sri rating agencies webinar - glencoredd35c2e8-3264-42cf-a83f-e1fbd8… · 2018-05-09 · overview...

SRI rating agencies webinar09 May 2018

This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as “outlook”, "plans", "expects" or "does not expect", "is expected", "continues", "assumes", "is subject to", "budget", "scheduled", "estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "anticipates" or "does not anticipate", or "believes", or variations of such words or comparable terminology and phrases or statements that certain actions, events or results "may", "could", "should", “shall”, "would", "might" or "will" be taken, occuror be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements are not based on historical facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events, results of operations, prospects, financial condition and discussions of strategy.

By their nature, forward looking statements involve known and unknown risks and uncertainties, many of which are beyond Glencore’s control. Forward looking statements are not guarantees of future performance and may and often do differ materially from actual results. Important factors that could cause these uncertainties include, but are not limited to, those discussed in Glencore’s Annual Report 2017.

Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. You are cautioned not to place undue reliance on these forward-looking statements which only speak as of the date of this document. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Listing Requirements of the Johannesburg Stock Exchange Limited), Glencore is not under any obligation and Glencore and its affiliates expressly disclaim any intention, obligation or undertakingto update or revise any forward looking statements, whether as a result of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to itsdate.

No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Glencore share for the current or future financial years would necessarily match or exceed the historical published earnings per Glencore share.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities. The making of this document does not constitute a recommendation regarding any securities.

The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

Important notice concerning this document including forward looking statements 1

2018 Glencore SRI rating agencies webinar

Glencore at a glance


3Our business model

Revenue Adjusted EBITDA Adjusted EBIT

2016 2017


4

Key facts and figures• Leading integrated producer and marketer of commodities, with worldwide

activities in the production, refinement, processing, third party procurement, storage and transport of those products

• More than 90 offices in over 50 countries; operations comprise around 150 mining and metallurgical sites, oil production assets, farms and agricultural facilities. We employ approximately 146,000 people, including contractors

• Listed on London and Johannesburg Stock Exchanges• Current rating BBB (Positive) / Baa2 (Positive)

Glencore at a glance

Key financials ($M) Key competitive strengths• Scale and commodity diversity• Unique business model, fully-integrated along the supply chain • Ability to respond to changing industry dynamics• Core competence in commodity marketing, logistics, risk management and

financing• Leading industrial asset portfolio of diversified operations with strong growth

prospects• Diversified position across multiple commodities, suppliers and customers• World-class management team, entrepreneurial culture and track record of value

creation

177,351

221,379

10,268

14,762

3,930

8,552

Copper Coal Grains, Oils, OilseedsCobalt Oil Sugar, Cotton, PulsesNickelZinc/LeadFerroalloysAluminiumIron Ore

Metals & Minerals

Energy Agriculture


5Where we operate

Governance and HSEC leadership

• The Glencore Board comprises seven non-executive directors (NED), including the Chairman, together with the CEO

• It is made up of recognised business leaders, with diversity of background, nationality and experience• The Board has oversight of risk management• The Board HSEC Committee:

• Membership: Peter Coates (Committee chair and NED), Ivan Glasenberg (CEO), Tony Hayward (Chairman) and Patrice Merrin (NED)

• Its objective is to oversee Glencore’s ongoing improvements in HSEC performance• Provides leadership on main sustainability issues, such as:

• Reviews every fatality• Safety and catastrophic risks• Assurance programme• Climate change policy

• The Board HSEC Committee undertakes visits to operations

Governance 7


2017 performance• 31,737 employees and contractors (2016: 29,569)

completed e-Learning training on our Code of Conduct

• 22,872 employees completed training on anti-corruption

• Active members of the Partnering Against Corruption Initiative and the Maritime Anti-Corruption Network

Culture of ethical behaviour and compliance driven via:• Group policy framework• Audit Committee and (Executive) Business

Ethics Committee• Training and awareness • Monitoring• Anti-bribery and corruption initiatives• Sanctions programme• Prevention of facilitation of tax evasion• Reporting misconduct

Compliance 8


• Oversight and responsibility for sustainable development rests with the HSEC Board Committee

• Its main responsibilities are to:◦ Ensure appropriate Group policies are developed

in line with our Values and Code of Conduct for the identification and management of current and emerging health, safety, environmental and community risks

◦ Ensure policies are effectively communicated internally and appropriate operational processes and procedures are developed to comply with these policies

◦ Evaluate the effectiveness of policy implementation and HSEC risk management

◦ Evaluate and oversee the quality and integrity of any reporting to external stakeholders concerning HSEC matters

Our strategic approach 9


Material topics

2017 performance against our 2015-20 strategic priorities 11

HSEC pillar Strategic priority Strategic priority Strategic priority

Safety No fatalities x 50% reduction of Group LTIFR by the end of 2020, against 2015 baseline of 1.341

