14 November 2018
“Newcrest is not a political party so it doesn’t necessarily take a position on whether the Paris accord is a good idea or a bad idea,” said Peter Hay, chairman of Newcrest Mining, at the company’s annual general meeting yesterday. “It’s up to the Australian people to vote for a politician who can sort out whether Paris is good or bad.”
It’s an interesting comment, somewhat at odds with Newcrest’s Sustainability Report released earlier this week which includes the statement: “We acknowledge climate change is one of the most significant challenges facing the world today and that mining operations contribute to global greenhouse gas emissions” (page 21).
Climate risk confusion
Newcrest, the largest gold producer listed in the Australian Securities Exchange and a significant global player in gold and copper mining, actually lists climate change among the material risks to the business in the company’s 2018 annual report.
The same report also mentions the company is assessing the guidelines recommended by the global Taskforce on Climate-Related Financial Disclosure (TCFD).
However, this detail was apparently missed by their Ernst & Young auditor who, in response to a shareholder question at the AGM, said that climate change is “not material for financial statements.”
The auditor even claimed there was a disconnect between the TCFD and international accounting standards, and that the company therefore has approached climate risk through disclosures in the Sustainability Report. Yet the Climate Disclosure Standard Board and Newcrest’s own annual report both say otherwise!
Adding to the confusion, the chairman later mentioned Newcrest had experienced “floods and droughts in unexpected places,” and then added “so if that’s a symptom of global warming, then we’re ready on the risk frame as well.”
Newcrest recently published a Climate Change Statement that resonates with a statement made by Hay to shareholders at yesterday’s AGM: “energy efficiency is probably the major contribution we can make in terms of reducing carbon emissions.”
But in terms of setting targets for improving energy efficiency and reducing greenhouse gas emissions in the short-, medium- and long-term, we’re yet to see anything tangible from Newcrest.
Newcrest’s Sustainability Report also alludes to its stress testing of assets against climate change scenarios, which was backed up by Hay in response to a shareholder’s question.
“We stress test capital projects on a range of scenarios which are financial, physical, climate, you name it, and put those variables into fairly complex models and try to stress test them against a whole range of things,”
If Newcrest actually is carrying out stress-testing and scenario analysis, shareholders should rightfully expect the company to disclose the details of its resilience under a scenario where global warming is limited to below 2ºC.
A number of companies have faced resolutions where shareholders and institutional investors have used their voting power for climate-related disclosures and strategy alignment with the Paris Agreement. See how you can be involved!