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Speaker 1: They sustain a Perkins and you're listening to Switched on

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Speaker 1: the BIENNF podcast. If you listen regularly, you'll know that

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Speaker 1: we typically interview a bienny F analyst about something they've

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Speaker 1: been researching. However, on occasion we mix in external guests

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Speaker 1: to provide their perspective from the coal face of the

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Speaker 1: energy transition. And yes, that was an intentional pun because

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Speaker 1: today I speak with Anna Krutikov, head of Sustainable Development

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Speaker 1: at Glencore. Glencore is a multinational commodity trading and mining

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Speaker 1: Fortune five company and they have a net zero twenty

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Speaker 1: fifty ambition across their mining operations for scope one, two

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Speaker 1: and three, meaning not only the mining but the use

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Speaker 1: of their products like coal. Anna explains Glencore's targets, the

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Speaker 1: opportunities a mining company has in the energy transition around

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Speaker 1: things like battery metals, and some of the ethical considerations

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Speaker 1: associated with decarbonization timelines, among many other things. Or Bloomberg

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Speaker 1: subscribers who want to know about B and F s

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Speaker 1: research on the energy transition or on corporate sustainability. This

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Speaker 1: can be found on the Bloomberg terminal at b NF

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Speaker 1: GO at BNF dot com or on our mobile app.

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Speaker 1: As a reminder, B and E F does not provide

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Speaker 1: investment or strategy advice, and we have a very complete

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Speaker 1: disclaimer at the end of the show. But now I'm

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Speaker 1: going to speak with Anna. First of all, thank you

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Speaker 1: very much for joining us today on switched On. I

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Speaker 1: want to know a little bit more about you as

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Speaker 1: we get started. I would love to know how you

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Speaker 1: first got involved in the mining industry. Thanks day, and

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Speaker 1: it's it's great to be on this podcast. Thank you.

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Speaker 1: I probably first got interested in mining in my previous career,

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Speaker 1: previous job in the asset managements industry, where I was

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Speaker 1: part of what is today called an e s GT.

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Speaker 1: We were probably one of the first in London to

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Speaker 1: be doing this work, and I just got really fascinated

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Speaker 1: by the mining industry and by the scale of the change,

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Speaker 1: the positive impact that it could have, and also just

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Speaker 1: absolutely the kind of the very essential nature of its

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Speaker 1: products that it was producing. So I spent a bit

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Speaker 1: of time analyzing companies and looking at them from the

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Speaker 1: outside in, and then I thought, well, I'd really love

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Speaker 1: to know how it actually works on the inside, How

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Speaker 1: does it actually work in practice? How do these issues

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Speaker 1: get managed and thought about internally, and so I joined

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Speaker 1: Extrata at the time and then following the merger, came

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Speaker 1: into Glencore. There's sustainability in the name of your title

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Speaker 1: at Glencore, but every company that I talked to who

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Speaker 1: has a sustainability or E s G focused role, each

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Speaker 1: of them is sort of different. I mean, even then

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Speaker 1: I just convoluted the two terms. Sustainability is focused on

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Speaker 1: what a business does, in E s G is more

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Speaker 1: focused on the reporting. So what does head of Sustainable

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Speaker 1: Development mean at Glencore. You're right, it does its lots

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Speaker 1: of different things and lots of different companies. In glen Core,

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Speaker 1: my responsibility is really engaging with our external stakeholders, hearing

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Speaker 1: what does the outside world expect of us, communicating to

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Speaker 1: the outside world what we're doing and how we're doing it,

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Speaker 1: and then translating those expectations of the outside world into

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Speaker 1: our company and thinking about how to translates it into

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Speaker 1: the operational landscape. And clearly one of the biggest expectations

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Speaker 1: that our stakeholders have today, of us, of of anybody,

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Speaker 1: really is the thinking around the transition to a low

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Speaker 1: carbon economy. And so that's been something that's been a

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Speaker 1: very significant part of my role for the last few years,

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Speaker 1: and it looks like it's only going to increase. But

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Speaker 1: that is clearly when we look at our at the

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Speaker 1: expectations that the outside world has of us. In addition

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Speaker 1: to managing our operations responsibly managing our environmental and social footprint,

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Speaker 1: it's all so hugely centered around what are we as

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Speaker 1: a company doing to as part of the global transition

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Speaker 1: to low common economic one. So you noted that one

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Speaker 1: of the things that drew you to the mining industry

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Speaker 1: was the ability to be part of this transition. And

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Speaker 1: when you started or when looking at the company to

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Speaker 1: begin with, let's start talking about the emissions. So where

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Speaker 1: do the emissions come from and where is the work

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Speaker 1: to be done? So there are two primary sources of

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Speaker 1: emissions for a company like glanc Core. The first source

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Speaker 1: is the emissions arising from its own activities, so the

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Speaker 1: so called Scope one and two emissions arising from the

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Speaker 1: use of diesel in our trucks or the use of

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Speaker 1: electricity in our smell test the emissions that we cause

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Speaker 1: directly through our operations. The second source of emissions is

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Speaker 1: from the use of our products um and in the

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Speaker 1: case of blank row with our portfolio of co operations,

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Speaker 1: the majority of those emissions are coming the use of

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Speaker 1: the code that we produce by our customers. Yes, so

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Speaker 1: this this is the Scope three element. So then that

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Speaker 1: leads me next into what our glend cores targets. When

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Speaker 1: we think about these three scopes of emissions for a

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Speaker 1: company like glenk where with the product portfolio that we have,

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Speaker 1: about ten percent of our total emissions footprint comes from

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Speaker 1: our Scope one and two emissions, So the emissions that

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Speaker 1: are specific to our operations and the remainder comes from

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Speaker 1: from the use of our product, and that split is

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Speaker 1: fairly consistent across the large diversified mining sector. So when

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Speaker 1: we thought about our targets, when we thought about, well,

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Speaker 1: what does a meaningful commitment to decorganization look like, we

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Speaker 1: realize that it has to include emissions from our products

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Speaker 1: as well as those from our own operations. So we

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Speaker 1: must think in terms of our operational footprint, but also

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Speaker 1: holistically about our portfolio. So our targets are we have

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Speaker 1: a short term target of reducing our Scope one, two

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Speaker 1: and three emissions by by against nine levels. Then in

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Speaker 1: five we have set ourselves a target of reducing our

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Speaker 1: missions by and then finally we have an ambition of

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Speaker 1: achieving net zero by again across our total footprint. And

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Speaker 1: I keep emphasizing that because when we thought about our missions,

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Speaker 1: we thought, well, focusing purely on our industrial footprints is important,

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Speaker 1: and obviously it's something that we must do, but it's

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Speaker 1: really only ten of the total footprints. So we must

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Speaker 1: think about everything. We must think about our company as

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Speaker 1: a whole. We must think about our portfolio, on our

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Speaker 1: business strategy, and to think about what we can do

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Speaker 1: to reduce the emissions from our product as well as

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Speaker 1: from our own operations. So how were the timelines chosen?

