Speaker 1: They sustain a Perkins and you're listening to Switched on
Speaker 1: the BIENNF podcast. If you listen regularly, you'll know that
Speaker 1: we typically interview a bienny F analyst about something they've
Speaker 1: been researching. However, on occasion we mix in external guests
Speaker 1: to provide their perspective from the coal face of the
Speaker 1: energy transition. And yes, that was an intentional pun because
Speaker 1: today I speak with Anna Krutikov, head of Sustainable Development
Speaker 1: at Glencore. Glencore is a multinational commodity trading and mining
Speaker 1: Fortune five company and they have a net zero twenty
Speaker 1: fifty ambition across their mining operations for scope one, two
Speaker 1: and three, meaning not only the mining but the use
Speaker 1: of their products like coal. Anna explains Glencore's targets, the
Speaker 1: opportunities a mining company has in the energy transition around
Speaker 1: things like battery metals, and some of the ethical considerations
Speaker 1: associated with decarbonization timelines, among many other things. Or Bloomberg
Speaker 1: subscribers who want to know about B and F s
Speaker 1: research on the energy transition or on corporate sustainability. This
Speaker 1: can be found on the Bloomberg terminal at b NF
Speaker 1: GO at BNF dot com or on our mobile app.
Speaker 1: As a reminder, B and E F does not provide
Speaker 1: investment or strategy advice, and we have a very complete
Speaker 1: disclaimer at the end of the show. But now I'm
Speaker 1: going to speak with Anna. First of all, thank you
Speaker 1: very much for joining us today on switched On. I
Speaker 1: want to know a little bit more about you as
Speaker 1: we get started. I would love to know how you
Speaker 1: first got involved in the mining industry. Thanks day, and
Speaker 1: it's it's great to be on this podcast. Thank you.
Speaker 1: I probably first got interested in mining in my previous career,
Speaker 1: previous job in the asset managements industry, where I was
Speaker 1: part of what is today called an e s GT.
Speaker 1: We were probably one of the first in London to
Speaker 1: be doing this work, and I just got really fascinated
Speaker 1: by the mining industry and by the scale of the change,
Speaker 1: the positive impact that it could have, and also just
Speaker 1: absolutely the kind of the very essential nature of its
Speaker 1: products that it was producing. So I spent a bit
Speaker 1: of time analyzing companies and looking at them from the
Speaker 1: outside in, and then I thought, well, I'd really love
Speaker 1: to know how it actually works on the inside, How
Speaker 1: does it actually work in practice? How do these issues
Speaker 1: get managed and thought about internally, and so I joined
Speaker 1: Extrata at the time and then following the merger, came
Speaker 1: into Glencore. There's sustainability in the name of your title
Speaker 1: at Glencore, but every company that I talked to who
Speaker 1: has a sustainability or E s G focused role, each
Speaker 1: of them is sort of different. I mean, even then
Speaker 1: I just convoluted the two terms. Sustainability is focused on
Speaker 1: what a business does, in E s G is more
Speaker 1: focused on the reporting. So what does head of Sustainable
Speaker 1: Development mean at Glencore. You're right, it does its lots
Speaker 1: of different things and lots of different companies. In glen Core,
Speaker 1: my responsibility is really engaging with our external stakeholders, hearing
Speaker 1: what does the outside world expect of us, communicating to
Speaker 1: the outside world what we're doing and how we're doing it,
Speaker 1: and then translating those expectations of the outside world into
Speaker 1: our company and thinking about how to translates it into
Speaker 1: the operational landscape. And clearly one of the biggest expectations
Speaker 1: that our stakeholders have today, of us, of of anybody,
Speaker 1: really is the thinking around the transition to a low
Speaker 1: carbon economy. And so that's been something that's been a
Speaker 1: very significant part of my role for the last few years,
Speaker 1: and it looks like it's only going to increase. But
Speaker 1: that is clearly when we look at our at the
Speaker 1: expectations that the outside world has of us. In addition
Speaker 1: to managing our operations responsibly managing our environmental and social footprint,
Speaker 1: it's all so hugely centered around what are we as
Speaker 1: a company doing to as part of the global transition
Speaker 1: to low common economic one. So you noted that one
Speaker 1: of the things that drew you to the mining industry
Speaker 1: was the ability to be part of this transition. And
Speaker 1: when you started or when looking at the company to
Speaker 1: begin with, let's start talking about the emissions. So where
Speaker 1: do the emissions come from and where is the work
Speaker 1: to be done? So there are two primary sources of
Speaker 1: emissions for a company like glanc Core. The first source
Speaker 1: is the emissions arising from its own activities, so the
Speaker 1: so called Scope one and two emissions arising from the
Speaker 1: use of diesel in our trucks or the use of
Speaker 1: electricity in our smell test the emissions that we cause
Speaker 1: directly through our operations. The second source of emissions is
Speaker 1: from the use of our products um and in the
