Glencore on track to reduce its footprint

Glencore on track to reduce its footprint
JOHANNESBURG - Glencore, the world's biggest commodity trader, which has a listing on the JSE, said yesterday that it was on track to reduce its carbon footprint by 2035 after recording $2.8 billion (R41.8bn) in impairment charges for its coal business. The company said it expected the depletion of its coal resource base in Colombia, and to a lesser extent South Africa and Australia, to contribute to this reduction.

“Our Australian operations are expected to maintain a longer and flatter production profile and will continue to produce high-quality coal, which will be required to meet expected levels of global steel production and energy demand in Asia,” the company said.

Pressure from investors is mounting for mining houses to embrace climate change by limiting greenhouse gas emission.

Black Rock, the world's biggest asset with $6.8trillion under its management, is working to reverse the impact on greenhouse gas emissions, saying at the World Economic Forum last month it would make climate change central to its investment decisions.

Glencore said that its portfolio was well-positioned to support the transition to a lower-carbon economy, while also meeting the need for universal access to reliable energy.

“Our business will continue to evolve over time as we look to deliver on our climate objectives as part of a Paris consistent strategy. At present, our projection indicates a reduction of our Scope 3 emissions - those arising from the sale and use of our own products, notably oil and coal - of approximately 30percent by 2035,” said the group.

Glencore said the mining industry needed not only to ensure that the metals and minerals required were produced and sourced responsibly, but also that it was at the forefront of supporting further productivity gains and emissions abatement.

In 2017, Glencore announced its first target of reducing greenhouse gas emissions intensity by 5percent by 2020 compared to a 2016 baseline.

“We are currently on track to meet this target. Glencore recognises the importance of continued reductions of greenhouse gas emissions from our operations. We are developing new, longer-term targets based on policy and technological developments that support the Paris Goals, and intend to make this public in our annual report in 2020. We will report annually on our progress,” said the company.

Glencore said to date it had "reduced our Scope 1 and 2 emissions intensity by 9.7percent compared to the 2016 baseline, achieved by a range of measures including abatement, use of renewable energy sources and production changes at our operations".

In terms of the 2019 financial results, Glencore said adjusted earnings before interest, taxation, depreciation and amortisation was $11.6bn, down 26percent from 2018.

Glencore shares closed 2.25percent lower at R14.77 on the JSE yesterday.