Anglo American is a multinational mining company based in Johannesburg and London. It is the world's largest producer of platinum, with around 40% of world output, as well as being a major producer of diamonds, copper, nickel, iron ore and metallurgical and thermal coal.
Engagement objectives and issues
As a major extractives business Anglo American is one of the world’s largest emitting companies of greenhouse gases1. It has a significant impact on the local environment through air pollution, and land and water use. To operate in a low carbon world and contribute to the UN’s sustainable development goals, the mining sector needs to define and deliver a new way of operating with minimal negative environmental impact.
Our engagement with the company on its environmental impact intensified in early 2016 around a successful resolution co-led by Hermes EOS. This asked the company to publish a stretching climate-related target and undertake further analysis and disclosure of the resilience of its business to low-carbon scenarios. At the annual general meeting (AGM) that year the chair agreed to take action on setting carbon targets following the completion of the business restructuring, once the shape of the new portfolio was known. We returned to the AGM in 2017 to again urge the company to set and publish greenhouse gas reduction (GHG) targets and advance its understanding of climate risk.
We have continued to engage regularly, both independently and as the co-lead for the company under the Climate Action 100+ (CA100+) collaborative investor initiative. We have seen the company’s commitment and ambition on climate change continue to grow. We have seen an increase in external engagement to gain industry expert input and collaboration on external initiatives that seek a more sustainable and low carbon path for the industry2.
Changes at the company
At its sustainability day in March 2018 the company launched a strengthened approach to climate change including a longer-range climate target to reduce net GHG emissions by 30% by 2030, based on 2016 levels. In April 2018 we led a delegation of investors to the AGM on behalf of CA100+ with questions and encouragement on long-term climate strategy, risk analysis, emissions relating to the use of the company’s products and its approach to policy advocacy. In response to our questions the chair confirmed the 2030 target was stretching and employed a science-based methodology and that the company aims to ‘be in a position to start operations’ at a carbon-neutral mine by 2030.
We continue to engage with the company on enhanced disclosure on climate-related financial risks, and have agreed to meet a set of relevant senior management representatives early in 2019 once the company’s first detailed report on climate scenarios has been published. We also await the publication of the results of the company’s review of the alignment of its climate policy with industry associations.