Speaker 1: case of blank row with our portfolio of co operations,
Speaker 1: the majority of those emissions are coming the use of
Speaker 1: the code that we produce by our customers. Yes, so
Speaker 1: this this is the Scope three element. So then that
Speaker 1: leads me next into what our glend cores targets. When
Speaker 1: we think about these three scopes of emissions for a
Speaker 1: company like glenk where with the product portfolio that we have,
Speaker 1: about ten percent of our total emissions footprint comes from
Speaker 1: our Scope one and two emissions, So the emissions that
Speaker 1: are specific to our operations and the remainder comes from
Speaker 1: from the use of our product, and that split is
Speaker 1: fairly consistent across the large diversified mining sector. So when
Speaker 1: we thought about our targets, when we thought about, well,
Speaker 1: what does a meaningful commitment to decorganization look like, we
Speaker 1: realize that it has to include emissions from our products
Speaker 1: as well as those from our own operations. So we
Speaker 1: must think in terms of our operational footprint, but also
Speaker 1: holistically about our portfolio. So our targets are we have
Speaker 1: a short term target of reducing our Scope one, two
Speaker 1: and three emissions by by against nine levels. Then in
Speaker 1: five we have set ourselves a target of reducing our
Speaker 1: missions by and then finally we have an ambition of
Speaker 1: achieving net zero by again across our total footprint. And
Speaker 1: I keep emphasizing that because when we thought about our missions,
Speaker 1: we thought, well, focusing purely on our industrial footprints is important,
Speaker 1: and obviously it's something that we must do, but it's
Speaker 1: really only ten of the total footprints. So we must
Speaker 1: think about everything. We must think about our company as
Speaker 1: a whole. We must think about our portfolio, on our
Speaker 1: business strategy, and to think about what we can do
Speaker 1: to reduce the emissions from our product as well as
Speaker 1: from our own operations. So how were the timelines chosen?
Speaker 1: Were they reverse engineered off of warming projections from the
Speaker 1: I B c C or were they really focused more
Speaker 1: around this is what we think is actually feasible if
Speaker 1: we're going to pivot these operations and really transition them
Speaker 1: rather than offload the assets to different companies. We started
Speaker 1: out looking at the analysis that's been done by the
Speaker 1: I P c C and really thinking about what does
Speaker 1: the range need to look like if we are to
Speaker 1: support the goals of the Paris Agreement. So we started
Speaker 1: out looking at the midpoint, and we looked at the
Speaker 1: range that would be necessary for us to achieve, and
Speaker 1: we then reviewed that against our business portfolio, our business strategy,
Speaker 1: our footprint to understand what would be a stretching but
Speaker 1: possible target for our business. And then we work backwards
Speaker 1: and thought about, well, you know is a key it's
Speaker 1: obviously the midpoint in the journey. It's it's a critical
Speaker 1: milestone for us as a company. But working backwards to
Speaker 1: the more sort of short term horizon, again we thought
Speaker 1: about the different scenarios that have been set out, whether
Speaker 1: by the ib c C or the International Energy Agency,
Speaker 1: and that's how we arvived at our target of by
Speaker 1: again think you also about you know, our own company
Speaker 1: and how how can we set ourselves a target that
Speaker 1: is stretching, that is consistent with the decorganization trajectories that
Speaker 1: have been set out, but also that is meaningful within
Speaker 1: our organization. So these targets were well received, I believe
Speaker 1: by the investment community. And how long ago did you
Speaker 1: announce them? We first announced our targets in December of
Speaker 1: last year, and I think the and and thank you
Speaker 1: for something that they were well received. We're very pleased
Speaker 1: by the very constructive engagement that we've had the important
Speaker 1: components of our targets that I think is different from
Speaker 1: from the industry, and I think was particularly important to
Speaker 1: our investors was the inclusion of Scope three in our commitments,
Speaker 1: So moving beyond purely thinking about our industrial footprints and
Speaker 1: thinking about our portfolio holistically and thinking about the emissions
Speaker 1: from from our products. So we announced our first suite
Speaker 1: of targets in December of last year, but we obviously
Speaker 1: we continue to evaluate the work that's being done. We've
Speaker 1: seen a lot of additional modeling being done by the
Speaker 1: i A. For example, they came out with some additional
Speaker 1: scenario modeling earlier this year, and so we reviewed our
Speaker 1: targets and increase them. We moved from by in terms
Speaker 1: of emissions reduction to by five as we continue to
Speaker 1: analyze those uh, those those scenarios and those trajectories and
Speaker 1: continue to ensure that our commitments are tracking to those.
Speaker 1: Let's talk a bit about getting there. How is Glencore's
Speaker 1: business going to change, restructure, reorganized, refocused to meet these
Speaker 1: targets If we move through the different scopes of emissions.
