A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) signals increasing investor pressure on mining giants Rio Tinto and BHP to tackle their Scope 3 greenhouse gas (GHG) emissions. The report highlights the absence of measurable Scope 3 emissions reduction targets for both companies, emphasising the need for stronger environmental commitments. In the case of diversified miners producing iron ore and metallurgical coal, Scope 3 emissions are significantly larger than Scope 1 and 2 due to emissions-intensive steelmaking processes. IEEFA’s report assessed the emissions reduction objectives of five major mining companies: Rio Tinto, BHP, Fortescue, Vale, and Anglo American. While all five aim to achieve net zero by 2050 and have established shorter-term reduction targets, not all of them incorporate Scope 3 emissions in their objectives. “Rio Tinto and BHP have no measurable Scope 3 emissions reduction targets,” said Simon Nicholas, IEEFA’s Lead Analyst on Global Steel and author of the report, also raising concerns about Vale’s targets, suggesting they might fall short of investor expectations. “Investor pressure on Scope 3 emissions is growing,” added Nicholas. “Recently, companies including TotalEnergies, Woodside, Glencore, ExxonMobil and Chevron have been pressured by investors to do more on their Scope 3 emissions.” While some miners have cited the hard-to-abate nature of the steel industry as a reason for limited action on Scope 3 emissions, the transition away from coal-based steelmaking is gaining momentum. With the emergence of alternative technologies such as direct reduced iron, which eliminates the use of coal, it is becoming evident that suppliers of raw materials to the steel industry can no longer delay setting measurable Scope 3 emissions reduction targets.
— IEEFA Asia Pacific (@IEEFA_AsiaPac) October 11, 2023