South32

No leading practices were identified for this company.

South32 conducts a climate change scenario analysis and uses some insights from this in its strategic planning. While the company’s transition plan contains descriptions of relevant and achievable long-term actions and carbon price considerations, it does not provide short-term actions due to commercial and technical challenges.

No leading practices were identified for this company.

No leading practices were identified for this company.

South32 aims to reduce its scope 1 and 2 emissions by 50% by 2025 compared to fiscal year 2021 levels and to achieve net zero by 2050 across all emission scopes. Although the company has ambitious emissions reduction targets, it should raise its ambition to get on track with a 1.5°C scenario. Additionally, while the company has shown a 4% decrease in its emissions intensity from 2017 to 2022, this falls behind the industry-level expectations for emissions reduction.

South32’s one of the independent non-executive directors is a member of the World Economic Forum’s (WEF’s) Climate Governance Community. Next to this, there is no evidence of climate expertise on the company’s board. The company also does not reveal its revenue from low-carbon products. Despite having short-, medium-, and long-term decarbonisation goals, South32 states that transforming the electrical grid infrastructure is beyond its strategy and core capabilities. The company is exploring low-carbon business models, investigating technologies like EnPot and AP3XLE for energy efficiency at its facilities. However, these are in the initial stages and the company reports no growth plans or financial details for them. To improve its credibility and substantiate the development of its low-carbon business activities, the company should report their profitability, current size, growth potential and deployment details.

South32 is investigating various technologies to decarbonise its operations, such as AP3XLE and EnPot. However, no evidence was found showing the company’s contribution to low-carbon electricity generation. Additionally, no evidence was found that the company has commitments to reduce scrap in its operations. The company should develop a comprehensive plan for scrap reduction with quantitative targets and a timeline. It should also detail its method for implementing this plan. Moreover, the plan should be regularly monitored and its responsibility should lie with high-level employees in the company. South32 has not disclosed its research and development (R&D) expenditure in the last three years, nor has it provided quantitative data on its investment in low-carbon technologies.

South32 describes its engagement approach with industry associations regarding climate change and commits to terminating its membership in instances of significant misalignment with its own climate position. Additionally, it openly endorses major climate policies and commits to international low-carbon initiatives, like the Paris Agreement. South32 requires its suppliers to minimise their emissions as well as report scope 3 emissions. However, there is no evidence that the company has any quantified emissions reduction requirements for suppliers. The company lacks both supplier and client engagement strategies to promote emissions reduction and the low-carbon transition. However, it does not disclose any monitoring and review mechanism to ensure its policy positions are consistent with the objectives of the Paris Agreement.

South32 publicly discloses its emissions data and has a net-zero emissions target for 2050 across all emission scopes. The company has made financial investments to enhance energy efficiency and reduce the emissions intensity of its operations. It provides financial projections in some instances. While the company’s transition plan contains descriptions of relevant and achievable long-term actions and carbon price considerations, it does not provide short-term actions. The company uses climate change scenario analysis for some strategic insights but can provide more details on how the analysis has informed its climate-related targets and transition plan.

South32 details its low-carbon transition plan to achieve its scope 1 and 2 emissions reduction targets. Furthermore, it has decreased its emissions intensity by 2% between 2017 and 2022. However, it needs to further decrease its emissions intensity to align with industry-level expectations. To align with 1.5°C pathway, the company needs to deliver 1.9% reductions annually between 2022 and 2027. The company should also improve disclosure of its transition plan by providing the scenario analysis metrics and the materiality assessment of its climate-related risks.

In the fiscal year 2023, the company set a new goal to achieve net-zero scope 3 emissions by 2050. Considering the fact that more than 50% of the company’s scope 3 emissions are from sold products, it should improve its efforts to engage with its supply chain to promote decarbonisation.

South32 provides information regarding its low-carbon capital expenditure. However, it fails to provide data on its low-carbon R&D expenses. Also, the company is exploring low-carbon business models, investigating technologies like EnPot and AP3XLE for energy efficiency at its facilities. However, these are in the initial stages and the company reports no growth plans or financial details for them.

South32 has a low-carbon transition plan containing descriptions of relevant and achievable long-term actions to achieve its emissions reduction targets along with associated financial estimations. The company conducts a climate change scenario analysis and uses some insights from this in strategic planning. However, it should provide more details on how its scenario analysis has informed its climate-related targets and low-carbon transition plan.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including employees and agency contractors, local communities, investors as well as governments. Furthermore, the company demonstrates ongoing social dialogue and meaningful engagement with affected stakeholders through campaigns, leadership calls, open and transparent dialogues, site visits and other initiatives. The company incorporates social dialogue and stakeholder engagement in its just transition planning. However, no evidence was found that the company has a set of time-bound, measurable indicators to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes to create jobs, such as partnering with Solana Energy to create a Solar Training Academy to upskill young electricians in the field of solar photovoltaic technology. However, the company does not disclose the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups.
No relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to reskill and upskill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it has collaborated with Sena Technologies and other partners to invest in three phases of education facilities in Colombia, enabling diverse vocational trainings and preserving local traditions while benefitting the local economy. However, the company does not disclose the measures it takes to embed equality of opportunity for women and vulnerable groups in these actions. Furthermore, no relevant disclosure was found of a process for identifying skills gaps for workers and affected stakeholders in the context of the transition.

No relevant disclosure was found to show if the company identifies the impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to their social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.
The company discloses information on the misalignment of its lobbying activities with policies and regulations that support the just transition. Furthermore, it discloses the measures it takes to address misalignment. For example, it has reviewed three of its trade associations on their just transition and climate advocacy. However, no evidence is available to show the company also lobbies for just transition policies through its trade associations.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of its required working hours. The company discloses some indicators of workforce diversity, such as age and gender. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits to promoting gender equality and women’s empowerment.

The company commits to protecting personal data, but no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data. The company does not disclose its global tax strategy. However, there is disclosure available of the corporate income tax it pays in each relevant jurisdiction. The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. Furthermore, the company has a lobbying and political engagement policy, and it specifies that it does not make political contributions. Regardless, no relevant disclosure was found of the company’s expenditure on lobbying activities.