Newcrest has exposure to a range of climate change risks related to the transition to a lower-carbon economy and have used the Taskforce on Climate-Related Financial Disclosure (TCFD) framework to frame its climate change risk assessment.
Newcrest has identified the following risks:
• policy and legal developments
• reputation; and
• increased cost of inputs and raw materials.
Newcrest also identified risks related to the physical impacts of climate change. Gold and copper mining operations are energy intensive and in the short term, Newcrest expects to continue to rely heavily on fossil fuels. However, Newcrest is seeking opportunities to improve its energy efficiency to reduce direct mining and processing costs and is assessing options to use renewable power generation and low emission technologies to reduce its greenhouse gas emissions intensity.
In 2019, the Board approved Newcrest’s climate change policy and from 2020 Newcrest plans to progressively adopt the TCFD framework for reporting on climate related aspects in our Sustainability Report.
Newcrest continues to take steps to manage its risks and build resilience to climate change, as well as to position itself for new opportunities. In order to manage risks associated with policy and legal developments and to inform our investments, Newcrest has adopted a protocol for applying shadow carbon prices of US$25/tonne and US$50/tonne CO2–e in the period to 2030 for jurisdictions where there are no regulated carbon prices. Using the two carbon prices will enable a range of sensitivities to carbon price be considered for specific projects.
Newcrest’s operating sites are vulnerable to physical climate impacts. As part of its risk management framework, Newcrest has identified risks that potentially relate to physical climate impacts, mainly at an operating site level.
Extreme weather events have the potential to damage infrastructure, disrupt operations and delay delivery of products to market. Newcrest is working with experts to better understand physical threats from climate change at its current and planned operating sites and to put in place adaptation plans to ensure that we have considered these risk factors in our design criteria for site operations and infrastructure.