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Speaker 1: Were they reverse engineered off of warming projections from the

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Speaker 1: I B c C or were they really focused more

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Speaker 1: around this is what we think is actually feasible if

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Speaker 1: we're going to pivot these operations and really transition them

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Speaker 1: rather than offload the assets to different companies. We started

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Speaker 1: out looking at the analysis that's been done by the

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Speaker 1: I P c C and really thinking about what does

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Speaker 1: the range need to look like if we are to

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Speaker 1: support the goals of the Paris Agreement. So we started

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Speaker 1: out looking at the midpoint, and we looked at the

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Speaker 1: range that would be necessary for us to achieve, and

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Speaker 1: we then reviewed that against our business portfolio, our business strategy,

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Speaker 1: our footprint to understand what would be a stretching but

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Speaker 1: possible target for our business. And then we work backwards

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Speaker 1: and thought about, well, you know is a key it's

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Speaker 1: obviously the midpoint in the journey. It's it's a critical

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Speaker 1: milestone for us as a company. But working backwards to

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Speaker 1: the more sort of short term horizon, again we thought

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Speaker 1: about the different scenarios that have been set out, whether

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Speaker 1: by the ib c C or the International Energy Agency,

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Speaker 1: and that's how we arvived at our target of by

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Speaker 1: again think you also about you know, our own company

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Speaker 1: and how how can we set ourselves a target that

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Speaker 1: is stretching, that is consistent with the decorganization trajectories that

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Speaker 1: have been set out, but also that is meaningful within

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Speaker 1: our organization. So these targets were well received, I believe

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Speaker 1: by the investment community. And how long ago did you

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Speaker 1: announce them? We first announced our targets in December of

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Speaker 1: last year, and I think the and and thank you

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Speaker 1: for something that they were well received. We're very pleased

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Speaker 1: by the very constructive engagement that we've had the important

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Speaker 1: components of our targets that I think is different from

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Speaker 1: from the industry, and I think was particularly important to

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Speaker 1: our investors was the inclusion of Scope three in our commitments,

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Speaker 1: So moving beyond purely thinking about our industrial footprints and

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Speaker 1: thinking about our portfolio holistically and thinking about the emissions

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Speaker 1: from from our products. So we announced our first suite

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Speaker 1: of targets in December of last year, but we obviously

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Speaker 1: we continue to evaluate the work that's being done. We've

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Speaker 1: seen a lot of additional modeling being done by the

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Speaker 1: i A. For example, they came out with some additional

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Speaker 1: scenario modeling earlier this year, and so we reviewed our

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Speaker 1: targets and increase them. We moved from by in terms

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Speaker 1: of emissions reduction to by five as we continue to

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Speaker 1: analyze those uh, those those scenarios and those trajectories and

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Speaker 1: continue to ensure that our commitments are tracking to those.

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Speaker 1: Let's talk a bit about getting there. How is Glencore's

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Speaker 1: business going to change, restructure, reorganized, refocused to meet these

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Speaker 1: targets If we move through the different scopes of emissions.

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Speaker 1: In terms of our Scope one and two emissions, we

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Speaker 1: are doing a lot of work across the organization to

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Speaker 1: identify opportunities to reduce our emissions from our operations, whether

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Speaker 1: it's looking at lower emission vehicle technologies, whether it's looking

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Speaker 1: at automation, or looking at increasing the amounts of renewable

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Speaker 1: power that we're purchasing to support our our smelters. So

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Speaker 1: there is an industrial decarbonization program that's in place, and

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Speaker 1: that is continuously valuating different opportunities and incorporating them into

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Speaker 1: our project management frameworks. From a portfolio perspective, and again

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Speaker 1: bearing in mind that our total emissions footprints arises from

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Speaker 1: the use of our products by our customers. We have

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Speaker 1: made a commitment to prioritize capital allocation towards the metals

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Speaker 1: that support the transition to a low carbon economy, which

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Speaker 1: means that over time, we've made a commitment to decline

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Speaker 1: our production of coal across our portfolio, but to do

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Speaker 1: so in a responsible manner. So rather than you know,

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Speaker 1: pressing the switch as some have asked us, and shutting

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Speaker 1: down the mind and walking away from them overnight, we

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Speaker 1: recognize that we have a responsibility see to our workforce,

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Speaker 1: and to our communities and to the environments in which

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Speaker 1: we operate to manage the decline of those operations over

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Speaker 1: time and to do so in a responsible, consistent manner.

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Speaker 1: So over over time and in line with the targets

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Speaker 1: that we've set ourselves, we are looking to decline the

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Speaker 1: production of our of our coal operations and that is

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Speaker 1: a key contributor to our overall emissions reduction. So you're

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Speaker 1: declining your coal operations and looking at these measure saying

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Speaker 1: energy transition focused metals, what would which medals are those?