50% reduction in TRIFR by 2020 using 2014 baseline of 5.021

Health Year-on-year reduction in the number of new cases of occupational diseases

Environment No major or catastrophic environmental incidents

5% (minimum) carbon emission intensity reduction on 2016 baseline by 2020

High water risk assets toimplement five-year water targets for 2017–21

Community and Human rights

Implement our social value creation strategy

Distribute CommunityLeadership Programme Toolkit to all assets

No serious humanrights incidents

Product stewardship

Ongoing engagement with organisations and interestedStakeholders on responsible sourcing

achieved X not achieved ongoing1 Baseline figures include Glencore Agriculture


2017 performance:• Zero major or catastrophic environmental

incidents • Identification of technology as a solution to

support behavioural change• Developing a site-specific knowledge base of

critical controls • Building our knowledge of process safety

management application opportunities• Working with peers to present a common

industry approach to reducing health and safety risks from operating and maintaining mobile mining equipment through engagement with equipment manufacturers

Overview We recognise the exceptional nature of catastrophic events; our Catastrophic and Fatal Hazard Management Policy details our approach to their management, based on critical control management with rigorous monitoring and reporting. We require catastrophic and fatal hazards controls to be in place and regularly reviewed. Our approach reflects international leading practice and ICMM guidance.

12Catastrophic hazard management


2017 performance:• Nine fatalities (three employees, six

contractors)• 27% year-on-year decrease in lost time injury

frequency rate (LTIFR) per million hours worked (2017: 1.02)

• 24% year-on-year decrease in total recordable injury frequency rate (TRIFR) per million hours worked (2017: 3.09)

• 368 high potential risk incidents reported• 48% year-on-year decrease in new cases of

occupational diseases (2017: 46)• 65% reduction in fatalities compared to 2013

baseline (2017: 9)• 46% LTIFR improvement and 62% TRIFR

improvement against 2013 performance

Overview The health and safety of our people is our top priority and we believe that all fatalities, injuries and occupational diseases are preventable. Through strong safety leadership, we can create and maintain safe workplaces for all our people. Risk management is at the heart of our approach. We let our people know that we expect every individual, both employees and contractors, to take responsibility for their own safety and for that of their colleagues and the communities in which they work.

13Workplace health and safety


2017 performance :• 21.6 million tonnes CO2e Scope 1 carbon

emissions • 11.9 million tonnes CO2 Scope 2 carbon

emissions • 281 million tonnes CO2e Scope 3 emissions

(indirect GHG emissions throughout our supply chain); 273 million tonnes CO2e related to clients’ usage of fossil fuels

• Established an initial Group-wide carbon emission intensity reduction target of at least 5% on 2016 levels by 2020

Overview We openly and transparently disclose our energy and carbon emissions footprint. Energy is a key input, business cost and source of carbon emissions. We are continually looking to improve our energy and operational efficiency. We revise our carbon scenarios against energy market projections developed by leading organisations. We participate in a wide range of public policy discussions on carbon and energy. We are investing in a range of emission reduction projects and initiatives for both our operations and products.

14Climate change


Carbon capture and storage:Glencore’s wholly owned subsidiary, Carbon Transport and Storage Corporation Pty Ltd, is delivering an integrated carbon capture storage (CCS) project that incorporates capture at a coal power station, transportation and sequestration to establish a basis for permitting of long-term CO2 storage in a suitable location in Queensland, Australia. This study will provide a scalable model to deliver a viable commercial approach to reducing CO2

emissions.

External reporting and assessment: • We support the Task Force on Climate-related

Financial Disclosure’s guidance and have started to implement it in our annual reporting

• Awarded a ‘Level Four – Strategic Assessment’ (highest level) by the Transition Pathways Initiative

15Climate change continued


2017 performance:• 924 million m3 of water withdrawn• Ongoing implementation of our strategic

water management framework• Water management guideline finalised• Harmonisation of water reporting and

alignment with the Water Accounting Framework of the Minerals Council of Australia

• 19 water-related complaints at 11 of our assets (2016: 73 complaints at 10 sites)

Overview We seek to understand our effect on the environment, minimise our water-related impacts and ensure that our activities do not compromise any shared use of water. We are committed to ensuring good water management is in place at all our assets, including, where required, appropriate risk assessments, monitoring and implementation of corrective action. Our assets consult their host communities and other relevant local water users to find out their priorities and collaborate on solutions.

