achievements or other outcomes expressed or implied by such forward-looking
statements. Important factors that could impact these uncertainties include
(without limitation) those disclosed in the risk management section of our
latest Annual Report and Half-Year Report (which can each be found on our
website). These risks and uncertainties may materially affect the timing and
feasibility of particular developments. Other factors which impact risks and
uncertainties include, without limitation: the ability to produce and
transport products profitably; demand for our products and commodity prices;
development, efficacy and adoption of new or competing technologies; changing
or divergent preferences of our stakeholders; changes to the assumptions
regarding the recoverable value of our tangible and intangible assets; changes
in environmental scenarios and related regulations, including, without
limitation, transition risks and the evolution and development of the global
transition to a low carbon economy; recovery rates and other operational
capabilities; timing, quantum and nature of certain acquisitions and
divestments; health, safety, environmental or social performance incidents;
labour shortages or workforce disruptions; natural catastrophes or adverse
geological conditions, including, without limitation, the physical risks
associated with climate change; effects of global pandemics and outbreaks of
infectious disease; the outcome of litigation or enforcement or regulatory
proceedings; the effect of foreign currency exchange rates on market prices
and operating costs; actions by governmental authorities, such as changes in
taxation or regulation or changes in the decarbonisation policies and plans of
other countries; changes in economic and financial market conditions generally
or in various counties or regions; political or geopolitical uncertainty; and
wars, political or civil unrest, acts of terrorism, cyber-attacks or sabotage.

 

Readers, including, without limitation, investors and prospective investors,
should review and consider these risks and uncertainties (as well as the other
risks identified in this document) when considering the information contained
in this document. Readers should also note that the high degree of uncertainty
around the nature, timing and magnitude of climate-related risks, and the
uncertainty as to how the energy transition will evolve, makes it difficult to
determine all potential risks and opportunities and disclose these and any
potential impacts with precision. Neither Glencore nor any of its affiliates,
associates, employees, directors, officers or advisers, provides any
representation, warranty, assurance or guarantee as to the accuracy,
completeness or correctness, likelihood of achievement or reasonableness of
any forward-looking information contained in this document or that the events,
results, performance, achievements or other outcomes expressed or implied in
any forward-looking statements in this document will actually occur. Glencore
cautions readers against reliance on any forward-looking statements contained
in this document, particularly in light of the long-term time horizon which
this document discusses in certain instances and the inherent uncertainty in
possible policy, market and technological developments in the future.

 

No statement in this document is intended as any kind of forecast (including,
without limitation, a profit forecast or a profit estimate), guarantee or
prediction of future events or performance and past performance cannot be
relied on as a guide to future performance.

 

Except as required by applicable regulations or by law, Glencore is not under
any obligation, and Glencore and its affiliates expressly disclaim any
intention, obligation or undertaking, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. This document shall not, under any circumstances, create any
implication that there has been no change in the business or affairs of
Glencore since the date of this document or that the information contained
herein is correct as at any time subsequent to its date.

 

Cautionary statement regarding climate strategy

Glencore operates in a dynamic and uncertain market and external environment.
Plans and strategies can and must adapt in response to dynamic market
conditions, changing preference of our stakeholders, joint venture decisions,
changing weather and climate patterns, new opportunities that might arise or
other changing circumstances. Investors should assume that our climate
strategy will evolve and be updated as time passes. Additionally, a number of
aspects of our strategy involve developments or workstreams that are complex
and may be delayed, more costly than anticipated or unsuccessful for many
reasons, including, without limitation, reasons that are outside of Glencore's
control. Our strategy will also necessarily be impacted by changes in our
business, such as the proposed acquisition of EVR and potential demerger of
the combined coal and carbon steel materials business.

 

There are inherent limitations to scenario analysis, and it is difficult to
predict which, if any, of the scenarios might eventuate. Scenario analysis
relies on assumptions that may or may not be, or prove to be, correct and that
may or may not eventuate and scenarios may also be impacted by additional
factors to the assumptions disclosed. Given these limitations we treat these
scenarios as one of several inputs that we consider in our climate strategy.

 

Due to the inherent uncertainty and limitations in measuring greenhouse gas
(GHG) emissions and operational energy consumption under the calculation
methodologies used in the preparation of such data, all CO2e emissions and
operational energy consumption data or volume references (including, without
limitation, ratios and/or percentages) in this document are estimates. GHG
emissions calculation and reporting methodologies may change or be
progressively refined over time resulting in the need to restate previously
reported data. There may also be differences in the manner that third parties
calculate or report such data compared to Glencore, which means that
third-party data may not be comparable to Glencore's data. For information on
how we calculate our emissions and operational energy consumption data, see
the About our emissions calculations and reporting section in our 2023 Annual
Report and our 2023 Basis of Reporting, which are available on our website.

 

Sources

Certain statistical and other information included in this document is sourced
from publicly available third-party sources. This information has not been
independently verified and presents the view of those third parties and may
not necessarily correspond to the views held by Glencore and Glencore
expressly disclaims any responsibility for, or liability in respect of, and
makes no representation or guarantee in relation to, such information
(including, without limitation, as to its accuracy, completeness or whether it
is current). Glencore cautions readers against reliance on any of the
industry, market or other third-party data or information contained in this
document.

 

Information preparation

In preparing this document, Glencore has made certain estimates and
assumptions that may affect the information presented. Certain information is
derived from management accounts, is unaudited and based on information
Glencore has available to it at the time. Figures throughout this document are
subject to rounding adjustments. The information presented is subject to
change at any time without notice and we do not intend to update this
information except as required.

 

Subject to any terms implied by law which cannot be excluded, Glencore accepts
no responsibility for any loss, damage, cost or expense (whether direct or
indirect) incurred by any person as a result of any error, omission or
misrepresentation in information in this document.

 

Other information

The companies in which Glencore plc directly and indirectly has an interest
are separate and distinct legal entities. In this document, "Glencore",
"Glencore group" and "Group" are used for convenience only where references
are made to Glencore plc and its subsidiaries in general. These collective
expressions are used for ease of reference only and do not imply any other
relationship between the companies. Likewise, the words "we", "us" and "our"
are also used to refer collectively to members of the Group or to those who
work for them. These expressions are also used where no useful purpose is
served by identifying the particular company or companies.

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