Speaker 1: In terms of our Scope one and two emissions, we
Speaker 1: are doing a lot of work across the organization to
Speaker 1: identify opportunities to reduce our emissions from our operations, whether
Speaker 1: it's looking at lower emission vehicle technologies, whether it's looking
Speaker 1: at automation, or looking at increasing the amounts of renewable
Speaker 1: power that we're purchasing to support our our smelters. So
Speaker 1: there is an industrial decarbonization program that's in place, and
Speaker 1: that is continuously valuating different opportunities and incorporating them into
Speaker 1: our project management frameworks. From a portfolio perspective, and again
Speaker 1: bearing in mind that our total emissions footprints arises from
Speaker 1: the use of our products by our customers. We have
Speaker 1: made a commitment to prioritize capital allocation towards the metals
Speaker 1: that support the transition to a low carbon economy, which
Speaker 1: means that over time, we've made a commitment to decline
Speaker 1: our production of coal across our portfolio, but to do
Speaker 1: so in a responsible manner. So rather than you know,
Speaker 1: pressing the switch as some have asked us, and shutting
Speaker 1: down the mind and walking away from them overnight, we
Speaker 1: recognize that we have a responsibility see to our workforce,
Speaker 1: and to our communities and to the environments in which
Speaker 1: we operate to manage the decline of those operations over
Speaker 1: time and to do so in a responsible, consistent manner.
Speaker 1: So over over time and in line with the targets
Speaker 1: that we've set ourselves, we are looking to decline the
Speaker 1: production of our of our coal operations and that is
Speaker 1: a key contributor to our overall emissions reduction. So you're
Speaker 1: declining your coal operations and looking at these measure saying
Speaker 1: energy transition focused metals, what would which medals are those?
Speaker 1: What would them be? Glencra has a uniquely diversified portfolio,
Speaker 1: so we have a significant copper exposure, a copper portfolio,
Speaker 1: we have a number of nickel producing mines um we're
Speaker 1: one of the largest producers of cobalts, which is obviously
Speaker 1: a critical mineral in um in enabling the transition to
Speaker 1: a low car low carbon economy through the change in
Speaker 1: transfer station and we also have a number of zinc,
Speaker 1: chrome and alloys operations, So we have a very diversified
Speaker 1: portfolio of metals, all of which play a critical role
Speaker 1: either in continuing to meet the needs of society or
Speaker 1: in enabling that transition to a low carbon economy by
Speaker 1: providing the metals and needed for the energy systems and
Speaker 1: for the transportation industry, and you mentioned your workforce. This
Speaker 1: has definitely been a hot button topic around the coal
Speaker 1: industry around the world because coal mining closures are not uncommon,
Speaker 1: but in several places around the world, not excluding the US,
Speaker 1: and there's been a lot of talk around what do
Speaker 1: we do with this workforce? Do you foresee this workforce
Speaker 1: working in another mining capacity in other parts of the world,
Speaker 1: because I'm even seeing you know, the goal coal Balt
Speaker 1: is a good example of there may not necessarily be
Speaker 1: the same workforce at a coal mine that would then
Speaker 1: be available to mine cobalt. Look your rights, it's I
Speaker 1: think it's one the challenges that we face, not just
Speaker 1: in terms of the workforce, but also in terms of
Speaker 1: the communities that live around these operations and will obviously
Speaker 1: be exposed to um challenges if the operations come to
Speaker 1: come to an end within Blanc or we acquire our
Speaker 1: operations to manage to maintain closure plans, and the closer
Speaker 1: they're getting to that date of closure, the more effort
Speaker 1: there is expected in terms of engaging with the workforce
Speaker 1: and engaging with the community, and some of the opportunities
Speaker 1: might be redeployments to other mining mining operations. Where that's possible,
Speaker 1: it might be retraining um And this is where local
Speaker 1: governments play a critical role, particularly when we're thinking in
Speaker 1: the context of this just transition concept. As local regional
Speaker 1: governments are thinking about transitioning their regions towards a low
Speaker 1: carbon economy, they may be thinking about building up renewables
Speaker 1: capacity or develop innovation opportunities, and so we as as
Speaker 1: as a mining company, will be working very closely with
Speaker 1: those regional authorities to understand how we can support that
Speaker 1: regional development plan through our operational closure planning. So having
Speaker 1: this plan that's clearly defined in terms of when you
Speaker 1: want to achieve certain targets certainly gives government something that
Speaker 1: they can then rely on in terms of to your
Speaker 1: point on the just transition, thinking about what happens to
Speaker 1: these people on the other side, what are you your
Speaker 1: views right now on the existing emissions reduction targets for
Speaker 1: the countries that you're operating and are they realistic or
Speaker 1: some of them too ambitious, And how does this impact
Speaker 1: the way that that you look at achieving these targets.
