Net Zero Commitment
Evolution supports the Paris Agreement and in FY21 announced a commitment to be Net Zero by 2050 (Scope 1 and 2 emissions only) and an interim target of reducing our emissions by 30% by 2030 (against a FY20 baseline).
Read more on our Net Zero commitment, targets, Net Zero decarbonisation approach and actions.
Evolution recognises climate change as a strategic risk with potential ﬁnancial implications for our business, our supply chain, our people and communities and our investors. It is one of the most pressing global issues facing our society and is a priority issue for our stakeholders. Our goal is to consider climate-related risks and opportunities and their short- and long-term implications in the evaluation of all parts of our operations.
Milestone commitments in addressing global issue of climate change for Evolution include:
Task Force on Climate-Related Financial Disclosures
Evolution recognises the recommendations of the TCFD, and importantly that our investments may be susceptible to future changes in climate. In FY21, we have aligned with the TCFD and our disclosures are presented with consideration to the interests of our stakeholders.
In FY22, we plan to fully align our approach with the recommendations of the TCFD framework including stress testing climate scenarios for our business and advance understanding and disclosures of climate-related financial impacts to the business. Clarifying the impact of climate related issues on our operations and taking measures against it will help make our business more sustainable and, through dialogues with investors, enhance our corporate value.
We integrate climate change considerations into our business strategy through strong governance and risk management that is supported by our Climate Risk Position Statement. We support the framework established by the Paris Agreement to avoid climate change and recognise our activities either directly or indirectly generate greenhouse gas (GHG) emissions.
Climate-related risks are actively reported, supported by FY21 targets established to reduce emissions and improve water security, prepare for extreme weather and health events (including pandemic, smoke impacts from fires and COVID-19 implications) and adopt responsible water management practices. Our Board is informed, via the Risk and Sustainability Committee, on progress against our climate risk targets on a quarterly basis. The Board approved our approach towards a Net Zero future.
Strengthening the link between Executive Remuneration and our Climate Targets
The Balanced Business Plan (BBP) is updated annually to define key goals, measures and targets for the year to deliver against agreed strategic objectives. The remuneration strategy for our short-term incentive payments (STIP) link to ESG elements that include safety,
sustainability, risk and people. Performance against our Net Zero future approach has been included in the FY22 STIP program, linked with the new 2030 and 2050 targets. The inclusion of ESG factors within the remuneration strategy reinforces the importance and focus on delivery against ESG by Evolution.
Strategy and Risk Management
In alignment with the TCFD framework Strategy and Risk Management pillars, Evolution considers short, medium, and long-term risks as noted below:
- Short-term: risks which may materialise in the current annual reporting period
- Medium-term: risks that may materialise over a 2-5-year timeframe
- Long-term: risks which may fundamentally impact the viability of our long-term business strategy and our legacy extending 5-10-20 years
To deliver long term value to stakeholders, climate related risk resilience has been built into our operational environment and communities through sound risk management practices across all areas in our business.
The climate-related physical risks and mitigation identified as applicable to our business are presented in the following table.
Reduced water availability with the potential for water security implications to the business plan.
Extreme weather events
Material damage to the receiving environment, assets and infrastructure; disruptions to operations and supply chains.
Energy and emissions
Footprint/demand creep Developing energy regulation, market demand for sustainably produced commodities and supplier surety.
The above mentioned risks and uncertainties outlined reflect risks that could materially affect our performance, future
prospects or reputation. Where risks are material to the Group, they are escalated to the Board Risk and Sustainability
Committee and, as appropriate, to the Board.
Climate-related opportunities to support local communities have also been identified. We have historically assisted
neighbours, local government, emergency services and communities during flood, drought and wildfire events.
Climate-related risks and opportunities have been included in our strategic planning integrated across our business. The
potential likelihood, severity, and materiality of these risks and opportunities to our operations and communities have been
proactively assessed and forecasted. They have informed the reporting requirements and targets outlined in:
- Site water and emergency management plans
- Inclement Weather and Cyclone Management Plan at Mt Carlton
- Severe Weather Management Plan at Mt Rawdon
- Detailed design of the Integrated Waste Landform at Cowal
Regular monitoring of water level depths during extreme weather conditions and the dissemination of cyclone awareness
training at Mt Carlton are examples of Evolution’s resilience methods to managing extreme weather events (or extreme
climate-related natural hazards).
Climate-related risks and opportunities have been included in our strategic planning integrated across our business. We
manage our physical climate risks through the Evolution risk management framework and in alignment with our Strategic
Planning Policy27 and TCFD. The potential likelihood, severity, and materiality of these risks and opportunities to our
operations and communities have been proactively assessed and forecasted.
All material risks and actions, including those related to climate change, are documented and kept current for managing
and reporting purposes. Our risk assessment process is firmly founded in site-specific exposures, including those related to
climate change such as wildfires, cyclones, floods, and landslides at a more regional level.
With respect to physical risks, our operations are located in very different climate regions. Evolution is actively managing
these risks and opportunities, improving energy efficiency, responsibly managing water use and preparing and managing for
extreme weather and health events.
Climate Risk Management Process
Whilst Evolution operations are currently not subject to mandatory carbon pricing for Scope 1 emissions, we acknowledge
global and national carbon price trends. Our operations are also subject to an environmental levy payment for Scope 2
To understand the potential financial risks, a robust direct (Scope 1) and indirect (Scope 2) accounting program has been
developed, including setting an emissions baseline. Using the baseline, we have conducted a CO2 abatement cost review
focussing on marginal abatement cost curves (MACC). Although our exposure to carbon price is lower than others in the
industry due to our lower emissions intensity, we are working on short and long-term plans to decarbonise our operations
by 2050. These includes plans to migrate to renewable energy sources and the consideration of renewable fuel, electric fleet
and hydrogen fuel adoption.
One of the ways we respond to transition risk such as the potential impact of climate change policies on our business is by
considering an internal price on carbon and the impacts of climate risk are evaluated as part of life of mine planning. In FY21,
we tested distinct price forecasts for Australia and Canada as part of our decarbonisation modelling.
Metrics and Targets
Specific targets have been captured in our annual Balanced Business Scorecard, including:
- 30% reduction in CO2-e by 2030 and Net Zero by 2050
- Year-on-year reduction in CO2-e per tonne material mined (FY20 as a baseline)
- Year-on-year reduction in freshwater demand (FY20 as a baseline)
- All operations complete 100% actions in emission reduction plans
Electric Mine Consortium