Newmont launches first climate strategy report
Newmont has launched its inaugural Climate Strategy Report, prepared in accordance with the Task Force on Climate-related Financial Disclosures. The report outlines the Company’s climate-related risks and opportunities, strategic planning, and pathways to achieving Newmont’s climate targets. Additionally, the report identifies the technology necessary to transition to a low-carbon economy.
Newmont committed to fighting climate change
“It is our firm belief that climate change is one of the greatest challenges of our time and that Newmont must be a catalyst for change. It is our responsibility to operate our business in a sustainable way in order to generate long-term value whilst mitigating climate change’s effect on our operations. We continue to hold ourselves to high standards of performance while continuing our commitment to transparent reporting,” said Newmont’s President and CEO Tom Palmer.
“Today we send a clear signal that Newmont has moved beyond managing climate change as a sustainability issue to incorporating these risks and opportunities into our business strategy and business planning process.”
Highlights of Newmont’s Climate Strategy Report:
- 2030 greenhouse emissions targets approved by the Science Based Target initiative (SBTi): To meet SBTi’s criteria in line with climate science, Newmont’s 2030 targets are set at 32 percent reduction for Scope 1 and Scope 2 emissions and 30 percent reduction for Scope 3 emissions, supporting the Paris Agreement. Newmont is one of only two gold mining companies globally and one of 12 companies on the S&P 500 to have climate targets approved by SBTi.
- Climate scenario analysis: Newmont developed three scenarios – considering both transitional and physical climate risks – to understand the potential impacts to our business, strategies and long-term financial resiliency. The scenarios include business as usual; planned energy transition during the 2020s; and delayed response to post-2030.
- Pathways to achieving 2030 targets and the 2050 ultimate goal of being carbon neutral: Includes projects necessary to achieve Scope 1 and 2 emissions reduction targets, including investing in energy optimization and power supply conversion. Additionally, the report details the collaboration and partnerships necessary to achieve the Company’s Scope 3 emissions reduction target and the measures necessary to enhance climate change resiliency.
- Newmont’s Carbon Reduction Fund (Fund): In 2020, Newmont committed $500 million to support its climate targets. Over the next five years, the Fund will support implementation of technologies, emissions reduction projects and other climate change initiatives as part of Newmont’s pathway to achieving the Company’s 2030 targets, a foundation for the Company’s 2050 ultimate goal of being carbon neutral.
Newmont’s Climate Strategy Report continues to demonstrate the Company’s commitment to transparency, reporting on its most material sustainability issues.
To support the investment community in their understanding of Newmont’s environmental, social and governance (ESG) practices, Newmont will host a webcast on July 8 to discuss its sustainability reporting suite, available for download on the Company’s website.
BHP deliberates ditching fossil fuels for greener mining
The world’s biggest miner, Australian-based BHP, is supposedly considering withdrawing from a multi-billion dollar contract, which would see the company generate more than US$2bn due to mounting pressure over aligning its business with ongoing climate concerns and ESG-compliance measures.
Exiting the agreement would mean BHP escalate its distancing from oil and gas and subsequently cut down on the amount of fossil fuels used by the company when mining.
It’s estimated that the petroleum business being debated upon could actually be worth around US$15bn but is still under talks to be put up for sale.
Global Mining Giant Considers Greener Future
BHP has made itself clear that it wants to avoid becoming unable to sell its assets. As competition within the market increases following higher numbers of oil giants wrestling with investors to deal with climate pressure, so too are the number of mining rivals looking to make environmental changes for the future.
However, BHP currently has the upper hand as a stalwart mining company that established itself back in the 1960s, allowing it the time to grow and dominate over other fast-appearing mining competition.
Mike Henry, BHP Chief Executive, has an optimistic outlook for the future of oil and gas despite worries over rising demand to align his business with the Paris Climate Agreement. Henry argues that prices remain promising due to a lack of industry-wide investment.
BHP’s petroleum business won’t be easy to say goodbye to. Forecasted to generate around 6% of profits during the ongoing financial year (US$2bn), and around US$1.6bn revenue produced by BHP petroleum in the six months leading to December 2020, BHP is due to take a hit no matter what agreement they choose.
On the other hand, distancing itself from thermal coal and petroleum would arguably aid the company’s case to possible - and valuable - investors who may be required to fund BHP’s increased output to places such as Australia and Mexico in the near future.
BHP considers cutting billion-dollar contract to aid climate
An exit away from petroleum has the potential to be “a powerful corporate catalyst,” says Dominic Kane, Analyst at JP Morgan.
“We believe an exit would likely ring-fence BHP’s exceptional cash flows for non-fossil fuel organic growth, mergers and acquisitions and generous shareholder distributions since BHP could avoid a major new capital investment phase this decade in petroleum.”
BHP is also set to sanction a giant US$5.7bn Canadian potash mine in August of this year, already seeing potash as a long-term substitute for gas and oil going into the future. The company has also previously announced plans to abandon its 80% share in its joint endeavour with Mitsui, owner of two lower-quality mines in Queensland, Australia.
BHP is scheduled to report its annual results on August 17, after which it may become clearer on whether the company will choose to focus its shift to a low-carbon economy or whether it will stay with its current contract into the coming year.