Speaker 1: I think that that we have to look at these
Speaker 1: targets as as a point in time you know, if
Speaker 1: we think about how much has changed in this space,
Speaker 1: even just in the lost twelve to eighteen months, you know,
Speaker 1: we have all the major economies of the world, including
Speaker 1: China and the US, committing or recommitting to the Paris Agreement,
Speaker 1: committing to achieving net zero by fifty or twenties sixty.
Speaker 1: We've seen some very ambitious targets being put forward by
Speaker 1: by the European Union and by the United Kingdom. So
Speaker 1: we've seen so much happened so quickly in this space
Speaker 1: that it seems clear that the forward momentum is is
Speaker 1: very strong if we look at the individual targets, the
Speaker 1: the nationally determined contributions that have been set forward by
Speaker 1: by various countries around the world. You know, we've seen
Speaker 1: some commentary from the likes of the ib c C
Speaker 1: that they're not sufficiently ambitious or rapid to achieve the
Speaker 1: level of change that is needed. But I think what
Speaker 1: we must also take into account is the dynamics of
Speaker 1: change and the momentum, and the fact that you know,
Speaker 1: to alter eighteen months ago, this home minded focus on
Speaker 1: achieving net zero was not even uh on on on
Speaker 1: our radar. When you think about the pace of change.
Speaker 1: I'm optimistic that we will see continued momentum carry forward
Speaker 1: and and and increase the pace of ambition. In some
Speaker 1: of these contributions, things do seem like they're happening slowly
Speaker 1: and then suddenly quite fast. So see if we can
Speaker 1: continue to accelerate that momentum. When we think about communities
Speaker 1: that are dependent on coal for energy right now various kinds,
Speaker 1: there's energy access, and then there's the fact that oftentimes
Speaker 1: it's the same communities that have will be experiencing outsized
Speaker 1: impacts of climate change. First, how does a company like yours,
Speaker 1: when you're focusing on these scope three emissions kind of
Speaker 1: way up the two regarding energy access and then climate impacts,
Speaker 1: given that you know there's the right now and then
Speaker 1: there's the not so far away future. And that is
Speaker 1: exactly why we looked at the emissions arising from our
Speaker 1: products as well as those from from our operations. When
Speaker 1: we think about the transition to low carbon, when we
Speaker 1: think about the transition to renewable energy, we are cognizant
Speaker 1: that we cannot just flip the switch. Forgive the pun.
Speaker 1: Can't overnight switch to renewables. You are unswitched on after all,
Speaker 1: so there's switching unintentional, but we you know, under any
Speaker 1: scenario that's been set out by the the I A
Speaker 1: and by the others, cole continues to play a role.
Speaker 1: It diminishes, It diminishes very significantly under certain scenarios, but
Speaker 1: it is there. And as we are switching to the renewables,
Speaker 1: as we're increasing the contents of renewables and our energy systems,
Speaker 1: as we're improving the efficiency of energy storage and energy transmission,
Speaker 1: we must continue to maintain that access to energy, particularly
Speaker 1: in the poorer countries that don't necessarily have the capacity
Speaker 1: or the support today to get that that transition to renewables.
Speaker 1: So the coal continues to play a role. It will
Speaker 1: diminish over time, but today it is part of the
Speaker 1: energy mix. So when we thought about our commitments, we
Speaker 1: thought that that was part of our thinking. But we
Speaker 1: as as you say, we realize that there's the needs
Speaker 1: of today, but there's also the needs of tomorrow, and
Speaker 1: so we committed to reduce the production over time so
Speaker 1: that as we are transitioning, we can the coal can
Speaker 1: decline and the proportion of renewables is increasing. Our targets
Speaker 1: have been set, so we are we're committed to that trajectory.