16Water and effluents


2017 performance:• 2,129 million tonnes of hazardous and non-

hazardous mineral waste generated• 358 thousand tonnes of sulphur dioxide

emissions• Rollout and implementation of a tailings

management protocol

Overview We work to minimise our direct and indirect impacts on the environment, complying with or exceeding relevant regulation and always looking for ways to improve our performance, including reusing as much waste as possible. Our tailings storage facilities undergo regular inspections in line with the stringent regulations relating to their management. We work to minimise all types of emissions from our stacks, mining operations and processing facilities. We use abatement systems for our air emissions to meet the applicable thresholds. values.

17Waste and air emissions


2017 performance:• Training on the Voluntary Principles

undertaken in Chad, Colombia, the DRC and Peru

• Asset-level self-assessments undertaken on our Human Rights Policy and grievance mechanisms guidance

• We continue to learn through our grievance mechanisms on how to better minimise and mitigate our impact on local communities

• Publication of our first Modern Slavery Statement

Overview It is essential that we uphold and respect the human rights of our people and our local communities. Our Code of Conduct and Human Rights Policy commit us to the Universal Declaration of Human Rights, the UN’s Guiding Principles, the UN Global Compact and ILO core conventions. We also seek to apply the Voluntary Principles on Security and Human Rights, IFC’s Standard 5 and ICMM’s position statement on Free and Prior Informed Consent. We have established mechanisms that allow our local stakeholders to express their concerns.

18Human rights and grievance mechanisms


2017 performance:• $4 billion paid in taxes and royalties• $90 million spent on community

development• Continued rollout of the Community

Leadership Programme• Ongoing engagement with a broad range of

NGOs

Overview Our operations have a significant effect on the communities in which we work, and on society as a whole. It is our responsibility to minimise any negative impact and to support sustainable development and growth. Through proactive, strategic stakeholder and community engagement, we can support the advancement of the interests of both our host communities and our assets.

19Community engagement and social commitment compliance


2017 performance:• Ongoing engagement with organisations

regarding responsible sourcing • Established a working group to support our

understanding of the proposed LBMA silver guidance and to provide detailed feedback during the consultation process

• We continued our active participation on the Technical Advisory Committee of Better Coal

Overview We work with experts, industry consortia and our peers to study the properties and impacts of our products throughout their lifecycles to spread understanding of our products. Through building a thorough understanding of our products’ properties, we are best able to produce, transport and store them safely and mitigate potential adverse impacts on our workers’ health and environment. We engage with a broad range of stakeholders, including civil society, governments, industrial partners and our customers, to promote responsible commodity sourcing.

20Product stewardship


2017 performance:• 14% of the workforce are female and 17% of

managers are female• 9% global turnover of our employees• External recognition for our training

programmes • Ongoing group-wide efforts to attract a

diverse workforce

Overview We believe that diversity is essential to our business and prohibit discrimination on any basis. We do not tolerate any form of racial, sexual or workplace harassment. We protect and uphold fundamental human rights around the Group, with fairness, dignity and respect. We uphold the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. We recognise and uphold our people’s rights to a safe workplace, freedom of association, collective representation, just compensation, job security and development opportunities.

21Our people


2017 Sustainability Report 2017 Sustainability Highlights

Our Approach to Sustainability 2017 Climate Change Considerations for our Business

2017 Databook and GRI References 2017 Payments to Government Report

2017 Modern Slavery Statement

22Further information: www.glencore.com/sustainability/reports-and-presentations


http://www.glencore.com/sustainability/reports-and-presentations

Appendix

• Annual and sustainability reports◦ Performance and progress during 2017 on our material topics◦ Financial Stability Board’s Task Force on Climate-related Financial Disclosures

• GRI Databook◦ Disclosure of data in line with Global Reporting Initiative (GRI) requirements; mapped against UN

Global Compact and International Council on Mining and Metals (ICMM) principles• Our approach to sustainability◦ Detailed information on our approach to sustainability-related topics

• Climate Change Considerations for our Business ◦ Analysis of the robustness of our portfolio against climate-related scenarios and provides an

assessment of the risks and opportunities available to Glencore in a low-carbon economy• Modern Slavery Statement• Annual Payments to Government Report

24Key information channels – documents


• Website◦ Information on our material topics www.glencore.com/sustainability/◦ Climate change www.glencore.com/sustainability/climate-change◦ Modern Slavery Statement www.glencore.com◦ Payments to Government report www.glencore.com/sustainability/reports-and-presentations ◦ UK gender pay gap www.glencore.com/sustainability/our-people

• Case studies and topical information:@Glencorefacebook.com/GlencoreGlencoreplcwww.youtube/glencorevideos

