Glencore Plc · LSE:GLEN
Glencore — ESG Presentation (June 2016)
30 slides from Glencore's sustainability presentation, Jun 13, 2016
Slide 1: 2016 Sustainable Development roadshow
Craig nickel mine employees, Canada 2016 Sustainable Development roadshow London, 13 June 2016
Slide 2: Agenda
Agenda • Opening comments Tony Hayward, Chairman • 2015 Performance highlights and next steps Ivan Glasenberg, Chief Executive Officer • Focus on climate change Andrew Fikkers, Glencore Coal • Q&A 2
Slide 3: Opening comments
Sudbury nickel smelter, Canada Opening comments Tony Hayward, Chairman
Slide 4: Year in review – 2015 milestones
Year in review – 2015 milestones Governance Health & Safety • Revised Code of Conduct rolled out • 62% reduction in fatalities since 2013 • Completed 2 year action plan to achieve • 0 fatalities at focus assets in Kazakhstan, DRC, alignment with ICMM SD Framework Russia and Ukraine • Launched Group
Slide 5: Commitment to dialogue
Commitment to dialogue We maintain dialogue with internal and external stakeholders at all levels of the organisation: Board Senior management Operations • Meetings with • Meetings with • Systematic investors investors, NGOs, engagement with all governments, media stakeholders to • Participation in
Slide 6: Materiality process
Materiality process Assessment process • Annual materiality assessment comprises a review of topics at global and local levels, engagement with internal and external stakeholders, and review of feedback from local communities; • A topic is material if senior management determines that it may signifi
Slide 7: 2015 HSEC Strategy
2015 HSEC Strategy Our Group sustainability strategy comprises four core pillars: health, safety, environment, and community and human rights The strategy enables us to meet legislative requirements, manage the catastrophic hazards associated with our business, and maintain our social license to ope
Slide 8: Board's focus in 2015
Board’s focus in 2015 • Focus on eliminating fatalities across the group Safety is a top • All fatalities reviewed with operational management priority • Turnaround strategies at ‘focus assets’ to improve performance Management of • Identification of hazards with major or catastrophic catastrophic c
Slide 9: Looking ahead
Looking ahead 2016 priorities: • Focus on achieving zero fatalities • Eliminating or mitigating catastrophic hazards across our operations • Supporting resilient communities by maintaining our socio-economic contribution • Revise and strengthen approach to the management and reporting of our exposur
Slide 10: 2015 performance and next steps
Synclinorium shaft at Mopani copper mine, Zambia 2015 performance and next steps Ivan Glasenberg, Chief Executive Officer
Slide 11: Our Strategy
Our Strategy Our objective is to grow total shareholder returns while maintaining a strong BBB/Baa investment grade credit rating Integration of Maintaining a robust Focusing on cost sustainability and flexible balance control and operating throughout the sheet efficiencies business • Key performanc
Slide 12: Prepared for current and even lower prices
Prepared for current and even lower prices • Decisive management of our balance Earnings diversified by commodity(1) … sheet and asset portfolio: Copper 25% • repositioning our capital structure for a Zinc 12% lower price environment – improvement to Nickel 5% c.2x ND/EBITDA by year end Coal 23% • m
Slide 13: Production cuts: managing the impacts of restructuring on the ground
Production cuts: managing the impacts of restructuring on the ground Managing retrenchments - Extended negotiations with workforce, unions and governments - Fully voluntary departure programme executed at DRC assets - No strikes or unrest to date Meeting community expectations - Maintaining all exis
Slide 14: Compliance
Compliance Group compliance teams and 106 Board and Audit Committee oversight Global and local compliance policies Compliance Coordinators worldwide Tone from the top Regular training and screening Business Ethics Committee, chaired by Group CEO Annual compliance confirmation Raising Concerns progra
Slide 15: Catastrophic hazard management
Catastrophic hazard management Focus on risk underpins all areas of HSEC strategy and is a priority for the senior management team Key activities: • Focus on identifying and addressing hazards that could cause catastrophic or major consequences for the business • 19 catastrophic hazards identified a
Slide 16: Focus on safety