Speaker 1: We as as as we said, we do anticipate that
Speaker 1: coal will remain some part of the conversation, but our
Speaker 1: reductions are are put in place in line with the
Speaker 1: scenarios that have been set by the by the I
Speaker 1: A and by the I P c C. Well, so
Speaker 1: you're saying that coal will still remain part of the
Speaker 1: portfolio in the future. And if we're thinking about the
Speaker 1: mining industry and this net zero ambition that you have,
Speaker 1: other than buying offsets, which I don't believe Glencore does,
Speaker 1: how does or maybe what are the technologies that may
Speaker 1: get Glencore to net zero. When we looked at our
Speaker 1: when we look at our trajectory of our of our targets,
Speaker 1: we made the decision not to use offsets as part
Speaker 1: of our day organization trajectory. It may be something that
Speaker 1: we look at for commercial purposes, but in terms of
Speaker 1: reducing our emissions footprint, we believe that we will be
Speaker 1: able to achieve our target of reduction by without without
Speaker 1: using offsets. And one of the reasons for that is, well,
Speaker 1: there's a couple of reasons for that. One based on
Speaker 1: our assessment of the Paris rule book. The rules around
Speaker 1: offsets remain very unclear, and we've seen some criticism come
Speaker 1: up of less scrupulous scrupulous treatments of offsets globally, um,
Speaker 1: you know, instances of double counting, or instances of just
Speaker 1: a lot of confusion around how offsets are treated, accounted
Speaker 1: for and managed. So we were concerned by this level
Speaker 1: of uncertainty and we didn't want to rely on something
Speaker 1: where there's still so much work that needs to be
Speaker 1: done as a pillar of our dec organization. We're also
Speaker 1: very conscious that the expectation is that offsets can be
Speaker 1: used for those hard to abate emissions. So we put
Speaker 1: on ourselves the expectation to do as much as we
Speaker 1: can on our own, on our own efforts, UM, and
Speaker 1: then look at what is left and consider whether perhaps
Speaker 1: in the future, with greater regulatory certainty, we may look
Speaker 1: at usets as a possible option. What are some of
Speaker 1: the technologies that we can that we're looking at. You know,
Speaker 1: there is a lot of work that we are we
Speaker 1: can do, and we think it's very interesting in the
Speaker 1: renewable space, in increasing the proportional renewable energy in our
Speaker 1: in our purchases of energy globally, for our operations. There
Speaker 1: are a number of technologies around which U seeing the
Speaker 1: emissions from vehicles, sort of reducing the diesel the amount
Speaker 1: of diesel that we use in our operations to either
Speaker 1: reduce emissions or even zero emissions. I think that technology
Speaker 1: is still a little bit further off in the future,
Speaker 1: but certainly there's a lot of work being done towards it,
Speaker 1: greater deployment of battery vehicles. I think there's a lot
Speaker 1: of different opportunities that that we're looking at, and I
Speaker 1: think that's an important point. You know this, this challenge
Speaker 1: is so enormous and so complex, it requires all the
Speaker 1: different solutions. There's no single solution, there's no single technology,
Speaker 1: there's no single kind of magic pill that just solves
Speaker 1: the whole problems. So for a company as complex as ours,
Speaker 1: is diversified as ours, we're looking at multiple strategies, multiple
Speaker 1: opportunities that will all come together to help us drive
Speaker 1: that decorganization forward. Now for a very short break, stay
Speaker 1: with us, let's pivot a little bit, and let's talk
Speaker 1: about your publicly listed company. You know this, the reality
Speaker 1: of the investment community and their influence on the way
Speaker 1: companies behave is ever present, as investors are increasingly focused
Speaker 1: on E s G metrics and we've seen this by
Speaker 1: several funds just closing over the just the last month alone,
Speaker 1: very good size. How do you think the investment community
Speaker 1: should look at companies that I would consider really at
Speaker 1: the heart of the energy transition, those that have fairly
Speaker 1: large emissions profiles and have a long space to go,
Speaker 1: but then you know, a lot of opportunity, a lot
Speaker 1: of opportunity to make a big difference. How do you
Speaker 1: think that they should look at these companies in terms
Speaker 1: of time horizon? How should they look at these companies
Speaker 1: in terms of how quickly these companies are transitioning and
Speaker 1: the work that needs to be done. I think what's
Speaker 1: important in analyzing companies commitments to decorbonization is understanding to
Speaker 1: which to the the center which these commitments are holistic.
Speaker 1: So again I talked about this before. I'll give you
Speaker 1: an example. Our industrial emissions footprint is ten percent of
Speaker 1: our total footprint, So if we were to focus only
Speaker 1: on that portion of our footprint, we would be dismissing,
Speaker 1: would be ignoring the majority of the emissions that our
Speaker 1: company contributes to. So looking holistically at the emissions footprints,
Speaker 1: both from an operational perspective, but also from a portfolio perspective,
Speaker 1: I think is critical to assessing the company's commitment. I
Speaker 1: think also the way that these commitments are going to
Speaker 1: be achieved. You know, we get us sometimes well, why
Speaker 1: don't you just press the button? Why don't you just
Speaker 1: close these minds? Why don't you just stop operations that
Speaker 1: contribute significantly to to TO to the car global carbon footprints?
Speaker 1: And I understand where people are coming from with that question,
Speaker 1: But the challenge that we have is, you know, by
Speaker 1: pressing that button, we're putting thousands or tens of thousands
Speaker 1: of people out of jobs. We're impacting their families, were
Speaker 1: impacting those communities. By walking away from those operations, were
Speaker 1: potentially leaving them for somebody else to operate them, perhaps
Speaker 1: in a less responsible way. So the manner in which
Speaker 1: we achieve the decorganization, the ensuring that the decorganization is
Speaker 1: managed responsibly, that the transition is supported and enabled, and
Speaker 1: thoughts about also from the perspective of those people who
Speaker 1: are vulnerable to it. I think that's it's an important
Speaker 1: consideration in again assessing the commitment to dec organization. And
Speaker 1: I suppose the final consideration, the final vector of analysis
Speaker 1: is understanding the extent to which a company's business model,
Speaker 1: a company's portfolio is positioned to thrive in the transition.
