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Climate Risk & Resilience

Climate risk and resilience

Addressing, avoiding, managing, mitigating and adapting to the impacts of climate change is a defining challenge of our time.

For Barrick, understanding the potential implications of climate change and ensuring we adapt and build resilience, while a significant strategic focus for us, is not enough.

We also know mining, including for gold and copper, has a critical role in building community resilience and delivering the resources needed for both a green and just transition.

Across all our sites we are working to reduce our carbon footprint, identify and adapt to the potential risks to our business, and build resilience within our host communities and countries.

All our governance, policies and procedures, including TCFD reporting, are detailed below in our Climate Management Approach.

Climate targets

We have set emissions reduction targets for the short, medium and long term. Our short term and interim target is to reduce our greenhouse gas (GHG) emissions by 15% against our 2018 baseline of 7,541kt CO2.

Over the medium term our target is to reduce our Scope 1 and 2 emissions by at least 30% by 2030 against the same baseline. Ultimately our long-term vision is to achieve Net-Zero emissions by 2050, while also maintaining a steady production profile.

More important than commitments or target accreditations, is that a reduction target is demonstratable and achievable. We believe that action is more important than lip service and that is why we published our continually reviewed and updated roadmap with allocated capital in our 2021 Sustainability Report

Performance

Our total emissions in 2022 were 6,705kt of CO2-e (scope 1 and 2: market based), a 6% reduction compared to 2021, and an 11% reduction against our 2018 baseline. 

Some of the factors behind this reduction are our investments in solar power in the US and Mali (see box), and our hydropower stations in DRC. Veladero (Argentina) also completed a $54 million power line to connect it to the electricity grid which is expected to reduce emissions at the site by 100,000 tonnes of CO2-e each year.

Despite this encouraging progress, it is important to note that we do not see emissions reduction as a straight downward line and we expect short-term spikes along the way, caused by, for example, expansion plans or the construction of new renewable power sources.

We also continued to progress our measurement and understanding of Scope 3 (value chain) emissions. In 2021 we took an initial basic assessment of this for our Tier one mines which determined that scope 3 emissions account for more than 40% of total emissions for these mines. We continued to evolve our understanding of this issue in 2022 based on a deeper methodology that includes both industry and company specific factors. This detailed understanding will enable us to determine a demonstratable Scope 3 reductions target and engagement plan by the end of 2023.

The urgency with which the world must transition to a low carbon economy is also an opportunity for Barrick. We know that mining for gold and copper has a critical role in delivering the resources needed for green technologies and with our expanding volume of copper extraction and other measures we are actively working to seize this opportunity.

Powering the future – the role of copper and gold

A bright outlook for solar in Nevada

The electricity needed to power the NGM complex comes from the Nevadan state grid, which is approximately 60% gas powered, and Barrick-owned power plants, which are coal fired.

Since 2019, we have been working to reduce our reliance on coal with a 200MW solar farm complete with battery storage. The project has a budget in excess of $260 million and is anticipated to meet 17% of NGM’s total energy requirements and reduce NGM’s GHG emissions by 256,000 tonnes each year. In 2022, we identified a partner, First Solar, to develop the project, secured the necessary construction permits, awarded contracts for construction materials and installation, and issued down payments to ensure delivery in the second quarter of 2023.  We also began work on site and hosted a ground-breaking ceremony to mark the official start of construction. The first energy production is anticipated by the second quarter of 2024.

NGM’s solar facility will use responsibly produced solar module technology designed and developed in the US through fair labor practices and furthering our contributions to the US economy. For further detail see our 2022 Sustainability Report.

 

Scope 3 Emissions Targets Set In Line With Sustainability Strategy

Barrick has set Scope 3 emissions reduction targets to advance its responsible energy transitioning program in line with its integrated and holistic approach to sustainability management.

Scope 3 emissions are those generated outside the company’s operational control, associated with upstream and downstream activities. Barrick has already established a Scope 1 and 2 reduction target of 30% by 2030 against a 2018 baseline for its own operations while maintaining a steady production profile, with the ultimate vision of achieving net zero by 2050.

Group sustainability executive Grant Beringer says effective Scope 3 action requires the combined efforts of producers, suppliers and customers and must be backed by short-, medium- and long-term implementation plans.

