Who we are
Sustainable development review
Mining is a long term, capital intensive business in which assets are often situated in remote locations and can last for 30 years or more. This extended timescale means that, if we are to deliver financial returns to local communities, host governments and our shareholders, we need economic, environmental and social stability and strong governance.
Starting with the pioneering work of former Rio Tinto chairman Sir Robert Wilson, a focus on sustainable development has become an integral part of the way in which Rio Tinto conducts its business. This is reflected throughout the Group, from explicit recognition of the value of sustainable development in The way we work and regular references to the benefits of sustainable development in statements by our chairman Paul Skinner and chief executive Tom Albanese; to implicit recognition of sustainable development thinking in the way we make decisions about finding, acquiring, developing, and operating assets around the world.
This year we have integrated the annual Sustainable development review with the Annual report and financial statements. This change allows us to reach a wider audience and improve links between corporate, local and economic issues. A full account of our 2007 economic, social, environmental and governance programmes and performance is available in the sustainable development section of the Rio Tinto website: www.riotinto.com/ourapproach/sustainabledevelopment.asp.
Business case for sustainable development
We are committed to contributing to sustainable development. Not just because it is right to safeguard the health of the planet for future generations, but because it also makes sound business sense.
By earning a good reputation for our care of the environment and contribution to social improvement and the economic conditions of local communities within a strong governance structure, we gain improved access to land, people and capital, the three critical resources on which our business success is built.
We believe this yields a range of long term benefits such as:
- better return for our shareholders;
- improved management of risks;
- reduction in our operating costs;
- greater business opportunities;
- attracting and retaining high calibre employees;
- maintaining or improving the value and quality of our products but with less impact on the environment; and
- better development opportunities for and relations with local communities.
All of these factors help differentiate Rio Tinto from its competitors and contribute to our goal of being the undisputed sector leader in maximising value for our stakeholders.
The business case for sustainable development was demonstrated earlier this year at our Mesa A/Waramboo iron ore project in Australia. As part of our biodiversity baseline assessment for the project area a number of new species of rare air breathing subterranean invertebrates (troglofauna) were discovered by Rio Tinto. This discovery could have stopped the project from proceeding. However, building on our biodiversity management framework, additional research was conducted and an enlarged mine exclusion zone was developed to protect these species. Rio Tinto's revised plans were endorsed by the Western Australia Environmental Protection Agency, allowing the project to proceed to the next phase.
Reporting boundaries
Rio Tinto and Alcan data is presented side-by-side where possible. In many cases data is not directly comparable due to differences in definitions. Moving forward, former Alcan operations will adopt Rio Tinto definitions and consolidated data will be presented from 2008.
Rio Tinto data is reported for calendar years and, unless otherwise stated, represents 100 per cent of the parameter at each managed operation, even though Rio Tinto may have only partial ownership. Information on our data definitions can be found in our online report.
Alcan data is also reported for calendar years and represents 100 per cent of the parameter at each operation that was managed by Alcan, with the exception of greenhouse gas emission and energy use data, which are presented on an equity share basis.
Rio Tinto reports in line with the Global Reporting Initiative (GRI) G3 guidelines. Accordingly, we use a materiality assessment to select what information should be included in our report. Please see our online report for further details. We declare that our web based GRI report is aligned with Application Level A+.
Our business units and exploration group also produce their own local sustainable development reports. These 2007 reports will be available on the Rio Tinto website from the end of April 2008.
Managing sustainable development
We believe that making a contribution to sustainable development should be integrated into all aspects of our business and that a structured framework is needed to ensure that we accomplish this goal.
Our sustainable development policy is laid down by the board of directors in The way we work and applies across the Group to drive our business culture. The board committee on social and environmental accountability ensures that we have the policies, standards, systems and people in place to meet our social and environmental commitments and that our businesses, projects, operations and products are developed and implemented in line with our commitment to sustainable development.
Rio Tinto is a founding member of the International Council on Mining and Metals (ICMM), a body that provides sustainable development leadership for the industry. As a member of the ICMM, we are committed to superior business practices in sustainable development, implementing the sustainable development framework and complying with their policy statements.
To help explain the concepts of sustainable development, both to existing employees and newcomers, we continue to use training and awareness raising tools throughout the Group. This includes an e-learning programme for managers called Chronos, developed by the World Business Council for Sustainable Development and Cambridge University in the UK. By the end of 2007 more than 2,000 managers had signed up to the programme.
In 2007 we started implementing our "mine of the future" project in Western Australia to demonstrate better ways of mining through automation and remote operations. Key building blocks for automated mine to port iron ore operations are currently being commissioned. These include controlling mining from a remote centre 1,300 kilometres away in Perth; using driverless trains to carry ore; introducing a driverless 'intelligent' truck fleet and remote control production drills. We aim to be the leader in integrated and automated mining and transport in the Pilbara, decreasing the footprint required for infrastructure and leading to greater efficiency, lower production costs and more attractive working conditions that will help recruit and retain staff in the highly competitive labour market.
Rio Tinto's demonstrated values in contributing to sustainable development are matched by those of Alcan. This is greatly assisting in the integration of the two businesses. Alcan was also a leader in combating climate change by reducing greenhouse gas emissions from its aluminium smelting operations. It developed the most advanced smelting technology in the industry and has significant access to low carbon footprint hydro-electric power. Rio Tinto Alcan is building a US$180 million facility to recycle spent potliners used in the aluminium smelting process. This promises to provide a long term solution to one of the environmental problems associated with aluminium smelting.
External recognition
In 2007, Rio Tinto was listed on the FTSE4Good and Dow Jones Sustainability World Indexes. We achieved platinum ratings on the Business in the Community's Corporate Responsibility, Environment and Community indexes and also achieved the maximum score on the Climate Disclosure Leadership Index. We were again rated highest in the metals, mining and steel sector.