Speaker 1: Is a company's portfolio is sufficiently diversified. Is an exposed
Speaker 1: to the does have the right commodity mixed in it
Speaker 1: to not only enable the transition but also to to
Speaker 1: to benefit from it. Is the company's portfolio sufficiently future
Speaker 1: proof for this world that we are working towards. So
Speaker 1: I think those are the three axes of of consideration.
Speaker 1: Is there is the decorganization holistic, is the commitment's whole
Speaker 1: of business? Is the thoughts about in a responsible manner?
Speaker 1: And is the company itself well positioned to uh for
Speaker 1: for the future of the decoganization process? And how of
Speaker 1: your interactions with Climate Action one hundred impacted how you
Speaker 1: guys approached these issues. We've been speaking to Climate actually
Speaker 1: one hundreds for five years now. We first started in
Speaker 1: UM back in two thousands sixteen, and throughout I think
Speaker 1: we've been very fortunate. We've had a very positive, very
Speaker 1: positive dialogue. It's been very constructive, it's been respectful, it's
Speaker 1: been two way. I think we have certainly benefited from
Speaker 1: our counterparties and Climate Action one hundred plus really providing
Speaker 1: very helpful feedback, providing helpful context, explaining the expectations of
Speaker 1: the investor community, but also acting as a sounding board.
Speaker 1: I think we've built up a relationship of trust where
Speaker 1: we're able to work with them to discuss different ideas,
Speaker 1: discussed different strategies, and to assess with them what uh
Speaker 1: you know, how these strategies are positions against our commitments
Speaker 1: and against those expectations. So it's been a really helpful dialogue.
Speaker 1: I think it's really helps us evolved, evolve and grow
Speaker 1: um and hopefully our our counterparties within the initiative have
Speaker 1: also found it useful as we're building up that that
Speaker 1: knowledge and working together in working towards the decorganization. Well,
Speaker 1: let's go back to the business and the way it
Speaker 1: works a little bit, and this one area where people
Speaker 1: have been focusing a lot of attention lately has been
Speaker 1: the potential of the circular economy and having nothing ENDPTH
Speaker 1: in the was stream and in particular in the metals
Speaker 1: and mining space in regard to battery amount. Also's been
Speaker 1: a focus on how do we tackle this and the
Speaker 1: question I have is you know, do you think that
Speaker 1: we will reach a point where medals who many of
Speaker 1: which can be recycled many times over, where we could
Speaker 1: reach a not entirely but close to circular economy And
Speaker 1: is that space the glin core is looking at. So
Speaker 1: Blanco is one of the largest recyclers, um we have
Speaker 1: recycling operations all over the world, and so yes, absolutely
Speaker 1: we consider ourselves to be part of the of the
Speaker 1: circular economy. Is that the solution unfortunately probably not under
Speaker 1: any projection that we see, any scenario, any modeling that's
Speaker 1: been done again, whether by the International Energy Agency or
Speaker 1: even by the i p c C. We need new material.
Speaker 1: We need new material to meet meet the needs of
Speaker 1: a growing population. We need new material if we are
Speaker 1: to make the switch in terms of the energy and
Speaker 1: trance quotation sectors. We certainly need more recycling. We certainly
Speaker 1: need to see improvements in recovery rates. We need to
Speaker 1: see more physically more recycling happened. We need to see
Speaker 1: the regulatory framework strengthened to support a greater uptake of recycling.
Speaker 1: But that is not going to be the only answer.
Speaker 1: We're not going to be positioned to meet all the
Speaker 1: needs through through recycling. Clearly, another consideration in this is lifestyle,
Speaker 1: and I think there is a lot that needs to
Speaker 1: happen in terms of how we think about consumption, how
Speaker 1: we think about evolving needs of society. And while all
Speaker 1: of that means that that there should and probably will
Speaker 1: be greater uptake of recycling, there's still going to be
Speaker 1: more people in the world. They're going to need more
Speaker 1: more materials, more vehicles, more energy, and all of that
Speaker 1: is going to require new materials, new metals. Let's talk
Speaker 1: about some of the technologies that are urging in the
Speaker 1: mining space, such as black chain. What are the main
Speaker 1: sources of innovation that you're seeing, either in circular or
Speaker 1: the non circular side of things. I think from an
Speaker 1: industrial perspective, we're seeing a movement towards reduced the mission vehicles,
Speaker 1: zero mission vehicles actually vehicles and all of that. There's
Speaker 1: a lot of work being done to help the mining
Speaker 1: industry reduce reduced the emissions arising from from the vehicles
Speaker 1: that we used to to to whether it's to dig
Speaker 1: the minds or to move the material or to transport
Speaker 1: our products from a From a supply change chain perspective,
Speaker 1: I think the blockchain is really interesting and we have
Speaker 1: a number of projects that we're involved with where we're
Speaker 1: looking at how blockchain can be used to support greater
Speaker 1: traceability and transparency. I think one thing that we're very
Speaker 1: conscious of is decomanization can't come at any cost. It
Speaker 1: doesn't come at the cost of cutting corners. We must
Speaker 1: still operate with responsibly. We must produce these metals that
Speaker 1: are needed for a low common economy in a responsible manner.