“As with Scope 1 and 2, we’ve set a clear Scope 3 roadmap, with targets that are achievable, measurable and based on science rather than wishful thinking. After extensive supplier engagement and data collection, we’ve developed category-level targets for emissions hotspots that have the greatest potential for action. These targets are both quantitative and qualitative. Qualitative targets, and the engagement that goes with them, are fundamental to progressing collective action and the evolution of data quality. As we improve our data quality, we will review and refine our targets and the actions being taken to achieve them. In line with our partnership model, we are also helping suppliers to build the necessary management capacity,” he says.

Barrick president and chief executive Mark Bristow says the company’s climate strategy was a key component of its sustainability strategy, which is linked to the objectives of the United Nations Sustainable Development Goals (SDGs).

“Mining is integral to the achievement of the SDGs and Barrick has long shown the way by making sustainability foundational to all our activities. This has included the early creation of detailed and demonstrable emissions reduction roadmaps, with allocated capital, designed to deliver tangible progress towards our targets,” he says.

These targets are both quantitative and qualitative and are focused on high emission areas in our value chain as outlined below:

Goods and Suppliers (Category 1):Categories as defined in the Greenhouse Gas Protocol’s Technical Guidance for Calculating Scope 3 Emissions. Achievement of Barrick’s Scope 3 targets will require collaboration with suppliers and customers in our value chain, which are outside of Barrick’s direct control.

  • Quantitative Target: 30% emissions reduction of “Tier 1” suppliers (those suppliers that collectively account for 5% of Barrick’s total spend in this category) by 2030 against a 2022 Scope 3 base year;
  • Qualitative Target: Incorporate 130 of our largest suppliers by spend into our annual outreach (this includes our Tier 1 suppliers as well as chemical and metal fabricator suppliers) and engagement;
  • 2025 Target: Collect high-quality data for 50% of Tier 1 and chemical and metal fabricator suppliers through engagement, and refine emissions reduction targets by 2025.

Fuels and Energy (Category 3):Categories as defined in the Greenhouse Gas Protocol’s Technical Guidance for Calculating Scope 3 Emissions. Achievement of Barrick’s Scope 3 targets will require collaboration with suppliers and customers in our value chain, which are outside of Barrick’s direct control.

  • Quantitative Target: 20% reduction against a 2022 Scope 3 base year by 2030;
  • Qualitative Targets:
    • Collaborate towards new technologies to reduce fleet emissions; and
    • Engage with host governments where we consume power from national grids for continued renewable energy incorporation.

Downstream Copper Processing (Category 10):Categories as defined in the Greenhouse Gas Protocol’s Technical Guidance for Calculating Scope 3 Emissions. Achievement of Barrick’s Scope 3 targets will require collaboration with suppliers and customers in our value chain, which are outside of Barrick’s direct control.

  • Qualitative Target: Outreach and engagement of all downstream customers and smelters;
  • 2025 Target: Set emissions reduction target, covering 75% of copper processing, by 2025.

Management approach: Climate risk & resilience

We recognize that climate change, including shifts in temperature, precipitation and more frequent severe weather events, affect our operations in a range of possible ways. We also know that no country or community is immune from the threat of climate change and the risk and consequences of severe drought, supercharged storms or blistering heat waves. But the consequences will be unevenly felt, with the poorest countries and peoples bearing the brunt of a problem not of their making. At the same time, we recognise the inextricable links between nature loss and climate change. A changing climate drives nature loss, and nature loss similarly accelerates climate change.

In line with our holistic and integrated approach to sustainability, our climate change strategy does not focus solely on the development of greenhouse gas (GHG) emissions reduction targets and ways to support the longevity our business.  Instead, it zooms out further and considers conservation of nature and biodiversity, water management and community resilience.  For example, our goals over the short and medium term seek to not only reduce our GHG emissions, but to also develop resilience to the physical impact of climate change in order to protect our assets and the communities in which we operate.

 
Climate Governance  (TCFD Governance a & b)

Reflecting the importance of climate change as a business and strategic matter, governance over climate-related risks and opportunities at Barrick is provided by the Board, management and at the site level.

 
Board (TCFD Governance a)

The Board is ultimately responsible for oversight of our climate strategy, performance, risks, vulnerabilities and opportunities. The Board is assisted in this regard by all of its Committees:

  • The ESG & Nominating Committee oversees our policies, programs, and performance relating to sustainability and the environment, including climate change, and this is built into Barrick’s formal risk management process. 
  • The Audit & Risk Committee assists the Board in overseeing the company’s management of enterprise risks, including climate risk, as well as the implementation of policies and standards for monitoring and mitigating such risks.
  • The Compensation Committee helps ensure that executive compensation is appropriately linked to our sustainability performance.

