While the global gold industry is broadly on track to align with a 2 °C climate target by the end of the current decade, more action is required if the industry is to meet, and surpass, the 1.5 °C mark.

This is according to a new report from Wood Mackenzie, which plots the forecast progress of gold miners out to 2030 against the reduction in emissions required to align with the 2 °C and 1.5 °C targets of the Paris Agreement.

It is expected that the cleaner energy projects that have been implemented and planned will result in savings of more than three-million tonnes a year of carbon dioxide- (CO2-) equivalent, which is 5.5% of the gold industry’s total 2019 emissions.

Wood Mackenzie points out that although the gold industry’s emissions in 2019 totalling about 55-million tonnes of CO2-equivalent of Scope 1 and Scope 2 emissions are small in comparison with other areas within the energy sector, the industry must not become complacent.

“The gold industry cannot afford to rest on their laurels. The focus on the ‘E’ in ESG has never been greater and with COP 26 taking place later this year, we expect the spotlight on sustainability to intensify,” says Wood Mackenzie head of gold research Rory Townsend.

He warns that miners that are not striving to reduce their environmental footprints are likely to lose favour among investors and struggle to secure project financing.

“Proof that this is not a box-ticking exercise is evidenced by several miners executing sustainability-linked credit facilities, such as those agreed by Newmont in March and Polymetal increasing theirs in May.”

The location of gold assets in operation is expected to be an important determining factor in reducing emissions, with several carbon-intensive mines due to go off line before 2030. However, in the past 12 months, mine-life extensions are materialising alongside the elevated gold price at companies such as Equinox, Alamos and Yamana. Ultimately, if mine-life extensions continue, Wood Mackenzie says the industry may need to see even more aggressive action to reduce emissions to align with carbon reduction targets.

“It is apparent that some mines have a lot more ground to cover than others. Those that are beholden to carbon-intensive grids could struggle, unless the process to approve on-site renewable alternatives accelerates markedly,” adds Townsend.