Anglo American plc has published its Climate Change Report 2021, ahead of its six-monthly sustainability performance update. The update will include Anglo American’s progress towards its target of carbon neutral operations (Scopes 1 & 2) by 2040 and its ambition to reduce its Scope 3 emissions by the same year, 2040.
“We have long understood that our sustainability performance, our financial performance and our ability to deliver attractive returns over the long term are inextricably linked. Our strategic choices position us increasingly to supply many of the metals and minerals that are critical to enabling the technologies society needs to decarbonise energy and transport, but also to cater for the needs of an ever-growing global consumer population.
“With that responsibility, we recognise that our industry must continue to evolve. Through innovative technologies and practices, we can be more targeted in accessing those metals and minerals, use less water and energy and, crucially, generate fewer GHG emissions. Our FutureSmart Mining™ programme, using technology to transform our safety and sustainability performance, has helped us make significant progress in recent years and we are accelerating our efforts. Building upon our commitment to carbon neutrality across our operations by 2040, we have today set our ambition to reduce our Scope 3 emissions by 50%, also by 2040.”
Anglo American’s most recent Climate Change Report, published today, sets out the progress we are making towards the commitment made 12 months ago to deliver carbon neutral operations by 2040, having met our 2020 GHG reduction target a year ahead of time. Our integrated FutureSmart Mining™ approach to driving sustainability outcomes through technology and digitalisation is central to our plan and our progress, as are the partnerships we are exploring to help catalyse the delivery of renewables infrastructure, for example, in South Africa. Last year, a little more than one third of the electricity Anglo American used globally was drawn from renewable sources. Having now secured 100% renewable electricity supply across our operations in Brazil, Chile and Peru, by 2023 we expect to be drawing 56% of our grid supply from renewables.
Another major step is to displace diesel usage in our mine truck fleet – accounting for 10-15% of Anglo American’s Scope 1 emissions. Our 2MW hydrogen fuel-cell and battery hybrid pilot truck is being assembled in South Africa and will generate more power than its diesel predecessor – a zero emission truck capable of carrying a 290 tonne payload – a world first. Once fully tested, we intend to begin rolling out this technology across our global truck fleet starting in 2024 and this will follow our typical truck refurbishment and replacement cycles. Our haul trucks contribute up to 80% of the diesel emissions at our sites and we therefore expect to be taking the equivalent of more than half a million internal combustion cars off the road by switching our trucks to hydrogen.
Anglo American has continued to accelerate its decarbonisation initiatives and today has added an ambition to reduce its Scope 3 emissions by 50%, also by 2040. Whilst we know that this ambition is challenging, the work we have done in the past two years has helped us to understand more fully our own Scope 3 inventory and the levers that we can pull to influence the reduction of those emissions. This work will inform our development and ongoing refinement of our Scope 3 reduction pathway, while recognising that our ability to significantly reduce our Scope 3 emissions is dependent both on the steel sector decarbonising and a supportive global policy environment.
Beyond the natural depletion of certain assets in our portfolio by 2040, we are working to reduce emissions in our supply chain and logistics, particularly in shipping, and working with customers and technology partners on low carbon steelmaking technologies. If the decarbonisation of the steel sector accelerates, in part because of the partnerships we are building, this would allow us to go further still.
Aligned with Anglo American’s Purpose, we recognise that our own resilience to climate change is not enough. We also have a role in supporting our host communities to thrive in the transition to a low carbon world. We are continuing to explore what mining can do to help ensure a ‘Just Transition’ – one that considers the impacts of this change on employees and communities.
Anglo American’s concept of a regional renewable energy ecosystem for South Africa not only contributes towards decarbonising our own business but also serves as a catalyst to support South Africa’s overall decarbonisation journey and ambitions for a Just Transition. We believe that the provision of new sources of clean, reliable and affordable energy could provide a stimulus for wider socio-economic benefits for businesses and communities across South Africa – supporting long-term, sustainable economic growth in the country.
We also believe we can bring our experience of transition from our mine closure planning, working in partnership with organisations such as the Council for Inclusive Capitalism, to provide practical examples of what business can do to enable a Just Transition, also applying the principles of Anglo American’s own Collaborative Regional Development (CRD) programme.
CRD is Anglo American’s innovative partnership model to catalyse scalable and sustainable development opportunities that are wholly independent of mining to regions around our operations, and it is at the heart of our Sustainable Mining Plan. It is a model that we are already using in the regions around our operations in Botswana, Brazil, Chile, Peru, South Africa and the UK, bringing socio-economic resilience to communities and regions.
“Of course, a sustainable business is competitive, resilient and agile – it listens and responds through economic and social cycles – underpinned by non-negotiable values and guided by a clear purpose. We believe that we are doing all the right things to decarbonise our business and to work with partners to help decarbonise our value chains. Where we can accelerate towards our targets and ambitions, we will. Our approach reflects the simple fact that climate change is affecting us all and that navigating the transition is both a shared and urgent endeavour.”