Our Group Sustainability Executive regularly presents on and discusses our Climate Strategy and approach to climate risk management with the Board and its Committees.  For example, during 2022, discussions were held with the Board regarding our scenario analyses and ongoing work to develop a Scope 3 emissions program, including efforts to improve the accuracy of our scope 3 estimations, and engaging with suppliers to understand their emissions management and reduction efforts.

Focus areas during 2022 were:

  • Long term business strategies were reviewed to understand their sustainability, and to ensure that the necessary financial and human resources are in place to meet those objectives;
  • Assessing and monitoring our risk management and internal control systems to ensure their effectiveness, including with respect to climate-related risks and opportunities; and,
  • Progressing our GHG emissions reduction initiatives.

 
Management (TCFD Governance b)

Chief Executive Officer, Executive Committee and Environment and Social Oversight Committee (E&S Committee)
At the management level, our President and Chief Executive Officer is the link between the Board and management and is accountable for the implementation of our policies and delivery of strategy, including for climate change related aspects. as the President and Chief Executive Officer also provides strategic oversight and governance on key decisions related to Barrick’s climate change strategy, including the setting of our GHG emissions reduction targets.  The President and CEO is supported by the Executive Committee, and guided by our Group Sustainability Executive.

Sustainability issues, including climate change, are a core reporting line on our weekly Executive Committee calls and are also agenda items at monthly management and quarterly E&S Committee meetings. Our E&S Committee is our most senior management-level body dedicated to sustainability.  It is Chaired by our President and CEO, and connects site-level ownership of sustainability to our Executive and our Board of Directors.  Members of the E&S Committee include:

  • Chief Operating Officers for each region;
  • The Group Sustainability Executive;
  • The General Managers for each mine;
  • Regional and site health, safety, environment and closure leads;
  • In-house legal counsel; and
  • An independent third-party sustainability expert.

Our Group Sustainability Executive is responsible for the development and implementation of our climate strategy, with support provided by other members of the management team as part of their day-to-day responsibilities.

Climate change aspects are also integrated into performance-related compensation for executives and senior leaders through our Sustainability Scorecard. In 2022, performance against our Sustainability Scorecard, including on our GHG emissions reductions targets, accounted for 25% of long-term incentive compensation for those senior leaders as part of the Barrick Partnership Plan.

Group Sustainability Executive
We have a dedicated Executive for Sustainability, who is responsible for driving implementation and adherence to our overarching sustainability strategy, including water, energy and climate aspects, as well as our sustainability reporting.

Focus areas in 2022 were:

  • Advancing our climate change scenario analysis and presenting the results to the Board;
  • Improving our climate-related disclosure in line with recommendations from the Task Force on Climate-related Financial Disclosures (TCFD);
  • Providing strategic and timely climate education and guidance to the Board;
  • Analysing opportunities for GHG emissions reductions and increased energy efficiency; and,
  • Evolving and progressing our Scope 3 emissions calculations and working with the Supply Chain team to engage with our suppliers.

Operations

In line with our philosophy of decision-making being driven by the operational sites, we have identified Climate Change Champions at each site. Our Climate Change Champions are responsible for driving energy and GHG emissions reduction programs at a site level, including sensitizing staff to the importance of energy efficiency, climate change and operational excellence, as well as providing guidance on tracking/reporting energy and climate-related data and helping to identify further GHG emissions reduction opportunities and projects.

 
Strategy (TCFD Strategy a & b)

We recognize that addressing and reducing the impacts of climate change is not a one-off effort, but requires continuous work as a company, as an industry and as part of broader society. We have a group level Climate Strategy approved by the Board and implement by Management. Barrick’s climate change strategy has three pillars: (1) identify, understand and mitigate the risks associated with climate change; (2) measure and reduce the Company’s impact on climate change; and (3) improve the Company’s disclosure on climate change.  The strategy is constantly reviewed and updated based on risks and opportunities realised.

The key objectives of our Climate Strategy are:

  • Identify, understand and mitigate the risks associated with climate change by building climate change resilience to limit exposure to increasing transition (such as changing legislation) and physical climate risks;
  • Maintain an updated GHG emissions baseline and reduction target according to our baseline and reduction target recalculation policy;
  • Continuously improve our disclosure on climate change to provide the market with annual Climate Strategy disclosures that are aligned with the TCFD framework, including disclosures that incorporate scenario analysis;
  • Switch to cleaner energy sources and increase the proportion of renewable energy in Barrick’s energy mix;
  • Shift responsibility for our progress to our GHG emissions reduction target to an individual site level and introduce Climate Change Champions at every site; and
  • Work with our communities to build resilience and ensure they are not left behind.

