Climate change

Since our inception, we have transformed our portfolio towards minerals and metals critical to the world's energy transition. We have exited lower-returning businesses and increased our exposure to future-facing base metals like copper and zinc, while also increasing our aluminium production capacity to meet growing demand.  

As we continue to position our portfolio for the future, we remain focused on progressing construction of Hermosa’s Taylor zinc-lead-silver project and advancing our pipeline of base metals development options and exploration projects. 

We also continue to test our portfolio resilience, using transition risk scenario analysis to stress test how different market and policy environments may affect our portfolio across a range of plausible climate futures. This approach enables us to identify risks and opportunities, assess strategy and business model resilience, and inform mitigation actions, strategic planning and investment decisions. 

Production by commodity (CuEq, %)

We have set a target to halve our net operational emissions by FY35 from FY21 levels and have a long-term goal to achieve net zero emissions across all scopes (i.e. Scopes 1, 2 and 3) by 2050. Beyond delivering on these commitments, we are focused on reducing our emissions to mitigate transition risk, protect value and support continued portfolio resilience

Our approach focuses on our highest-emitting operations: 

• Hillside and Mozal Aluminium: Pursue multi-stakeholder collaboration to establish or maintain an affordable, low-carbon electricity solution. 
• Worsley Alumina: Progress fuel switching as an interim step, while advancing our steam electrification study with support from the Australian Renewable Energy Agency (ARENA). 

We will continue to explore novel technology pathways and collaborate with others to study, develop and scale solutions. 

The Scope 3 component of our goal to achieve net zero emissions by 2050 recognises our responsibility to contribute to the reduction of value chain emissions.

Our portfolio transformation has lowered our Scope 3 emissions substantially, reducing our exposure to emissions from the combustion of energy coal and hard-to-abate emissions from the use of metallurgical coal in the steelmaking process. 

Our Scope 3 approach focuses on engaging with our key suppliers and customers to align ambitions, support data improvements and knowledge sharing, and identify strategic collaborations. We also support the International Maritime Organisation’s goal of net-zero greenhouse gas emissions from international shipping by or around 2050. 

We have continued to enhance our approach to identifying and managing our exposure to potential physical impacts of climate change.

• Enhancing weather and climate forecasting
• Integrating physical risk insights into our insurance programs
• Embedding adaptation into key business processes
• Sharing climate risk insights to help strengthen community resilience
• Incorporating climate-related skills and expertise into our risk management processes

Robust climate governance and transparent reporting ensure accountability and drive continuous improvement

Climate change is a material strategic and governance issue for South32 that is overseen by our Board with the support of its standing Committees. Our CCAP 2025, which is approved by our Board, will be the subject of a non-binding advisory shareholder vote at our 2025 Annual General Meeting.

We are committed to providing clear and meaningful disclosures and transparently reporting our sustainability performance, including in relation to how we are addressing climate change. 

By assessing climate-related risks alongside other business risks, we can assess their relative significance and develop responses in the context of the Group as a whole.

Our Climate-related Risk and Reporting Methodology outlines our approach to identifying, assessing and managing climate-related risks and opportunities, and describes the boundaries, methodologies, assumptions and key references used in the preparation of our greenhouse gas (GHG) emissions, energy reporting, and other climate-related disclosures.

1. Paris Agreement: We support the goals of the Paris Agreement which underpin government efforts to limit global temperature rise to well below 2°C this century and to pursue efforts to limit the increase to 1.5°C, and guide our approach to addressing climate change.
2. Decarbonisation: Avoidance and mitigation through direct abatement should be prioritised over the use of carbon credits to offset emissions.
3. Just transition: Action to address climate change should consider socioeconomic impacts, risks and opportunities to help mitigate potential adverse effects on people and communities.
4. Carbon pricing:  Carbon pricing is an effective policy instrument for countries to drive emission reduction and incentivise decarbonisation innovation and investment. Where implemented, globally recognised methodologies for emissions accounting, such as the GHG protocol, should be applied. Carbon tariffs can help countries to address carbon leakage and protect the competitiveness of domestic industries. Where implemented, they should incorporate fairness and equity principles to avoid unintended adverse consequences for nations with emerging and developing economies.
5. Public policy: Policy responses should:

• Balance emissions reduction with affordable access to reliable energy and stable energy supply;
•  Incentivise investment in, and the production and consumption of, low-carbon products; and
• Facilitate production of minerals and metals essential for the energy transition while maintaining robust environmental, social and governance standards.

6. Energy coal and natural gas: Decarbonising energy intensive industries will require access to large-scale, reliable and affordable low-carbon energy. We recognise that natural gas is likely to remain part of the energy mix for some time — particularly in jurisdictions where scalable, reliable and affordable low-carbon energy alternatives are not yet readily available and for industrial processes where proven or scalable alternatives have yet to emerge.
   
   We do not support advocacy for new natural gas or energy coal projects where scalable, reliable and affordable low-carbon energy alternatives are readily available and, in the case of new natural gas projects, where the role of natural gas as a transitional fuel on the pathway to net zero by 2050 is not recognised.

7. Disclosure and transparency: We support efforts to harmonise sustainability standards and frameworks, and enhance sustainability-related financial disclosures. We commit to transparently report our sustainability performance through clear, meaningful disclosures that build stakeholder trust and drive continuous improvement.

Since 2019, we have annually reviewed alignment of our Climate change positions with policy and advocacy undertaken by select industry associations we are a member of. Learn more here.