Meeting the environmental challenge

Rio Tinto's approach to society issues and the environment continues to be driven by the overarching business strategy of the Group: maximising opportunities, managing risks.

The framework we use to improve environmental performance provides a coherent way of assessing and addressing risks to the business.

It brings together Group policies, mandatory standards and strategies to tackle key risks using work plans, public targets and metrics. The results achieved are communicated internally and externally and are used to guide further strategic and operational developments.

An effective response to challenges such as biodiversity, climate change and water use is at the heart of sustainable business success. These challenges carry their own financial components and implications.

Moreover, society expects business to contribute to solutions to these challenges. Conversely, any business ignoring such expectations is only adding to the challenges it will have to face in the future.

For Rio Tinto, contributing to solutions is not about rhetoric; it is about results and performance. By setting public targets and reporting against them, we seek to demonstrate a genuine commitment to engage with and benefit society and the environment.

However, measuring success is not always easy, especially in areas such as biodiversity.

To find ways of understanding and measuring the net positive or net negative impact of business activities on biodiversity, we are working with external groups and academic scientists.

This is a long term commitment, as it can take years to assess biodiversity impacts, to identify the actions that lead to success, and to define the lessons from those actions that can be applied elsewhere.

In relation to climate change, we are working at three levels: with governments and stakeholders, to develop more beneficial policies and practices; with technologies and processes to reduce emissions from our own operations; and with our customers, to encourage and enable the more efficient use of our products in the value chain.

This work is essential in a world that needs increasing volumes of our products - both to maintain standards of living in developed nations and to lift millions out of poverty in emerging economies.

Our efforts resonate with the main conclusions of the UK Government's Stern Review on the economics of climate change, namely that action is needed now; that economic growth and reductions in greenhouse gas emissions are both essential; and that a range of policies and approaches will be needed to achieve these.

Our own operations - including the electricity we buy - emit 28.3 million tonnes of CO2 each year, while CO2 emissions from coal mined by Rio Tinto and burned by our customers around the world are about 350 million tonnes each year.

So Rio Tinto is developing technical solutions in collaboration with other companies, scientists and governments to deliver "cleaner coal" through increased operating efficiency in our own businesses and in those of our customers.

Water, like energy, is a primary asset for global survival and development. In 2006, Rio Tinto continued the implementation of its strategic approach to water management at all Group mining and processing sites. Our goal is to ensure that the business risks related to water are understood and that water is more efficiently managed and valued as a vital business and community asset. In this connection, Rio Tinto was invited by the Australian government to co-chair a task force of industry and government representatives to develop a strategic framework for water management. At the official launch of the framework, industry's leadership in promoting a strategic approach to water management was recognised.

This work should encourage better water management by industry, and help to position Rio Tinto as a responsible water user.