We are also lead members of the International Council on Mining and Metals Climate Working Group and helped drive that organization’s updated climate position statement.

Climate change has been identified as a key environmental risk for our business, particularly due to its impact on the availability of water, heat exposure and the related financial implications. Market requirements and expectations, and investor evaluations for good governance increasingly include information regarding GHG emissions and reduction programmes and strategies.  In addition, our ESG ratings may influence investors’ level of confidence in business and sustainability and could thereby influence the share price and market value.

Scenario Analysis

We continue to work to understand the impact of a changing climate on our business, and in particular, we are working on a prioritised basis to conduct scenario analyses for all our sites.  Undertaking scenario analyses allows us to better integrate climate risk into our strategic planning and risk management processes, and to identify opportunities to improve both the resilience of our business and our local communities.  The result of our scenario analyses are shared with the Executive Committee, the E&S Committee and the Board.

In line with the recommendations of the TCFD, our scenario analyses consider three different scenarios:

  • Speedy Net-Zero (SSP 1-2.6);
  • Slow and steady (SSP2-4.5); and
  • Fossil-fuelled world (SSP5-8.5).

There is a naturally inverse relationship between the physical risks to the business and the transition risks. The most extreme weather events are modelled and expected to occur under a Fossil-fueled world (SSP5-8.5), which pose significant physical risks to our business, but in a world where transition risks would have a lower financial consequence. Conversely, the faster the decarbonization, the greater the transition risk, but physical risks begin to reduce in probability and consequence.

The site-specific scenario analyses and modelled outcomes allow us to understand the robustness of our overall strategy under the various scenarios, as global influences will determine our future world. Implementing our strategy helps ensure our business is resilient and sustainable through all future scenarios.

The findings for the 2022 scenario analysis for both physical and transitional risks at two of our Tier One Assets, the Kibali gold mine in the DRC and the Loulo-Gounkoto complex in Mali, are summarized below.

  • Physical Risks: Across all scenarios, projections indicated that Kibali and Loulo-Gounkoto will be exposed to multiple climate hazards. Over the short term, changes to rainfall patterns present the most material risks to these operations. Over the medium to long term, the most material risk becomes energy supply.

Kibali:  Climate projections show more extreme rainfall events, wetter dry seasons on average, but also increased drought anomalies. The consequent physical risks include failure of the tailings storage facility (TSF) due to extreme rainfall events. At the same time, the mine’s hydropower stations and capacity is likely to be reduced as a result of increased droughts.

Loulo-Gounkoto:  Analyses show increased temperatures will impact the complex’s solar generation capacity through solar derating, while increased extreme rainfall events will lead to increased dewatering requirements.  Our scenario analysis also determined expected population growth at a regional level. Understanding how the population may change, and the potential environmental consequences from this and climate change, helps us determine where catchment-scale and indirect impacts to our business may lie.

  • Transition Risks: In terms of transition risks, analyses show carbon pricing is the most significant risk for both Loulo-Gounkoto and Kibali across all scenarios, although we believe the probability of this risk in developing economies to be low for the short term. To address this risk, we will continue to focus on reducing our overall GHG emissions, particularly those linked to diesel use. This will help to reduce our exposure to fuel price fluctuations and the associated carbon pricing risks.

The knowledge and insights we gain from conducting scenario analyses helps us to identify, understand and act to manage the vulnerabilities of our business, as well as potential opportunities to capitalise on. Based on scenario analyses conducted to date, we believe Barrick’s strategy is moderate to very resilient. For example, our Roadmap to Net-Zero not only reduces GHG emissions, but also helps to manage and mitigate the risk of carbon taxes under a 2 degree or lower scenario.  Our Fossil-fuelled scenario has enabled us to identify physical risks early, and we are now working to take action to manage, address and mitigate these risks.

We also use the results of our scenario analyses to guide and inform how we work with our host governments and communities to help build future community resilience to climate change, which consequently strengthens business resilience. We are working to mitigate and manage the risks we have identified, and further details in this regard will be provided next year in our 2023 Sustainability Report.

 
Risk Management (TCFD Risk Management, a, b, and c).