Speaker 1: And the way that we demonstrate that can can be
Speaker 1: done through blockchain um as a vehicle for greater reliability
Speaker 1: and which more more traceable data on how on how
Speaker 1: these materials are produced. So that's something that's that's really
Speaker 1: interesting and I think it supports this focus on responsible
Speaker 1: production of metals, but it also speaks to and and
Speaker 1: enables greater collaboration across the value chain. Nobody can go
Speaker 1: it can do this alone. Nobody can achieve perfect decorganization alone.
Speaker 1: We need support. We need partnerships, whether it's with our
Speaker 1: suppliers or it's with our customers, to think about how
Speaker 1: we can support support all of these different efforts, whether
Speaker 1: it's through our long term agreements with our customers, or
Speaker 1: whether it's through blockchain where we're all of us able
Speaker 1: to work together to to enable the greater transparency around
Speaker 1: our products. When you talk about blockchain and things that
Speaker 1: it's trying to address making sure that these metals are
Speaker 1: being sourced in a responsible way, what does that mean?
Speaker 1: What is can you expand upon? I guess what the
Speaker 1: irresponsible things are that you're looking for with blockchain? I
Speaker 1: suppose there it could be something as simple as including
Speaker 1: in the blockchain the greenhouse gas footprint of a particular product,
Speaker 1: and so you know, what are the emissions associated with
Speaker 1: this ton of of cobalt or or whatever it might be.
Speaker 1: It might be something a bit more complicated, alike, how
Speaker 1: are how is the company producing this metal managing its
Speaker 1: commitment to respect human rights? Um, it might be great
Speaker 1: secularity around how the steps that were taken to ensure
Speaker 1: that there was no child labor involved in the production
Speaker 1: of this metal. So it can be any and as
Speaker 1: I said, some of the some of the data is
Speaker 1: right straightforward. It might be a simple number, you know,
Speaker 1: the the amount of emissions associated with the product, or
Speaker 1: it might be something more sophisticated. But what it enables
Speaker 1: is for the for the customer or the end user
Speaker 1: to have confidence that the product is produced responsibly and
Speaker 1: that it helped it plays a part in that greater goal.
Speaker 1: So switching tracks again, Glencore has increased their stake in
Speaker 1: a business called British Vault, which is a battery factory,
Speaker 1: and I want to know a little bit more about
Speaker 1: British Vault and some of the opportunity that is seen
Speaker 1: there and additionally, if there are other opportunities that Glencore
Speaker 1: is looking at, not directly as a part of their business,
Speaker 1: but more as a part of their portfolio. Well, I
Speaker 1: think British Cold is a really exciting example of how
Speaker 1: we leverage our marketing capability in addition to our industrial
Speaker 1: uh the industrial side of our business. So through our
Speaker 1: marketing arm we're able to work with our customers um
Speaker 1: whether it's on securing long term agreements that enable them
Speaker 1: to meet their objectives of for example, producing battery battery
Speaker 1: vehicles which they're able to commit to because they have
Speaker 1: a long term agreement with us for a supply of
Speaker 1: cobalt that they need for those for those vehicles, or
Speaker 1: as in the case of British Vault, and also earlier
Speaker 1: this year, a Norwegian company called Fair an investment agreement
Speaker 1: where we are actually participating in the long term success
Speaker 1: of that of those companies by supplying them with low carbon, cobalt, nickel,
Speaker 1: the metals that they need. So it's a partnership that
Speaker 1: leverages our strengths as a producer, but also builds on
Speaker 1: the relationship that we have developed through our marketing arm
Speaker 1: and feeds into that portfolio strategy of positioning the company
Speaker 1: in that decarbonization future. One. Now, let's talk about one
Speaker 1: of the may be more effective in Europe ways of
Speaker 1: reducing a mesh. I'm thinking of the e v T S.
Speaker 1: Let's talk about carbon trading versus a carbon tax in
Speaker 1: which you think might be the better or more effective
Speaker 1: mechanism for decarbonization. To be honest, I think either it
Speaker 1: will work as long as the mechanisms are designed effectively.