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Speaker 1: What would them be? Glencra has a uniquely diversified portfolio,

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Speaker 1: so we have a significant copper exposure, a copper portfolio,

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Speaker 1: we have a number of nickel producing mines um we're

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Speaker 1: one of the largest producers of cobalts, which is obviously

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Speaker 1: a critical mineral in um in enabling the transition to

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Speaker 1: a low car low carbon economy through the change in

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Speaker 1: transfer station and we also have a number of zinc,

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Speaker 1: chrome and alloys operations, So we have a very diversified

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Speaker 1: portfolio of metals, all of which play a critical role

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Speaker 1: either in continuing to meet the needs of society or

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Speaker 1: in enabling that transition to a low carbon economy by

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Speaker 1: providing the metals and needed for the energy systems and

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Speaker 1: for the transportation industry, and you mentioned your workforce. This

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Speaker 1: has definitely been a hot button topic around the coal

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Speaker 1: industry around the world because coal mining closures are not uncommon,

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Speaker 1: but in several places around the world, not excluding the US,

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Speaker 1: and there's been a lot of talk around what do

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Speaker 1: we do with this workforce? Do you foresee this workforce

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Speaker 1: working in another mining capacity in other parts of the world,

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Speaker 1: because I'm even seeing you know, the goal coal Balt

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Speaker 1: is a good example of there may not necessarily be

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Speaker 1: the same workforce at a coal mine that would then

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Speaker 1: be available to mine cobalt. Look your rights, it's I

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Speaker 1: think it's one the challenges that we face, not just

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Speaker 1: in terms of the workforce, but also in terms of

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Speaker 1: the communities that live around these operations and will obviously

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Speaker 1: be exposed to um challenges if the operations come to

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Speaker 1: come to an end within Blanc or we acquire our

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Speaker 1: operations to manage to maintain closure plans, and the closer

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Speaker 1: they're getting to that date of closure, the more effort

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Speaker 1: there is expected in terms of engaging with the workforce

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Speaker 1: and engaging with the community, and some of the opportunities

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Speaker 1: might be redeployments to other mining mining operations. Where that's possible,

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Speaker 1: it might be retraining um And this is where local

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Speaker 1: governments play a critical role, particularly when we're thinking in

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Speaker 1: the context of this just transition concept. As local regional

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Speaker 1: governments are thinking about transitioning their regions towards a low

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Speaker 1: carbon economy, they may be thinking about building up renewables

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Speaker 1: capacity or develop innovation opportunities, and so we as as

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Speaker 1: as a mining company, will be working very closely with

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Speaker 1: those regional authorities to understand how we can support that

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Speaker 1: regional development plan through our operational closure planning. So having

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Speaker 1: this plan that's clearly defined in terms of when you

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Speaker 1: want to achieve certain targets certainly gives government something that

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Speaker 1: they can then rely on in terms of to your

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Speaker 1: point on the just transition, thinking about what happens to

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Speaker 1: these people on the other side, what are you your

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Speaker 1: views right now on the existing emissions reduction targets for

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Speaker 1: the countries that you're operating and are they realistic or

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Speaker 1: some of them too ambitious, And how does this impact

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Speaker 1: the way that that you look at achieving these targets.

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Speaker 1: I think that that we have to look at these

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Speaker 1: targets as as a point in time you know, if

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Speaker 1: we think about how much has changed in this space,

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Speaker 1: even just in the lost twelve to eighteen months, you know,

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Speaker 1: we have all the major economies of the world, including

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Speaker 1: China and the US, committing or recommitting to the Paris Agreement,

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Speaker 1: committing to achieving net zero by fifty or twenties sixty.

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Speaker 1: We've seen some very ambitious targets being put forward by

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Speaker 1: by the European Union and by the United Kingdom. So

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Speaker 1: we've seen so much happened so quickly in this space

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Speaker 1: that it seems clear that the forward momentum is is

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Speaker 1: very strong if we look at the individual targets, the

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Speaker 1: the nationally determined contributions that have been set forward by

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Speaker 1: by various countries around the world. You know, we've seen

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Speaker 1: some commentary from the likes of the ib c C

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Speaker 1: that they're not sufficiently ambitious or rapid to achieve the

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Speaker 1: level of change that is needed. But I think what

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Speaker 1: we must also take into account is the dynamics of

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Speaker 1: change and the momentum, and the fact that you know,

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Speaker 1: to alter eighteen months ago, this home minded focus on

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Speaker 1: achieving net zero was not even uh on on on

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Speaker 1: our radar. When you think about the pace of change.

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Speaker 1: I'm optimistic that we will see continued momentum carry forward

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Speaker 1: and and and increase the pace of ambition. In some

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Speaker 1: of these contributions, things do seem like they're happening slowly

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Speaker 1: and then suddenly quite fast. So see if we can

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Speaker 1: continue to accelerate that momentum. When we think about communities

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Speaker 1: that are dependent on coal for energy right now various kinds,

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Speaker 1: there's energy access, and then there's the fact that oftentimes

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Speaker 1: it's the same communities that have will be experiencing outsized

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Speaker 1: impacts of climate change. First, how does a company like yours,

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Speaker 1: when you're focusing on these scope three emissions kind of

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Speaker 1: way up the two regarding energy access and then climate impacts,

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Speaker 1: given that you know there's the right now and then

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Speaker 1: there's the not so far away future. And that is

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Speaker 1: exactly why we looked at the emissions arising from our

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Speaker 1: products as well as those from from our operations. When

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Speaker 1: we think about the transition to low carbon, when we

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Speaker 1: think about the transition to renewable energy, we are cognizant

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Speaker 1: that we cannot just flip the switch. Forgive the pun.

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Speaker 1: Can't overnight switch to renewables. You are unswitched on after all,

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Speaker 1: so there's switching unintentional, but we you know, under any

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Speaker 1: scenario that's been set out by the the I A

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Speaker 1: and by the others, cole continues to play a role.

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Speaker 1: It diminishes, It diminishes very significantly under certain scenarios, but

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Speaker 1: it is there. And as we are switching to the renewables,

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Speaker 1: as we're increasing the contents of renewables and our energy systems,

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Speaker 1: as we're improving the efficiency of energy storage and energy transmission,

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Speaker 1: we must continue to maintain that access to energy, particularly

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Speaker 1: in the poorer countries that don't necessarily have the capacity

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Speaker 1: or the support today to get that that transition to renewables.

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Speaker 1: So the coal continues to play a role. It will

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Speaker 1: diminish over time, but today it is part of the

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Speaker 1: energy mix. So when we thought about our commitments, we

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Speaker 1: thought that that was part of our thinking. But we

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Speaker 1: as as you say, we realize that there's the needs

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Speaker 1: of today, but there's also the needs of tomorrow, and

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Speaker 1: so we committed to reduce the production over time so

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Speaker 1: that as we are transitioning, we can the coal can

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Speaker 1: decline and the proportion of renewables is increasing. Our targets

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Speaker 1: have been set, so we are we're committed to that trajectory.

