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Glencore furthers commitment to low carbon economy transition

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World Coal,

As one of the world’s largest diversified resource companies, Glencore has a key role to play in enabling transition to a low carbon economy. Glencore does this through its well-positioned portfolio that includes copper, cobalt, nickel, vanadium and zinc – commodities that underpin energy and mobility transformation. Glencore believes this transition is a key part of the global response to the increasing risks posed by climate change.

Glencore recognises climate change science as set out by the United Nations Intergovernmental Panel on Climate Change. It believes that the global response to climate change should pursue twin objectives: both limiting temperatures in line with the goals of Articles 2.1(a) and 4.1 of the Paris Agreement (’the Paris Goals’) and supporting the United Nations Sustainable Development Goals, including universal access to affordable energy.

To deliver a strong investment case to its shareholders, Glencore must invest in assets that will be resilient to regulatory, physical and operational risks related to climate change.

To meet the growing needs of a lower carbon economy, Glencore aims to prioritise its capital investment to grow production of commodities essential to the energy and mobility transition and to limit its coal production capacity broadly to current levels.

Following engagement with investor signatories of the Climate Action 100+ initiative, we are taking the following steps to further our commitment to the transition to a low carbon economy:

Paris-consistent strategy/capital discipline

As Glencore rebalances its portfolio towards commodities that support the transition to a low carbon economy, the intensity of Scope 3 emissions is expected to decrease. Starting in 2020, Glencore will start disclosing its longer-term projections for the intensity reduction of Scope 3 emissions, including mitigation efforts.

Glencore recognises the importance of disclosing to investors how the company ensures that material capital expenditure and investments are aligned with the Paris Goals. This includes each material investment in the exploration, acquisition or development of fossil fuel (including thermal and metallurgical coal) production, resources and reserves, as well as in resources, reserves and technologies associated with the transition to a low carbon economy. Starting in 2020, Glencore intends to report publicly on the extent to which, in the Board’s opinion, this was achieved in the prior year and the methodology and core assumptions for this assessment. These disclosures will be made in its Annual Report.

Public Scope 1 and 2 targets

In 2017, Glencore announced its first target of reducing its greenhouse gas emissions intensity by 5% by 2020 compared to a 2016 baseline. Glencore is currently on track to meet this target.

Glencore recognises the importance of continued reductions of greenhouse gas emissions from its operations. The company is developing new, longer-term targets based on policy and technological developments that support the Paris Goals, and intend to make these public in our Annual Report in 2020. Glencore will report annually on its progress.

Review of progress

Glencore reports annually on the progress in meeting its climate change objectives. The disclosure is included in our Annual Report and supported by further details in the Sustainability Report. Glencore is committed to transparency and will continue to publish data on our climate change performance on its website, including continued disclosure of its Scope 3 emissions.

The company will give consideration to how its climate change objectives can be reflected in the design of the relevant schemes for executive management.

In addition to its reporting under 1 and 2 above, every three years, Glencore will review any changes to the Nationally Determined Contributions (NDCs) in line with the Paris Agreement mechanism, and other relevant policy, economic and technology developments to assess societal progress in the energy transition and to update its scenario-based portfolio assessment.

Alignment with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations

Glencore was an early supporter of the voluntary guidance on consistent climate related financial disclosures produced by the TCFD. Glencore is pleased to publicly support the TCFD guidance and have started to implement its recommendations in its annual reporting.

Consistent with TCFD recommendations, as appropriate, Glencore will continue to disclose the metrics, targets and scenarios it uses to assess and manage relevant climate-related risks and opportunities.

Corporate climate change lobbying

Glencore believes that it is appropriate that it takes an active and constructive role in public policy development and to participate in relevant trade associations. Glencore acknowledges “IIGCC Investor Expectations on Corporate Climate Lobbying” and recognises the importance of ensuring that its membership in relevant trade associations does not undermine its support for the Paris Agreement and the Paris Goals.

Glencore will consider whether its membership in relevant trade associations aligns with the company’s stated positions in this statement. The result of this review, including any material misalignments identified and actions that will be taken, will be made public in 2019.

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