Climate change-related factors are incorporated into our formal risk assessment process. For example, when assessing site-specific weather-related risks, we also consider availability and access to water, the impact of increased precipitation, drought and severe storms on operations, as well as the potential impacts of our use on communities near our operations.  

Our assessment of Barrick’s vulnerability to climate change is based on climate-related risk categories (including: acute physical risk; chronic physical risk; financial risk; reputational risk; legal risk; and climate change opportunities), exposures, sensitivities, potential impacts and adaptive capabilities.

We use estimation criteria to assess vulnerability.  This includes the extent of the risk / vulnerability, duration of the risk, intensity of the impact of the risk, and likelihood of the impact.  This is integrated into our Site level  and Group Risk Registers, which are reviewed and updated quarterly by site and regional risk teams. Review and aggregation is overseen by our Senior Vice-President, Business Assurance, Risk and Business Integrity, and the Group register and risk materials are reviewed by our Executive Committee prior to presentation to the Board’s Audit & Risk Committee.

Short term

0 –  5 years

Medium term

5 – 10 years

Long term

10 – 15 years

Through this process, we have identified several climate-related risks and opportunities for our business: physical impacts of climate change, such as an increase in extended duration extreme precipitation events; an increase in regulations that seek to address climate change; and an increase in global investment in innovation and low carbon technologies.

Short Term Risks

Short-term risks include: volatile climatic conditions that can affect the stability and effectiveness of infrastructure and equipment; and extreme weather events that can impact environmental protection and site closure practices. Barrick’s short-term strategy to manage these risks focuses primarily on energy use and climate change, including to improve energy efficiency and supply mix to increase the use of alternative clean and renewable energy sources, and to adopt and implement emission reduction measures or energy efficient reduction technologies as they became practicable. This strategy also includes using hydro and solar power, switching Heavy Fuel Oil (HFO) fired power plants to cleaner alternatives such as gas, implementing battery power technology into grids to provide spinning reserve, and using sensors in underground areas to shut down power to unmanned areas. We continued to focus on localizing our supply chains, not only to maximise the shared benefits of our operations, but to also de-risk components of the value chain that may be susceptible to climate change impacts. 

Medium Term Risks

Medium-term risks include: continuous volatile climatic conditions that can affect the stability and effectiveness of infrastructure and equipment; extreme weather events that can impact environmental protection and site closure practices; changes in the regulatory environment, including increased carbon tax regimes; and future challenges related to the stability and cost of water as well as energy supply. Over the medium-term, Barrick’s strategy is to continue to investigate and implement new clean energy projects and technologies, and to work to identify opportunities for improvement.

Long Term Risks

Long term risks include: physical impacts of climate change, such as an increase in extended duration extreme precipitation events; an increase in regulations that seek to address climate change, including increased carbon tax regimes; and future challenges related to the stability and cost of water as well as energy supply.

 
Metrics and Targets (TCFD Metrics and Targets a, b, and c).

We set annual objectives and targets (KPIs) for each site. These KPIs address the climate-related risks and opportunities we identify through our risk assessment and climate change scenario analysis processes, and feed into our overall group objectives and targets.   Each site records and reports data on a monthly basis to regional leads and the Group Sustainability Executive.  This data is then aggregated by region and presented on a quarterly basis to the E&S Committee, with progress reported to the Board each quarter. 

Our key metrics are:

  • Absolute Scope 1 (direct), 2 (indirect) and 3 (value chain) emissions;
  • Scope 1 and 2 emissions intensity per tonne of material processed;
  • Total energy use; and
  • Energy use per tonne of material processed.

These metrics are reported in our annual Sustainability Report, and in our quarterly reports.  

Targets

We have also set Group-wide GHG emissions reduction targets for the short, medium and long term:

Short term

Reduce our GHG emissions by 15% against our 2018 baseline of 7,541kt carbon dioxide equivalent (CO2e).

Medium term

Reduce our Scope 1 and 2 emissions by at least 30% by 2030 against the same baseline.

Long term

Achieve Net-Zero emissions by 2050, while also maintaining a steady production profile.

Our Roadmap to Net-Zero summarizes the projects we have implemented, are implementing, or are investigating to drive our GHG emissions to Net Zero by 2050.  This roadmap is regularly updated based on available technologies, identified risks, the results of our scenario analyses and changes to market, legislative or societal expectations. 

The roadmap is published in our Sustainability Report.

Roadmap to Net Zero
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