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Speaker 1: We as as as we said, we do anticipate that

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Speaker 1: coal will remain some part of the conversation, but our

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Speaker 1: reductions are are put in place in line with the

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Speaker 1: scenarios that have been set by the by the I

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Speaker 1: A and by the I P c C. Well, so

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Speaker 1: you're saying that coal will still remain part of the

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Speaker 1: portfolio in the future. And if we're thinking about the

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Speaker 1: mining industry and this net zero ambition that you have,

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Speaker 1: other than buying offsets, which I don't believe Glencore does,

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Speaker 1: how does or maybe what are the technologies that may

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Speaker 1: get Glencore to net zero. When we looked at our

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Speaker 1: when we look at our trajectory of our of our targets,

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Speaker 1: we made the decision not to use offsets as part

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Speaker 1: of our day organization trajectory. It may be something that

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Speaker 1: we look at for commercial purposes, but in terms of

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Speaker 1: reducing our emissions footprint, we believe that we will be

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Speaker 1: able to achieve our target of reduction by without without

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Speaker 1: using offsets. And one of the reasons for that is, well,

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Speaker 1: there's a couple of reasons for that. One based on

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Speaker 1: our assessment of the Paris rule book. The rules around

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Speaker 1: offsets remain very unclear, and we've seen some criticism come

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Speaker 1: up of less scrupulous scrupulous treatments of offsets globally, um,

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Speaker 1: you know, instances of double counting, or instances of just

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Speaker 1: a lot of confusion around how offsets are treated, accounted

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Speaker 1: for and managed. So we were concerned by this level

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Speaker 1: of uncertainty and we didn't want to rely on something

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Speaker 1: where there's still so much work that needs to be

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Speaker 1: done as a pillar of our dec organization. We're also

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Speaker 1: very conscious that the expectation is that offsets can be

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Speaker 1: used for those hard to abate emissions. So we put

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Speaker 1: on ourselves the expectation to do as much as we

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Speaker 1: can on our own, on our own efforts, UM, and

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Speaker 1: then look at what is left and consider whether perhaps

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Speaker 1: in the future, with greater regulatory certainty, we may look

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Speaker 1: at usets as a possible option. What are some of

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Speaker 1: the technologies that we can that we're looking at. You know,

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Speaker 1: there is a lot of work that we are we

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Speaker 1: can do, and we think it's very interesting in the

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Speaker 1: renewable space, in increasing the proportional renewable energy in our

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Speaker 1: in our purchases of energy globally, for our operations. There

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Speaker 1: are a number of technologies around which U seeing the

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Speaker 1: emissions from vehicles, sort of reducing the diesel the amount

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Speaker 1: of diesel that we use in our operations to either

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Speaker 1: reduce emissions or even zero emissions. I think that technology

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Speaker 1: is still a little bit further off in the future,

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Speaker 1: but certainly there's a lot of work being done towards it,

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Speaker 1: greater deployment of battery vehicles. I think there's a lot

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Speaker 1: of different opportunities that that we're looking at, and I

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Speaker 1: think that's an important point. You know this, this challenge

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Speaker 1: is so enormous and so complex, it requires all the

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Speaker 1: different solutions. There's no single solution, there's no single technology,

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Speaker 1: there's no single kind of magic pill that just solves

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Speaker 1: the whole problems. So for a company as complex as ours,

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Speaker 1: is diversified as ours, we're looking at multiple strategies, multiple

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Speaker 1: opportunities that will all come together to help us drive

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Speaker 1: that decorganization forward. Now for a very short break, stay

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Speaker 1: with us, let's pivot a little bit, and let's talk

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Speaker 1: about your publicly listed company. You know this, the reality

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Speaker 1: of the investment community and their influence on the way

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Speaker 1: companies behave is ever present, as investors are increasingly focused

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Speaker 1: on E s G metrics and we've seen this by

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Speaker 1: several funds just closing over the just the last month alone,

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Speaker 1: very good size. How do you think the investment community

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Speaker 1: should look at companies that I would consider really at

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Speaker 1: the heart of the energy transition, those that have fairly

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Speaker 1: large emissions profiles and have a long space to go,

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Speaker 1: but then you know, a lot of opportunity, a lot

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Speaker 1: of opportunity to make a big difference. How do you

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Speaker 1: think that they should look at these companies in terms

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Speaker 1: of time horizon? How should they look at these companies

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Speaker 1: in terms of how quickly these companies are transitioning and

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Speaker 1: the work that needs to be done. I think what's

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Speaker 1: important in analyzing companies commitments to decorbonization is understanding to

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Speaker 1: which to the the center which these commitments are holistic.

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Speaker 1: So again I talked about this before. I'll give you

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Speaker 1: an example. Our industrial emissions footprint is ten percent of

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Speaker 1: our total footprint, So if we were to focus only

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Speaker 1: on that portion of our footprint, we would be dismissing,

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Speaker 1: would be ignoring the majority of the emissions that our

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Speaker 1: company contributes to. So looking holistically at the emissions footprints,

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Speaker 1: both from an operational perspective, but also from a portfolio perspective,

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Speaker 1: I think is critical to assessing the company's commitment. I

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Speaker 1: think also the way that these commitments are going to

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Speaker 1: be achieved. You know, we get us sometimes well, why

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Speaker 1: don't you just press the button? Why don't you just

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Speaker 1: close these minds? Why don't you just stop operations that

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Speaker 1: contribute significantly to to TO to the car global carbon footprints?

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Speaker 1: And I understand where people are coming from with that question,

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Speaker 1: But the challenge that we have is, you know, by

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Speaker 1: pressing that button, we're putting thousands or tens of thousands

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Speaker 1: of people out of jobs. We're impacting their families, were

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Speaker 1: impacting those communities. By walking away from those operations, were

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Speaker 1: potentially leaving them for somebody else to operate them, perhaps

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Speaker 1: in a less responsible way. So the manner in which

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Speaker 1: we achieve the decorganization, the ensuring that the decorganization is

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Speaker 1: managed responsibly, that the transition is supported and enabled, and

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Speaker 1: thoughts about also from the perspective of those people who

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Speaker 1: are vulnerable to it. I think that's it's an important

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Speaker 1: consideration in again assessing the commitment to dec organization. And

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Speaker 1: I suppose the final consideration, the final vector of analysis

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Speaker 1: is understanding the extent to which a company's business model,

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Speaker 1: a company's portfolio is positioned to thrive in the transition.

