Open pit workings under low cloud

Climate change

Business impact

How we identify climate risk, assess it against three reference pathways, and carry it into investment and permitting decisions.

How climate risk is assessedThe exposuresScenario analysisPhysical exposure in the Andean setting

How climate risk is assessed

We identify climate risks through a structured process, assess them at asset level and at corporate level, rate them on a five-point matrix that weighs likelihood, financial impact, reputational exposure, operational disruption and regulatory implications, and record them in our climate risk register. The register is reviewed at executive level and is subject to Board oversight, on the cycle stated in the Climate Action Transition Plan.

We treat climate risks on the same basis as financial, legal and operational risks, and include them in project feasibility assessments and investment review, in permitting and licensing workflows, and in insurance and contingency planning. A climate risk that is not capable of altering a decision is not being used.

Key facts

Scenario set

Three reference pathways: IEA Net Zero Emissions by 2050, IEA Stated Policies, NGFS Delayed Transition.

Register review

The climate risk register is reviewed at executive level and is subject to Board oversight.

Water

We assess water as a physical, regulatory and social exposure through a single channel.

Financial effect

We publish the methodology, not a quantified financial effect.

The exposures

Category
Exposure
Measures required where the exposure is present
Physical, acute
Flooding, landslides and extreme heat events, particularly in high-altitude terrain
Water management and flood control appropriate to the site; climate-resilient design for mining and processing infrastructure; early warning arrangements for landslide and extreme weather exposure
Physical, chronic
Water stress, glacial retreat and biodiversity loss
The same design and water management measures, assessed over the life of the activity rather than the season
Transition, policy and legal
Carbon pricing, permitting timelines and sustainability-linked regulation
Engagement with regulators and communities on just transition; climate measures within executive remuneration arrangements
Transition, market
Shifts in demand for low-carbon metals and in stakeholder expectations
Assessment of climate-related opportunities on the same basis as risks, and their reflection in capital allocation
Transition, technology
Disruption from electrification and renewable energy innovation
Assessment of renewable supply options as part of energy procurement; supplier screening and value chain emissions mapping
Transition, reputational
Expectations of communities, providers of finance and counterparties on climate conduct
Disclosure structured against the recognised references; engagement recorded; positions taken consistently across audiences

Scenario analysis

We assess our climate resilience against three reference pathways.

Pathway
Character
What the analysis tests
International Energy Agency Net Zero Emissions by 2050 Scenario
Accelerated transition
Resilience of demand for the commodities in our portfolio; exposure to rapid carbon pricing and permitting change; the pace at which energy sourcing and electrification would need to move
International Energy Agency Stated Policies Scenario
Current trajectory
Exposure on the assumption that announced policy is implemented and no more; the physical exposure that follows from that trajectory
Network for Greening the Financial System Delayed Transition scenario
Disorderly transition
Exposure to a late and abrupt policy response, including step changes in cost and in regulatory requirement, and the resilience of financing arrangements to it

The analysis addresses the resilience of demand for the commodities in our portfolio under each pathway, our exposure to carbon-intensive value chains, and the extent to which resilience depends on energy sourcing and on the electrification of operations. We repeat it when the reference pathways are revised, and we undertake quantitative analysis where the underlying data supports it.

Physical exposure in the Andean setting

High-altitude terrain concentrates several exposures at once. Precipitation arrives seasonally and intensely, which drives flood, landslide and access risk on a defined annual cycle. Water availability is affected by glacial retreat over a longer horizon, and water is simultaneously a community priority, a regulatory subject and an operational input, which means a physical climate exposure and a social exposure arrive through the same channel. We treat them together rather than in separate assessments.

Financial effect

We do not publish a quantified financial effect of climate risk. Quantification depends on data the underlying activity does not generate, and a figure produced without that data would be an estimate presented as a measurement. We publish the methodology, the register and the scenario set, because those are what a reader needs in order to assess a figure when one exists.