Speaker 1: I think both of them have their advantages. A carbon
Speaker 1: tax regime is predictable. It supports that long term investment
Speaker 1: that is so important for companies such as the in
Speaker 1: the mining industry. Carbon trading regimes such as the the
Speaker 1: the Emissions Trading Scheme and in Europe drives that greatest
Speaker 1: certainty in terms of ensuring that the emissions targets will
Speaker 1: be met. So they both have very strong advantages, but
Speaker 1: we've also seen both of them be less successful where
Speaker 1: the design enabled too much volatility, outsize allowances for for
Speaker 1: various sectors, or just poor enforcement. So I think both
Speaker 1: have both can contribute, Both can enable decarbonization. The question
Speaker 1: is does the design support rigor in um in driving
Speaker 1: those those commitments or does it allow for too much
Speaker 1: flexibility that so so that that is less effective. Well,
Speaker 1: and this really comes down to policy makers and what
Speaker 1: do you think they should be doing to accelerate the
Speaker 1: energy transition? And maybe maybe that's carbon tax or carbon trading, um,
Speaker 1: but what sorts of things should they be looking at
Speaker 1: more closely to try and get there. I think it's
Speaker 1: one of the big issues that we see is inconsistency
Speaker 1: its countries, regions operating in silos. So while I think
Speaker 1: a global carbon carbon price or global carbon market is
Speaker 1: perhaps not realistic, a more harmonized approach would would allow
Speaker 1: companies to work more holistically across their their full value chains,
Speaker 1: So I think work in that direction would be beneficial.
Speaker 1: I think one area that we're all hoping to see
Speaker 1: some clarity and perhaps coming out of the COP twenty
Speaker 1: six meetings later this year is a resolution of the
Speaker 1: treatments of offsets, the treatments of carbon accounting, the mapping
Speaker 1: of the different efforts around the world and thinking about
Speaker 1: them again from that kind of holistic, consistent perspective. Well,
Speaker 1: we've been across a number of topics and the time
Speaker 1: that we've had, and I've got one for you that's
Speaker 1: kind of outside of center, which is in not in
Speaker 1: the mining space. What energy transition technologies do you feel
Speaker 1: are most overhyped or perhaps most under hyped that may
Speaker 1: have potential that we haven't yet realized. Let me preface
Speaker 1: by saying I think all technologies have a role to play.
Speaker 1: Dec organization is enormously complex. It's an unprecedented level of
Speaker 1: challenge that we face as a society. So to say
Speaker 1: any one technology does not work is probably incorrect. We
Speaker 1: need every everybody to play their part, every piece of
Speaker 1: the puzzle to come together. So I don't think there's
Speaker 1: any technology that we would say, oh, you know, it
Speaker 1: just doesn't have a role at all. They all do.
Speaker 1: I think the question is the the amounts of attention
Speaker 1: and resources that is poured into into particular areas. And
Speaker 1: I think one area that we've been perhaps a little
Speaker 1: bit more skeptical of today is sort of the is
Speaker 1: that the technology around direct air capture, this concept of
Speaker 1: taking carbon dioxide straight out of the atmosphere. All the
Speaker 1: technology has been around for a long time, it's been proven,
Speaker 1: I suppose, you know, there's been so much resource, so
Speaker 1: much investment put into it to date, and yet it
Speaker 1: remains relatively a relatively small contributor to the overall emissions,
Speaker 1: and in the scenarios that we've seen, it's total contribution
Speaker 1: in the near future, in the next sort of ten
Speaker 1: years and so remains quite small. So while it absolutely
Speaker 1: has a role to play in that total spectrum of
Speaker 1: things we must be doing, I suppose the question for
Speaker 1: me is how much effort do we put into that
Speaker 1: technology versus some of the other ones, where perhaps the
Speaker 1: scalability and the rates of adoption and the scale of
Speaker 1: change could be um could potentially be great. So excellent, Well,
Speaker 1: I just want to say thank you very much for
Speaker 1: coming on today and telling us a bit more about
Speaker 1: how Glencore is going to tackle not just Scope one
Speaker 1: and two, but Scope three emissions. We look forward to
Speaker 1: checking back with you over the years and seeing how
Speaker 1: you're getting on. As I know, the targets are new,
Speaker 1: but the near term goals are just around the corner,
Speaker 1: and so I know that you will be extremely busy.
Speaker 1: Thank you, it's been great talking to you. Today's episode
Speaker 1: of Switched On was edited by Rex Corner the gray
Speaker 1: Stoke Media bloom Berginias was provided by Bloomberg Finance LP
Speaker 1: and its affiliates. This recording does not constitute, nor should
Speaker 1: it be construed as investment advice, investment recommendations, or a
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