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Speaker 1: Is a company's portfolio is sufficiently diversified. Is an exposed

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Speaker 1: to the does have the right commodity mixed in it

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Speaker 1: to not only enable the transition but also to to

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Speaker 1: to benefit from it. Is the company's portfolio sufficiently future

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Speaker 1: proof for this world that we are working towards. So

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Speaker 1: I think those are the three axes of of consideration.

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Speaker 1: Is there is the decorganization holistic, is the commitment's whole

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Speaker 1: of business? Is the thoughts about in a responsible manner?

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Speaker 1: And is the company itself well positioned to uh for

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Speaker 1: for the future of the decoganization process? And how of

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Speaker 1: your interactions with Climate Action one hundred impacted how you

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Speaker 1: guys approached these issues. We've been speaking to Climate actually

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Speaker 1: one hundreds for five years now. We first started in

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Speaker 1: UM back in two thousands sixteen, and throughout I think

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Speaker 1: we've been very fortunate. We've had a very positive, very

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Speaker 1: positive dialogue. It's been very constructive, it's been respectful, it's

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Speaker 1: been two way. I think we have certainly benefited from

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Speaker 1: our counterparties and Climate Action one hundred plus really providing

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Speaker 1: very helpful feedback, providing helpful context, explaining the expectations of

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Speaker 1: the investor community, but also acting as a sounding board.

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Speaker 1: I think we've built up a relationship of trust where

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Speaker 1: we're able to work with them to discuss different ideas,

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Speaker 1: discussed different strategies, and to assess with them what uh

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Speaker 1: you know, how these strategies are positions against our commitments

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Speaker 1: and against those expectations. So it's been a really helpful dialogue.

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Speaker 1: I think it's really helps us evolved, evolve and grow

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Speaker 1: um and hopefully our our counterparties within the initiative have

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Speaker 1: also found it useful as we're building up that that

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Speaker 1: knowledge and working together in working towards the decorganization. Well,

435
00:26:44,119 --> 00:26:46,280
Speaker 1: let's go back to the business and the way it

436
00:26:46,280 --> 00:26:49,760
Speaker 1: works a little bit, and this one area where people

437
00:26:49,800 --> 00:26:52,160
Speaker 1: have been focusing a lot of attention lately has been

438
00:26:52,200 --> 00:26:55,760
Speaker 1: the potential of the circular economy and having nothing ENDPTH

439
00:26:55,800 --> 00:26:58,200
Speaker 1: in the was stream and in particular in the metals

440
00:26:58,200 --> 00:27:00,520
Speaker 1: and mining space in regard to battery amount. Also's been

441
00:27:00,520 --> 00:27:04,040
Speaker 1: a focus on how do we tackle this and the

442
00:27:04,160 --> 00:27:07,159
Speaker 1: question I have is you know, do you think that

443
00:27:07,280 --> 00:27:10,639
Speaker 1: we will reach a point where medals who many of

444
00:27:10,640 --> 00:27:14,800
Speaker 1: which can be recycled many times over, where we could

445
00:27:14,840 --> 00:27:20,240
Speaker 1: reach a not entirely but close to circular economy And

446
00:27:20,400 --> 00:27:22,680
Speaker 1: is that space the glin core is looking at. So

447
00:27:22,800 --> 00:27:26,199
Speaker 1: Blanco is one of the largest recyclers, um we have

448
00:27:26,520 --> 00:27:31,200
Speaker 1: recycling operations all over the world, and so yes, absolutely

449
00:27:31,320 --> 00:27:34,800
Speaker 1: we consider ourselves to be part of the of the

450
00:27:34,840 --> 00:27:40,920
Speaker 1: circular economy. Is that the solution unfortunately probably not under

451
00:27:41,000 --> 00:27:44,320
Speaker 1: any projection that we see, any scenario, any modeling that's

452
00:27:44,320 --> 00:27:47,840
Speaker 1: been done again, whether by the International Energy Agency or

453
00:27:47,920 --> 00:27:51,080
Speaker 1: even by the i p c C. We need new material.

454
00:27:51,200 --> 00:27:53,679
Speaker 1: We need new material to meet meet the needs of

455
00:27:53,680 --> 00:27:56,880
Speaker 1: a growing population. We need new material if we are

456
00:27:57,000 --> 00:27:59,760
Speaker 1: to make the switch in terms of the energy and

457
00:27:59,760 --> 00:28:05,400
Speaker 1: trance quotation sectors. We certainly need more recycling. We certainly

458
00:28:05,400 --> 00:28:07,760
Speaker 1: need to see improvements in recovery rates. We need to

459
00:28:07,760 --> 00:28:11,240
Speaker 1: see more physically more recycling happened. We need to see

460
00:28:11,480 --> 00:28:16,639
Speaker 1: the regulatory framework strengthened to support a greater uptake of recycling.

461
00:28:17,080 --> 00:28:19,280
Speaker 1: But that is not going to be the only answer.

462
00:28:19,400 --> 00:28:24,720
Speaker 1: We're not going to be positioned to meet all the

463
00:28:24,840 --> 00:28:29,879
Speaker 1: needs through through recycling. Clearly, another consideration in this is lifestyle,

464
00:28:30,040 --> 00:28:32,240
Speaker 1: and I think there is a lot that needs to

465
00:28:32,280 --> 00:28:35,600
Speaker 1: happen in terms of how we think about consumption, how

466
00:28:35,640 --> 00:28:40,640
Speaker 1: we think about evolving needs of society. And while all

467
00:28:40,680 --> 00:28:43,240
Speaker 1: of that means that that there should and probably will

468
00:28:43,320 --> 00:28:47,000
Speaker 1: be greater uptake of recycling, there's still going to be

469
00:28:47,120 --> 00:28:49,280
Speaker 1: more people in the world. They're going to need more

470
00:28:50,080 --> 00:28:54,479
Speaker 1: more materials, more vehicles, more energy, and all of that

471
00:28:54,640 --> 00:28:57,920
Speaker 1: is going to require new materials, new metals. Let's talk

472
00:28:57,960 --> 00:29:00,480
Speaker 1: about some of the technologies that are urging in the

473
00:29:00,480 --> 00:29:03,200
Speaker 1: mining space, such as black chain. What are the main

