Diversified miner Glencore’s board believes environmental, social and governance (ESG) responsibilities related to its coal assets are best managed by the company as a responsible operator, rather than leaving those responsibilities to become someone else’s problem, Glencore chairperson Kalidas Madhavpeddi said on April 21 with the launch of the company’s 2021 Sustainability Report.

“It is not just that simply passing carbon-intensive assets to others will not get the world to net zero – it is likely to be less effective in doing so while increasing other ESG risks and reducing transparency,” he said.

Madhavpeddi said the diversified miner’s board believed its responsible stewardship model for the company’s coal assets was the correct one for all stakeholders.

“Climate change is a board-level standing agenda item. In 2021, we revised our internal climate change governance framework to drive implementation of our climate strategy and the supporting work programmes.

“Strategic decisions in respect of our climate programme are made by the board and our new climate change taskforce has its objectives set by the board, which oversees its work,” he explained.

He said Glencore would continue to review the alignment of the mining industry organisations’ positions and activities relating to climate change and energy with its own climate change position and the goals of the Paris Agreement.

“If an industry organisation adopts an approach inconsistent with our values, code of conduct or political engagement policy, or the goals of the Paris Agreement, we will take appropriate action. This may include constructively engaging with the organisation or, if no progress can be made, resigning from that organisation and establishing independent advocacy,” Madhavpeddi noted.

CEO Gary Nagle added that, during 2021, the roll-out of new and revised group-wide policies and their accompanying governance documents had initiated a more robust and consistent approach to health, safety, environment, community and human rights at all of the company’s operations.

“We also recognise our stakeholders’ keen focus on climate change and their expectation for Glencore to align its business strategy with the goals of the Paris Agreement. We undertake extensive engagement with interested stakeholders, particularly with investor group Climate Action 100+,” he added.

During 2021, Glencore revised its commitments to reducing its total emissions footprint towards its goal of net-zero total emissions by 2050. The revised targets were a 15% reduction by 2026 when compared with 2019 levels; and a 50% reduction by 2035 against 2019 levels.

“We use the Intergovernmental Panel on Climate Change (IPCC) scenarios to illustrate our compliance with the net-zero ambition. Our 2026 target lies within the range of IPCC 1.5 °C scenarios – IPCC SR1.5 – and our 2035 target is aligned to the International Energy Agency Net Zero Emissions by 2050 scenario, which is consistent with IPCC SSP1-1.9,” Nagle explained.

IPCC SSP1-1.9 is the IPCC's most optimistic scenario, where global emissions are cut to net zero by about 2050.

The 2021 Sustainability Report incorporates Glencore’s ESG data book, which aligns with the Global Reporting Index’s reporting requirements and maps to the International Council on Mining and Metals Mining Principles, the United Nation’s Global Compact’s principles and the reporting requirements of the Sustainability Accounting Standards Board’s Metals and Mining Sustainability Accounting Standard.

The report focuses on areas identified as material to Glencore, its assets and both its internal and external stakeholders. In addition to providing an overview of the approach, performance and activities during the year for each material topic, the report includes case studies on the work undertaken by the company’s commodity departments to drive improved performance in its operations.