25Key information channels - online


http://www.glencore.com/sustainability/

http://www.glencore.com/sustainability/climate-change

http://www.glencore.com/

http://www.glencore.com/sustainability/reports-and-presentations

http://www.glencore.com/sustainability/our-people

HSEC KPIs: HEALTH & SAFETY 26

KPI 20151 20161 2017

Fatalities - total 10 16 9

- Fatalities - employees 7 11 3

- Fatalities - contractors 3 5 6

Fatal injury frequency rate (FIFR)2 0.025 0.049 0.028

Total recordable injury frequency rate (TRIFR)2 4.35 4.05 3.09

Lost time injury frequency rate (LTIFR)2 1.34 1.40 1.02

Occupational diseases frequency rate (ODR)2 0.32 0.27 0.14

1. 2015 and 2016 data includes Glencore Agriculture2. per million hours worked


HSEC KPIs: GHG EMISSIONS 27

KPI 20151 20161 2017

Scope 1 + Scope 2 Location based (1,000 tonnes CO2)

37,285 35,268 33,458

- Scope 1 (1,000 tonnes CO2e) 23,013 23,109 21,556

- Scope 2 location based (1,000 tonnes CO2) 14,271 12,159 11,901

Scope 32 (1,000 tonnes CO2e) 311,813 292,721 280,621

1. 2015 and 2016 data includes Glencore Agriculture 2. This includes, among others, CO2 emissions from the the use of saleable coal and oil, produced by Glencore entities, marine fuel for time-chartered shipping, and transmission and distribution losses relating to purchased electricity


HSEC KPIs: WATER 28

KPI 20151 20161 2017

Total water withdrawal (million m3) 954 971 924

- Surface water (million m3) 244 190 178

- Sea water (million m3) 166 162 160

- Groundwater (million m3) 227 276 291

- Rainwater (million m3) 126 281 197

- Potable water (million m3) 24 19 19

- Other water from third parties (million m3) 37 45 80

- Other sources (million m3) 130 - -

Total volume of water recycled and reused (million m3)

597 515 496

Percentage of water recycled and reused2 38% 35% 35%

1. 2015 and 2016 data includes Glencore Agriculture 2. Percentage = water recycled + water reused divided by water recycled + water reused + total water withdrawal


HSEC KPIs: ENERGY 29

KPI 20151 20161 2017

Direct energy (PJ) 127 131 115

- Coal (% of total) 11% 15% 17%

- Natural gas & coal seam gas (% of total) 13% 13% 11%

- Mineral oil (% of total) 57% 52% 62%

- Renewable (hydropower etc) (% of total) 17% 19% 9%

- Other sources (% of total) 1% 1% 1%

Purchased electricity (PJ) 108 90 87

– Non-renewable energy (%) 80% 80% 81%

– Renewable energy (%) 20% 20% 19%

Renewable energy percentage of total energy usage

19% 19% 14%

1. 2015 and 2016 data includes Glencore Agriculture


HSEC KPIs: OTHER ENVIRONMENT 30

KPI 20151 20161 2017

Total particulates (tonnes) 9,967 9,279 9,550

NOx (tonnes) 67,517 67,090 67,641

SOx (tonnes) 366,352 401,535 357,723

Total mineral waste (million tonnes) 2,111 2,025 2,129

- Hazardous mineral waste (million tonnes) 214 196 228

- Non-hazardous mineral waste (million tonnes) 1,897 1,829 1,901

Percentage of secondary materials and recyclable wastes ie scrap

-% 0.2% 0.3%

Number of significant spills 0 1 2

Monetary value of environmental fines ($) 231,643 364,630 297,279



HSEC KPIs: PEOPLE 31

KPI 20151 20161 2017

Total workforce 156,468 154,832 145,977

- Total employees 100,614 95,958 83,679

- Total contractors 55,854 58,874 62,298

Percentage of employees that are female 16% 17% 14%

Percentage of managers that are female 18% 19% 17%

Female members of the Board of Directors 1 1 2

Percentage of redundancies 19% 10% 9%

Percentage of employees covered by collective bargaining agreements

73% 74% 76%

Average hours of training per worker (employees and contractors)

53 60 57



HSEC KPIs: SOCIAL 32

KPI 20151 20161 2017

Total payments to governments($ million)

4,507 3,963 4,113

Total community investments ($ million) 94 84 90

Percentage of total spend with local suppliers2 38% 73% 76%

Number of strikes exceeding one week’s duration 10 1 18

Number of lock-outs exceeding one week’s duration

1 1 3

Total number of community complaints 1,741 963 1,063

1. 2015 and 2016 data includes Glencore Agriculture2. In 2016, the definition of ‘local’ was changed to mean suppliers and contractors local to the country in which the procuring asset operates. In previous years, some assets applied a more narrow definition, based on a 30km range around the procuring asset


sri rating agencies webinar - glencoredd35c2e8-3264-42cf-a83f-e1fbd8… · 2018-05-09 · overview...

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