474
00:29:03,280 --> 00:29:07,000
Speaker 1: sources of innovation that you're seeing, either in circular or

475
00:29:07,040 --> 00:29:09,640
Speaker 1: the non circular side of things. I think from an

476
00:29:09,640 --> 00:29:15,760
Speaker 1: industrial perspective, we're seeing a movement towards reduced the mission vehicles,

477
00:29:15,920 --> 00:29:20,320
Speaker 1: zero mission vehicles actually vehicles and all of that. There's

478
00:29:20,320 --> 00:29:23,320
Speaker 1: a lot of work being done to help the mining

479
00:29:23,360 --> 00:29:28,320
Speaker 1: industry reduce reduced the emissions arising from from the vehicles

480
00:29:28,360 --> 00:29:31,200
Speaker 1: that we used to to to whether it's to dig

481
00:29:31,240 --> 00:29:34,120
Speaker 1: the minds or to move the material or to transport

482
00:29:34,320 --> 00:29:37,920
Speaker 1: our products from a From a supply change chain perspective,

483
00:29:37,920 --> 00:29:41,320
Speaker 1: I think the blockchain is really interesting and we have

484
00:29:41,360 --> 00:29:44,320
Speaker 1: a number of projects that we're involved with where we're

485
00:29:44,360 --> 00:29:47,960
Speaker 1: looking at how blockchain can be used to support greater

486
00:29:48,320 --> 00:29:52,120
Speaker 1: traceability and transparency. I think one thing that we're very

487
00:29:52,160 --> 00:29:56,320
Speaker 1: conscious of is decomanization can't come at any cost. It

488
00:29:56,360 --> 00:29:58,960
Speaker 1: doesn't come at the cost of cutting corners. We must

489
00:29:59,000 --> 00:30:02,000
Speaker 1: still operate with responsibly. We must produce these metals that

490
00:30:02,000 --> 00:30:05,240
Speaker 1: are needed for a low common economy in a responsible manner.

491
00:30:05,600 --> 00:30:09,040
Speaker 1: And the way that we demonstrate that can can be

492
00:30:09,080 --> 00:30:14,840
Speaker 1: done through blockchain um as a vehicle for greater reliability

493
00:30:14,840 --> 00:30:19,040
Speaker 1: and which more more traceable data on how on how

494
00:30:19,080 --> 00:30:22,200
Speaker 1: these materials are produced. So that's something that's that's really

495
00:30:22,200 --> 00:30:26,240
Speaker 1: interesting and I think it supports this focus on responsible

496
00:30:26,240 --> 00:30:30,760
Speaker 1: production of metals, but it also speaks to and and

497
00:30:31,000 --> 00:30:35,479
Speaker 1: enables greater collaboration across the value chain. Nobody can go

498
00:30:35,600 --> 00:30:40,160
Speaker 1: it can do this alone. Nobody can achieve perfect decorganization alone.

499
00:30:40,360 --> 00:30:43,600
Speaker 1: We need support. We need partnerships, whether it's with our

500
00:30:43,600 --> 00:30:47,000
Speaker 1: suppliers or it's with our customers, to think about how

501
00:30:47,080 --> 00:30:51,920
Speaker 1: we can support support all of these different efforts, whether

502
00:30:51,920 --> 00:30:55,600
Speaker 1: it's through our long term agreements with our customers, or

503
00:30:55,640 --> 00:30:58,120
Speaker 1: whether it's through blockchain where we're all of us able

504
00:30:58,160 --> 00:31:02,800
Speaker 1: to work together to to enable the greater transparency around

505
00:31:02,800 --> 00:31:05,600
Speaker 1: our products. When you talk about blockchain and things that

506
00:31:05,640 --> 00:31:09,280
Speaker 1: it's trying to address making sure that these metals are

507
00:31:09,320 --> 00:31:12,520
Speaker 1: being sourced in a responsible way, what does that mean?

508
00:31:12,800 --> 00:31:15,960
Speaker 1: What is can you expand upon? I guess what the

509
00:31:16,000 --> 00:31:19,400
Speaker 1: irresponsible things are that you're looking for with blockchain? I

510
00:31:19,400 --> 00:31:23,480
Speaker 1: suppose there it could be something as simple as including

511
00:31:23,600 --> 00:31:28,400
Speaker 1: in the blockchain the greenhouse gas footprint of a particular product,

512
00:31:28,640 --> 00:31:31,440
Speaker 1: and so you know, what are the emissions associated with

513
00:31:31,640 --> 00:31:36,720
Speaker 1: this ton of of cobalt or or whatever it might be.

514
00:31:37,280 --> 00:31:40,720
Speaker 1: It might be something a bit more complicated, alike, how

515
00:31:41,080 --> 00:31:45,320
Speaker 1: are how is the company producing this metal managing its

516
00:31:45,320 --> 00:31:48,840
Speaker 1: commitment to respect human rights? Um, it might be great

517
00:31:48,840 --> 00:31:52,120
Speaker 1: secularity around how the steps that were taken to ensure

518
00:31:52,120 --> 00:31:54,440
Speaker 1: that there was no child labor involved in the production

519
00:31:54,480 --> 00:31:58,280
Speaker 1: of this metal. So it can be any and as

520
00:31:58,320 --> 00:31:59,880
Speaker 1: I said, some of the some of the data is

521
00:32:00,040 --> 00:32:02,200
Speaker 1: right straightforward. It might be a simple number, you know,

522
00:32:02,320 --> 00:32:05,280
Speaker 1: the the amount of emissions associated with the product, or

523
00:32:05,320 --> 00:32:08,440
Speaker 1: it might be something more sophisticated. But what it enables

524
00:32:08,720 --> 00:32:12,200
Speaker 1: is for the for the customer or the end user

525
00:32:12,320 --> 00:32:17,360
Speaker 1: to have confidence that the product is produced responsibly and

526
00:32:17,440 --> 00:32:21,000
Speaker 1: that it helped it plays a part in that greater goal.

