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Energy and climate change

Rio Tinto has publicly acknowledged the reality of climate change for more than two decades. We recognise that it is largely caused by human activities and has the potential for a lasting, negative impact on our business, our communities and the world. Indeed, from forest fires to hurricanes to loss of biodiversity, we are already experiencing some of these negative impacts.

In 2015, we supported the outcomes of the Paris Agreement and the long-term goal to limit the global average temperature rise to well below 2°C.

We believe the best outcomes will be achieved through collective action by governments, by business and by consumers, working together to address climate change. In signing the Paris Pledge, we have shown our willingness to play our role to support climate action. We believe we can and should be part of the solution.

We also appreciate that the necessary reductions in global greenhouse gas (GHG) emissions must be achieved without compromising the availability of secure, affordable energy.

In February 2019, we published our first climate change report informed by the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD). We believe that companies, including ours, should be clear about how they plan to tackle climate change.

At Rio Tinto, our purpose is to produce materials essential to human progress. As such, we want to be part of the solution to help address the climate change challenge. Our aim is to make sure our business, and those in our supply chain, continue to deliver economic and social benefits in the short, medium and long term, as we assist in the transition to a low-carbon future.

J-S Jacques, chief executive

As we look to the future, Rio Tinto will take action in four key ways:

Supply essential metals and minerals for the transition to a low-carbon economy
Reduce our own carbon footprint
Identify and assess physical risk exposures
Partner and advocate for policies that advance climate goals

Rio Tinto supplies the metals and minerals used to help the world grow, and these materials have a key role to play in supporting the transition to a low-carbon economy.

Supplying the materials essential to building a low-carbon economy

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Resilience to physical impacts

We consider climate risks over the life of our operations, from the way we design and develop new projects through to closure and beyond. We have already seen the impacts of climate change at many of our sites and are using scenarios to assess further medium to long-term risks.

Partnering and advocating for policies that advance climate goals

We are actively involved in climate change policy engagement across the jurisdictions in which we operate and which are important to us. We are guided by our policy position that supports market mechanisms. We believe this is the best way of achieving emissions reductions, and we support a market-based price on carbon. Underpinning this we encourage the establishment of stable regulatory frameworks that support investment, competitiveness across jurisdictions, and the use of revenues raised from carbon pricing to facilitate the transition to a low-carbon economy. We also believe effective action requires a level playing field, not only across our industry, but across all industries and jurisdictions: a challenge as serious as climate change mandates transparency, collaboration and a shared contribution to the solution.

Managing our own footprint

Many of our operations are energy-intensive and we are taking action to improve both productivity and efficiency as we reduce emissions. This starts with making sure we have a strong understanding of how energy in our business is used, constantly assessing low-emission technology opportunities, and building our own capability to innovate.

We have a clear understanding of the scope 1, 2 and 3 emissions from each managed operation. 71% of our electricity consumption already comes from renewable sources, which has a positive effect on our scope 1 and 2 emissions and represents a significant and growing competitive advantage. Our scope 3 emissions are mostly related to iron ore, and therefore represent scope 1 emissions from the steel industry. As we manage our carbon footprint, it is important to recognise that the scope 1 and 2 emissions intensity of our operations also vary greatly across our portfolio.

In 2008, Rio Tinto set its first climate change target, to reduce the GHG emissions intensity of our operations by 10% over five years. Our current target ends in 2020 by which date we plan to have reduced the emissions intensity by at least 24% against a 2008 baseline. Since 2008 we have consistently beaten our targets and are on track to do the same by the end of 2020. The absolute emissions from our operations have also reduced over the same period, since 2008, by 43%. The sale or closure of assets have contributed to reductions in both emissions intensity and absolute emissions.

We have committed to substantial long-term decarbonisation by 2050, and work is underway to define new emissions reduction targets to take effect when current targets expire in 2020.

Our
approach to
climate change