Minerals Council Of Australia Releases Zero Emissions Goal
The plan outlines how the organisation aims to achieve net-zero emissions, not only in Australia, but around the world. The plan highlights the commitment the Australian minerals industry is taking to decarbonise the economy, address climate change and meet net-zero targets globally.
The plan also outlines how both the councils and the members involved are planning on taking action on climate change, with the importance of the implementation and impact of technology in reducing emissions highlighted.
In a press statement, MCA CEO Tania Constable said: “With this plan, the sector acknowledges the critical importance of technology in reducing emissions. The minerals industry works with manufacturing and innovation partners to invent, develop and deploy new techniques and technologies.
“It is clear that the scale of the technology-led transformation required will not occur without the minerals and raw materials provided by the Australian mining sector.
“The industry sees great opportunities for minerals such as lithium, cobalt and copper in all forms of transport infrastructure, communications and energy systems.”
Two elements are set out under the plan, with one to endure a ten-point framework to support three core objectives, whilst the other is a comprehensive three-year rolling work plan, comprising 30 activities.
The climate plan has come under fire from environmental and shareholder groups, with the body failing to set hard targets on reduced emissions and the use of thermal coal. The plan has failed to set a target date for net-zero emissions to be reached, or for coal mining and coal-fired power generation to be phased out.
“This is embarrassing and woefully inadequate: the MCA can’t even commit to net-zero emissions by any date. What type of plan is this without any dates or targets?” said Dan Gocher, Australian Centre for Corporate Responsibility’s director of climate and environment.
The UN’s climate change panel has advised that global emissions must meet net-zero by 2050 to have any chance of keeping global warming to 1.5C.
Another campaign group, Australia 350, described the plan as meaningless, lacking “clear commitments to advocate for emissions reduction targets that will ensure we keep global warming below 1.5C or even dates by which we should hit net-zero emissions.”
Mining investors demanding sustainability
Mining company shareholders are demanding change from an industry whose reputation has been battered by deadly collapses of mine waste storage facilities in Brazil, and Rio Tinto’s destruction of sacred rock shelters in Australia, report Reuters.
Companies are responding with changes to the structure and skillset of their senior management - a shift investors and governance experts say is sorely needed to mitigate risk in an inherently hazardous industry.
“The level of understanding and capability at board level is insufficient at the moment in the mining sector, and it doesn’t yet in our view support the transition of these companies to best practice,” Andy Jones, metals and mining lead at investment manager Federated Hermes, said.
Brazil’s Vale SA - keen to show its dedication to safety and sustainability after two tailings dam failures in less than four years - recently announced the biggest shakeup in its board since it was privatised in 1997.
Seven of the 13 members of the new board set for approval this month have extensive experience in ESG and sustainability-related issues, up from five previously. The company has also added requirements for nominees to have experience in community relations.
AngloGold Ashanti last year appointed as a non-executive director a mining governance adviser to the United Nations Economic Commission for Africa, Kojo Busia, after the board identified the need to increase its efficacy in ESG oversight, it told Reuters.
Barrick Gold also bolstered its ESG credentials with the appointment of World Bank executive director Anne Kabagambe to its board in November, highlighting her experience in international development.
Some miners have also begun tying executives’ and directors’ bonuses directly to measurable ESG outcomes. Rio Tinto has connected 15% of executives’ annual bonuses to ESG metrics for the first time.
Bonuses for the director of Vale’s executive board for safety are calculated based only on health, safety, and sustainability indicators.
But companies must also improve internal reporting and foster a culture of openness if the industry is to prevent a repeat of past mistakes, governance experts say.
“The remuneration is obviously key in terms of setting incentives, but that on its own doesn’t work unless the board is getting the quality of information and there is a spirit of independent thought and challenge,” said Joanna Hewitt, a partner at law firm Baker McKenzie in London who advises companies on corporate governance.
For boards to exercise proper oversight, directors need access to information that bypasses management, Daniel Smith, a governance advisor with CGI Glass Lewis, told Reuters last November.
To achieve that, a specialist heritage advisor reporting directly to the board could be appointed, or a board could have an ESG subcommittee responsible for stakeholder management, including of traditional owners, he said.
To help investors track their progress, mining companies must publish more data on issues like community engagement, water and air quality, and rehabilitation and closure plans, said Charlotte Valeur, founder of governance advisory firm Global Governance Group.
As a result of investor pressure, more mining companies are reporting so-called scope 3 emissions data, a measure of downstream CO2 emissions by metal consumers. Data transparency is key, says Valeur.
“It has to be deeds, not words,” she said. “What it’s easy to do is have some fluff - but what we want is hard numbers.”