527
00:32:21,320 --> 00:32:25,080
Speaker 1: So switching tracks again, Glencore has increased their stake in

528
00:32:25,080 --> 00:32:29,160
Speaker 1: a business called British Vault, which is a battery factory,

529
00:32:29,240 --> 00:32:31,640
Speaker 1: and I want to know a little bit more about

530
00:32:31,680 --> 00:32:34,440
Speaker 1: British Vault and some of the opportunity that is seen

531
00:32:34,440 --> 00:32:39,000
Speaker 1: there and additionally, if there are other opportunities that Glencore

532
00:32:39,200 --> 00:32:41,959
Speaker 1: is looking at, not directly as a part of their business,

533
00:32:41,960 --> 00:32:44,400
Speaker 1: but more as a part of their portfolio. Well, I

534
00:32:44,400 --> 00:32:47,880
Speaker 1: think British Cold is a really exciting example of how

535
00:32:48,080 --> 00:32:52,280
Speaker 1: we leverage our marketing capability in addition to our industrial

536
00:32:52,640 --> 00:32:56,640
Speaker 1: uh the industrial side of our business. So through our

537
00:32:56,840 --> 00:33:00,000
Speaker 1: marketing arm we're able to work with our customers um

538
00:33:00,000 --> 00:33:03,320
Speaker 1: whether it's on securing long term agreements that enable them

539
00:33:03,360 --> 00:33:08,320
Speaker 1: to meet their objectives of for example, producing battery battery

540
00:33:08,400 --> 00:33:11,200
Speaker 1: vehicles which they're able to commit to because they have

541
00:33:11,280 --> 00:33:13,720
Speaker 1: a long term agreement with us for a supply of

542
00:33:13,800 --> 00:33:17,160
Speaker 1: cobalt that they need for those for those vehicles, or

543
00:33:17,240 --> 00:33:19,280
Speaker 1: as in the case of British Vault, and also earlier

544
00:33:19,320 --> 00:33:23,200
Speaker 1: this year, a Norwegian company called Fair an investment agreement

545
00:33:23,280 --> 00:33:27,040
Speaker 1: where we are actually participating in the long term success

546
00:33:27,040 --> 00:33:33,040
Speaker 1: of that of those companies by supplying them with low carbon, cobalt, nickel,

547
00:33:33,160 --> 00:33:35,880
Speaker 1: the metals that they need. So it's a partnership that

548
00:33:36,000 --> 00:33:41,120
Speaker 1: leverages our strengths as a producer, but also builds on

549
00:33:41,120 --> 00:33:44,160
Speaker 1: the relationship that we have developed through our marketing arm

550
00:33:44,280 --> 00:33:49,480
Speaker 1: and feeds into that portfolio strategy of positioning the company

551
00:33:49,600 --> 00:33:54,920
Speaker 1: in that decarbonization future. One. Now, let's talk about one

552
00:33:54,960 --> 00:33:59,040
Speaker 1: of the may be more effective in Europe ways of

553
00:33:59,080 --> 00:34:01,720
Speaker 1: reducing a mesh. I'm thinking of the e v T S.

554
00:34:02,120 --> 00:34:05,560
Speaker 1: Let's talk about carbon trading versus a carbon tax in

555
00:34:05,800 --> 00:34:09,520
Speaker 1: which you think might be the better or more effective

556
00:34:09,520 --> 00:34:13,719
Speaker 1: mechanism for decarbonization. To be honest, I think either it

557
00:34:13,800 --> 00:34:17,399
Speaker 1: will work as long as the mechanisms are designed effectively.

558
00:34:17,880 --> 00:34:21,120
Speaker 1: I think both of them have their advantages. A carbon

559
00:34:21,200 --> 00:34:26,000
Speaker 1: tax regime is predictable. It supports that long term investment

560
00:34:26,080 --> 00:34:29,000
Speaker 1: that is so important for companies such as the in

561
00:34:29,440 --> 00:34:33,680
Speaker 1: the mining industry. Carbon trading regimes such as the the

562
00:34:33,680 --> 00:34:37,400
Speaker 1: the Emissions Trading Scheme and in Europe drives that greatest

563
00:34:37,440 --> 00:34:40,600
Speaker 1: certainty in terms of ensuring that the emissions targets will

564
00:34:40,640 --> 00:34:44,200
Speaker 1: be met. So they both have very strong advantages, but

565
00:34:44,280 --> 00:34:47,920
Speaker 1: we've also seen both of them be less successful where

566
00:34:48,000 --> 00:34:54,440
Speaker 1: the design enabled too much volatility, outsize allowances for for

567
00:34:54,560 --> 00:34:58,840
Speaker 1: various sectors, or just poor enforcement. So I think both

568
00:34:58,920 --> 00:35:04,360
Speaker 1: have both can contribute, Both can enable decarbonization. The question

569
00:35:04,480 --> 00:35:09,520
Speaker 1: is does the design support rigor in um in driving

570
00:35:09,560 --> 00:35:13,799
Speaker 1: those those commitments or does it allow for too much

571
00:35:14,320 --> 00:35:18,160
Speaker 1: flexibility that so so that that is less effective. Well,

572
00:35:18,160 --> 00:35:22,680
Speaker 1: and this really comes down to policy makers and what

573
00:35:22,800 --> 00:35:26,160
Speaker 1: do you think they should be doing to accelerate the

574
00:35:26,280 --> 00:35:30,120
Speaker 1: energy transition? And maybe maybe that's carbon tax or carbon trading, um,

575
00:35:30,120 --> 00:35:32,399
Speaker 1: but what sorts of things should they be looking at

576
00:35:32,480 --> 00:35:34,919
Speaker 1: more closely to try and get there. I think it's

577
00:35:35,440 --> 00:35:39,759
Speaker 1: one of the big issues that we see is inconsistency

578
00:35:40,080 --> 00:35:47,080
Speaker 1: its countries, regions operating in silos. So while I think

579
00:35:47,080 --> 00:35:50,120
Speaker 1: a global carbon carbon price or global carbon market is

580
00:35:50,160 --> 00:35:54,840
Speaker 1: perhaps not realistic, a more harmonized approach would would allow

581
00:35:55,040 --> 00:35:59,920
Speaker 1: companies to work more holistically across their their full value chains,

582
00:36:00,560 --> 00:36:03,759
Speaker 1: So I think work in that direction would be beneficial.

