Antofagasta releases first-ever Climate Change Report
21st December 2021
The report reviews the advances in each of the five pillars of Antofagasta’s Climate Change Strategy, approved last year and designed to mitigate climate-related impacts and increase the resilience of both the Group’s operations and surrounding communities.
Recognising climate change as one of the greatest challenges facing the world today, Antofagasta acknowledges its role and responsibility to be part of the solution. As a copper producer, its mining division can contribute by sustainably and responsibly supplying a metal that is essential for low-carbon technologies such as the generation of renewable energy and electromobility. At the same time, the Group also recognises the importance of decarbonising its own operations.
In response, it has defined a Climate Change Strategy, which it is currently implementing following approval by the Group’s Board of Directors in 2020. The Strategy has five pillars - developing climate change resilience, reducing greenhouse gas (GHG) emissions, managing strategic resources, managing the environment and biodiversity, and integrating stakeholders - and is designed to strengthen the Group’s mitigation and adaptation response.
The Group’s first-ever Climate Change Report, reviews advances in each of these five pillars, and is the latest in a series of specialised reports prepared by Antofagasta to customise information for different stakeholders. Although the third in the series, it is the first in which the company issues a position statement, and also the first to be presented to, reviewed by and approved by the Board – a reflection of the importance the company is placing on the issue of climate change.
Emissions reduction is central to the Climate Change Strategy and the company has committed to new and more ambitious emissions reduction targets. As well as carbon neutrality by 2050 - in line with Chile’s national commitment - they include the shorter term target of a 30% reduction in emissions by 2025, compared to 2020. This is supported by the mining operations’ gradual switch to electricity generated exclusively from renewable sources, which will be completed in 2022.
René Aguilar, VP of Corporate Affairs and Sustainability, however, stresses that the Strategy - driven by the Board of Directors and CEO Iván Arriagada - is not focused on just lowering emissions. “There are other challenges that go hand-in-hand with climate change that need to be harmoniously integrated,” he says. “We’re talking about adaptation, evaluations on how this impacts physical risks, the transition risks to the company, and how to work with strategic resources such as energy and water, manage our impact on biodiversity, implement the circular economy and include stakeholders.”
Once the Board approved the Climate Change Strategy, a Climate Change Committee was established and began work, looking to maximise engagement and collaboration across the different areas and levels of the organisation.
“The beauty, and at the same time the challenge, of implementing the Climate Change Strategy is that it isn’t located in just one area of the company. The Environment team is responsible for the strategy and making sure things happen, but many of the issues are managed and led by other areas of the company,” says Alejandra Vial, Environment Manager at Antofagasta.
The Strategy is supported by a range of initiatives to increase awareness of climate-related issues throughout the organisation as well as hard-data indicators that impact the Group’s operations and are measured on scorecards. Employees’ economic incentives have climate change components, and all of Antofagasta’s operations need to meet emissions targets defined for the year, aligned with the Group’s plan to lower emissions, notes Aguilar. The Group is also now incorporating new controls, including an internal carbon price to incentivise the allocation of capital to projects and decarbonise operations. This will also be considered in tenders and the award of contracts to suppliers. “Our Climate Change Position Statement is interwoven with our business decisions – it goes much further than increasing awareness within the company,” says Aguilar.
To complement and support the Climate Change Strategy, Antofagasta is currently drawing up an Energy Policy (in line with the requirements of Chile’s new Energy Efficiency Law), a Water Policy and an updated Biodiversity Standard, seeking to set ever more specific targets for different aspects of our activities related to climate change, such as efficiency in the use of all resources.
For the Group’s mining operations, all of which are located in water-stressed areas, this strategic resource is a particular concern. The Group is a pioneer in the use of raw sea water in the Chilean mining industry and is now building a desalination plant at its Los Pelambres operation. As a result, it anticipates that, subject to permitting, raw or desalinated seawater and reused or recycled water will account for 90% of the Group’s mining operations’ consumption by 2025. As well as ensuring their supply security, this will free continental water for use by nearby communities.
Another key aspect is the circular economy. In the future, this may become a sixth pillar of our Strategy, or be addressed as a standalone issue in itself, in order to place more emphasis on it. “I believe that climate change and the circular economy will be the two main issues that the mining industry will need to address moving forward,” notes Aguilar.
As we transition to GHG emissions net zero mining, we also believe that transparent disclosure and communication with our different stakeholders is vital. This was one of the objectives of the Progress Report against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) we released in September 2021, and is now further reinforced by our Climate Change Report.