Focus on safety 2014 16 fatalities 13 at focus assets 2015 (71,000 people): Kazakhstan, Ukraine, 10 fatalities Bolivia, DRC, Zambia 7 at focus assets Zero fatalities at Kazzinc, Group LTIFR* 1.58 1 DRC, Ukraine 80% of our assets either (48,000 people) improved or reported zero LTIs Group LTIFR 1.32
Slide 17: Mitigating environmental impacts
Mitigating environmental impacts • Zero catastrophic, major or moderate environmental incidents reflect strengthened focus on managing environmental hazards • Strategic water management framework developed that supports better understanding of our water footprint, implementation of targeted water ma
Slide 18: Creating value for our local communities
Creating value for our local communities Agricultural cooperatives in DRC Our aim is to minimise dependency on our operations, and provide opportunities for former promote sustainable communities with diversified and artisanal miners resilient local economies. Our CSI spend reduced due to roll-out o
Slide 19: Stakeholder engagement: Colombia
Stakeholder engagement: Colombia Operations in Colombia continue to be subject of stakeholder interest 2015 fact-finding mission with Glencore senior management, Swiss and Colombian NGOs, Swiss residents and government representatives focused on: • Meeting with local communities to understand concer
Slide 20: Climate change considerations for our business
Climate change considerations for our business Andrew Fikkers, Glencore Coal Bukhtarma hydroelectric plant, Kazakhstan
Slide 21: Climate change and our business: a new Glencore report
Climate change and our business: a new Glencore report New report provides information about how we are managing the opportunities and challenges presented by climate change across our business. Report focuses on: • Approach to reporting on carbon management • Asset resilience in a range of climate
Slide 22: Continued global energy demand growth
Continued global energy demand growth Fundamentals Long-term global energy demand • Population increasing by 17.3% from 7.1 to 8.3 Billion tonnes coal equivalent billion (2013 to 2030) 25 • Global economic growth ave. 3.8% pa to 2030 “ full implementation of these [NDC] pledges will require the ener
Slide 23: Global energy demand growth requires all fuel sources
Global energy demand growth requires all fuel sources IEA Modelling of NDC’s shows absolute coal demand continues to grow • Non-fossil fuel sources to increase by 53% from 3.58 to 5.47 Btce* • Renewables increase 267% from 0.23 to 0.84 Btce* • Developing economies continue to build low cost, coal fi
Slide 24: Portfolio Resilience: seaborne coal demand outlook
Portfolio Resilience Global seaborne coal demand drivers monitored and understood • Electricity, iron & steel, cement and chemical industries underpin demand Regional seaborne coal demand outlook • Demand grows from 1.23 to 1.48 Bt per annum million tonnes 1600 • Glencore continuously monitoring and
Slide 25: Portfolio resilience
Portfolio resilience Seaborne coal supply decays rapidly without further investment Global seaborne traded coal supply million tonnes 1500 • Mines supplying seaborne markets are wasting assets 1000 • Mine depletion metrics are well understood 500 Industry natural supply • Adopting a harvest strategy
Slide 26: Portfolio resilience
Portfolio resilience Supply deficit supports existing assets and provides investment optionality Global traded coal supply & demand million tonnes 1500 • Without future investment in supply Glencore forecast range capacity a substantial deficit emerges • Cumulative coal demand of 19 - 21 Bt from 201
Slide 27: Portfolio resilience
Portfolio resilience Superior traded coal quality • Seaborne traded coal demand growth underpinned by; Thermal coal energy content • Superior quality; high energy, low sulphur & ash kcal/kg nar • Lack of indigenous resources 6000 Australia, South Africa, Colombia export thermal coal 5500 Seaborne tr
Slide 28: Portfolio resilience
Portfolio resilience Glencore’s competitiveness underpinned by low cost position • Glencore’s large, diverse portfolio is well positioned on the cost curve • Production from Glencore’s reserve base will continue to be sold profitably 100 Seaborne traded coal cost ranking USD per tonne 50 Glencore co
Slide 29: Coal technology pathway will reduce carbon emissions
Coal technology pathway will reduce carbon emissions • Investment in low emission coal technology can significantly reduce global emissions and is essential to reach CP21 targets • High efficiency, low emission power stations (Supercritical and Ultra-Supercritical) provide up to a 35% reduction in C
Slide 30: Q&A
Wheat crop in Bute, Australia Q&A