583
00:36:04,280 --> 00:36:07,000
Speaker 1: I think one area that we're all hoping to see

584
00:36:07,040 --> 00:36:09,240
Speaker 1: some clarity and perhaps coming out of the COP twenty

585
00:36:09,320 --> 00:36:13,120
Speaker 1: six meetings later this year is a resolution of the

586
00:36:13,160 --> 00:36:18,160
Speaker 1: treatments of offsets, the treatments of carbon accounting, the mapping

587
00:36:18,400 --> 00:36:21,280
Speaker 1: of the different efforts around the world and thinking about

588
00:36:21,320 --> 00:36:26,240
Speaker 1: them again from that kind of holistic, consistent perspective. Well,

589
00:36:26,320 --> 00:36:30,000
Speaker 1: we've been across a number of topics and the time

590
00:36:30,040 --> 00:36:32,439
Speaker 1: that we've had, and I've got one for you that's

591
00:36:32,560 --> 00:36:36,200
Speaker 1: kind of outside of center, which is in not in

592
00:36:36,239 --> 00:36:41,120
Speaker 1: the mining space. What energy transition technologies do you feel

593
00:36:41,640 --> 00:36:45,520
Speaker 1: are most overhyped or perhaps most under hyped that may

594
00:36:45,560 --> 00:36:49,520
Speaker 1: have potential that we haven't yet realized. Let me preface

595
00:36:49,560 --> 00:36:52,280
Speaker 1: by saying I think all technologies have a role to play.

596
00:36:52,560 --> 00:36:56,200
Speaker 1: Dec organization is enormously complex. It's an unprecedented level of

597
00:36:56,360 --> 00:37:00,719
Speaker 1: challenge that we face as a society. So to say

598
00:37:00,760 --> 00:37:04,879
Speaker 1: any one technology does not work is probably incorrect. We

599
00:37:04,960 --> 00:37:07,880
Speaker 1: need every everybody to play their part, every piece of

600
00:37:07,880 --> 00:37:10,319
Speaker 1: the puzzle to come together. So I don't think there's

601
00:37:10,320 --> 00:37:12,200
Speaker 1: any technology that we would say, oh, you know, it

602
00:37:12,280 --> 00:37:14,839
Speaker 1: just doesn't have a role at all. They all do.

603
00:37:15,000 --> 00:37:18,040
Speaker 1: I think the question is the the amounts of attention

604
00:37:18,080 --> 00:37:23,120
Speaker 1: and resources that is poured into into particular areas. And

605
00:37:23,160 --> 00:37:25,680
Speaker 1: I think one area that we've been perhaps a little

606
00:37:25,680 --> 00:37:30,200
Speaker 1: bit more skeptical of today is sort of the is

607
00:37:30,239 --> 00:37:33,440
Speaker 1: that the technology around direct air capture, this concept of

608
00:37:33,480 --> 00:37:37,360
Speaker 1: taking carbon dioxide straight out of the atmosphere. All the

609
00:37:37,400 --> 00:37:41,080
Speaker 1: technology has been around for a long time, it's been proven,

610
00:37:41,760 --> 00:37:44,480
Speaker 1: I suppose, you know, there's been so much resource, so

611
00:37:44,560 --> 00:37:47,360
Speaker 1: much investment put into it to date, and yet it

612
00:37:47,440 --> 00:37:51,840
Speaker 1: remains relatively a relatively small contributor to the overall emissions,

613
00:37:51,880 --> 00:37:55,520
Speaker 1: and in the scenarios that we've seen, it's total contribution

614
00:37:55,719 --> 00:37:58,040
Speaker 1: in the near future, in the next sort of ten

615
00:37:58,120 --> 00:38:01,480
Speaker 1: years and so remains quite small. So while it absolutely

616
00:38:01,520 --> 00:38:04,319
Speaker 1: has a role to play in that total spectrum of

617
00:38:04,440 --> 00:38:07,440
Speaker 1: things we must be doing, I suppose the question for

618
00:38:07,520 --> 00:38:10,160
Speaker 1: me is how much effort do we put into that

619
00:38:10,200 --> 00:38:14,000
Speaker 1: technology versus some of the other ones, where perhaps the

620
00:38:14,040 --> 00:38:17,560
Speaker 1: scalability and the rates of adoption and the scale of

621
00:38:17,680 --> 00:38:22,560
Speaker 1: change could be um could potentially be great. So excellent, Well,

622
00:38:22,760 --> 00:38:24,880
Speaker 1: I just want to say thank you very much for

623
00:38:24,960 --> 00:38:27,120
Speaker 1: coming on today and telling us a bit more about

624
00:38:27,160 --> 00:38:29,640
Speaker 1: how Glencore is going to tackle not just Scope one

625
00:38:29,680 --> 00:38:32,719
Speaker 1: and two, but Scope three emissions. We look forward to

626
00:38:32,800 --> 00:38:34,880
Speaker 1: checking back with you over the years and seeing how

627
00:38:34,920 --> 00:38:37,640
Speaker 1: you're getting on. As I know, the targets are new,

628
00:38:37,960 --> 00:38:41,760
Speaker 1: but the near term goals are just around the corner,

629
00:38:41,800 --> 00:38:44,320
Speaker 1: and so I know that you will be extremely busy.

630
00:38:44,680 --> 00:38:55,720
Speaker 1: Thank you, it's been great talking to you. Today's episode

631
00:38:55,719 --> 00:38:57,960
Speaker 1: of Switched On was edited by Rex Corner the gray

632
00:38:58,000 --> 00:39:01,680
Speaker 1: Stoke Media bloom Berginias was provided by Bloomberg Finance LP

633
00:39:01,760 --> 00:39:04,680
Speaker 1: and its affiliates. This recording does not constitute, nor should

634
00:39:04,719 --> 00:39:08,120
Speaker 1: it be construed as investment advice, investment recommendations, or a

635
00:39:08,120 --> 00:39:11,319
Speaker 1: recommendation as to an investment or other strategy. Bloomberg an

636
00:39:11,360 --> 00:39:13,880
Speaker 1: e F should not be considered as information sufficient upon

637
00:39:13,960 --> 00:39:17,200
Speaker 1: which to base an investment decision. Neither Bloomberg Finance LP

638
00:39:17,480 --> 00:39:20,640
Speaker 1: nor any of its affiliates makes any representation or warranty

639
00:39:20,719 --> 00:39:23,719
Speaker 1: as the accuracy or completeness of the information contained in

640
00:39:23,760 --> 00:39:26,600
Speaker 1: this recording, and any liability as a result of this recording.

641
00:39:26,640 --> 00:39:27,200
Speaker 1: It expressly