“Fortescue supports the Paris Agreement’s long-term goal of limiting global temperature rise to well below 2 degrees above pre-industrial levels, and our emissions reduction targets align with this international objective,” Ms Gaines said. “Our success will be founded on practical initiatives that will allow us to deliver on our targets in an economically sustainable manner.”
Across the resources sector, much of the focus of ESG (environmental, social, governance) issues in recent years has centred on matters of climate change, as miners’ operations and the products they extract are significant sources of the world’s emissions.
But in the past fortnight, Australia’s major miners have been the subject of rising public and investor scrutiny for threats posed by mine expansions to significant Indigenous sites following Rio Tinto’s destruction of 46,000-year-old rock shelters in Western Australia’s Pilbara. Fortescue’s planned Queens mine expansion, to the east of Rio’s site, has a footprint covering more than 70 heritage sites, including rock shelters, campsites, rock paintings and engravings.
Fortescue’s strengthened emissions policies on Tuesday were described by climate-focused investor groups as progress in the right direction. Shareholder activist Market Forces, which last month gained the backing of one in three Rio Tinto shareholders in calling for Scope 3 targets, said Fortescue’s 2040 net-zero goal was an “important and welcome step”, but did not go far enough.
Fortescue, unlike many other miners, does not extract fossil fuels such as coal or gas. But Market Forces estimates its Scope 3 emissions generated by the use of iron ore in the carbon-heavy steelmaking process would account for at least 90 per cent of the emissions in Fortescue’s value chain.
“Fortescue needs to manage the financial risks posed by its exposure to the emissions-intensive steelmaking industry by setting clear strategies to reduce Scope 3 emissions,” the group’s Will van de Pol said.
“Fortescue targets which address less than 10 per cent of its value-chain emissions should not placate any investor that takes climate change seriously.”