IGO SUSTAINABILITY REPORT 2022— 69 68 —IGO SUSTAINABILITY REPORT 2022 Our Response to Climate Change Climate Governance Climate change is a material and strategic priority for IGO and is therefore part of ongoing discussions and analysis at the most senior levels of management and the Board. Climate change is routinely incorporated into Board discussions, strategy meetings, investment decisions, risk management oversight and monitoring, performance targets and executive remuneration. The Board approves our overall strategy and climate change policy and is ultimately responsible for IGO’s climate change management. We have well established structures and processes to ensure we operate with integrity and conduct business in accordance with our values. IGO’s value ‘See Beyond’ drives our commitment to addressing climate change – we know that our actions today will impact the world of tomorrow. Ethical corporate governance and risk management are key enablers to optimising our climate resilience and deliver on our climate change strategy. The Board’s Sustainability Committee oversees and monitors IGO’s risk framework and management systems in relation to sustainability areas and has a number of associated responsibilities, including regularly reviewing climate change risks, business critical risks and ensuring that new and emerging risks are dealt with adequately. The Committee Charter explicitly requires climate change-related risks to be incorporated into this process and routinely discussed at Committee meetings. The Sustainability Committee met four times in FY22, with key Board engagement on climate change summarised in the box below. IGO’s ELT routinely considers climate change driven market and technology developments as driven by IGO’s strategic aspiration to become a globally relevant supplier of products critical to clean energy storage and renewable energy. IGO’s Chief Operating Officer holds core accountability for strategic leadership and governance of sustainability related matters, including climate change. In FY22, performance against the delivery of our strategy on climate change was explicitly included in IGO’s Executive Remuneration Plan. Sustainability formed 20% of the ELT Key Performance Indicators (KPIs) for FY22, of which 5% was linked to delivery of our decarbonisation plan as part of the Company’s ShortTerm Incentive Program (STIP). Non-financial measures related to growth of our business and strategy are also included (40% of short-term incentive); these measures inherently include clean-energy drivers linked to climate change as embedded in our business strategy. The Board regularly engages with our relevant stakeholders to seek their feedback on the alignment of remuneration structures and outcomes. In FY22, we received positive feedback on the incorporation of decarbonisation metrics into IGO’s LTIP performance measures. For FY23, the Board has approved a 10% weighting on the delivery of IGO’s decarbonisation strategy as a key performance measure in the LTIP. Board Engagement on Climate Change in FY22 Climate change, clean energy strategy and the decarbonisation of our total carbon footprint are routinely part of the Board and Sustainability Committee agenda and discussions. The Board: • has endorsed the Western Areas transaction, driven by our strategy to become a globally relevant supplier of metals-based products that are critical for the clean energy transition and a net zero future • People, Performance & Culture Committee has strengthened the link between executive remuneration and delivery of our climate change strategy by approving changes to the LTIP performance measures for FY22, with climate change response progress contributing 10% to the LTIP • has strategy discussions on short and long-term climate change response, roadmap, opportunities, risks and megatrends • Chair, Company Secretary & Head of Corporate Affairs and the Head of People & Culture participated in an ESG Roadshow, where they spoke with investors and shareholders about IGO’s ESG management and progress, including our climate change response • has approved IGO’s disclosure inline with the TCFD for FY22 • approved the internal carbon price and decarbonisation fund allocation; and • approved IGO’s offset strategy and the procurement of offsets to complement our response to climate change and carbon neutral aspirations. Elements of our Governance on Climate Change are outlined below: Area Description Our Culture and Our Purpose Climate change and decarbonisation of society is central to our purpose. This is how we believe we are Making a Difference CEO / Chair Statement CEO / Chair Message in the Sustainability Report on climate change Climate Change Policy IGO has a Climate Change Policy guiding the management of emissions and climate change Board Sustainability Committee Climate change is treated as a board-level governance issue through the Sustainability Committee. This includes a review of climate change-related risk, approval of our decarbonisation strategy and quarterly update of programs of work Executive Leadership Team The ELT routinely considers climate-change-driven market and technologies aligned to strategy. IGO’s Chief Operating Officer currently holds core accountability for the strategic leadership of climate change and decarbonisation performance Remuneration Climate change and decarbonisation KPIs form part of the business STIP and LTIP Risk Management Our operations, infrastructure, communities and broader value chains are exposed to the impacts of extreme weather events associated with climate change, as evidenced by events such as drought, flooding, heat waves and fires that are occurring globally. Managing physical climate change risk through risk-based adaptation practices is essential to enhance the resilience of assets and communities. Climate change risks are integrated into IGO’s company-wide risk identification, assessment and management process as detailed in our Risk Management Standard. The IGO Board, Sustainability Committee, Audit & Risk Committee and ELT routinely consider climate change driven market and technology developments and are regularly provided with insights on trends and performance against climate change-related risks and risk appetite. Operational risk assessments are conducted at a site/facility level and reviewed at least annually by project management teams. Outcomes are secured in IGO’s Meerkat enterprise risk database, which is then integrated into the whole-of-business Business Critical Risk Register for review by the ELT and the Board where necessary. This is supplemented with a dedicated risk assessment across our business strategies and financial plans, including scenario analysis, to ensure that uncertainties and timeframes specifically relevant to climate change risks are appropriately considered. IGO uses a standard methodology to categorise risk in one of five categories. Appropriate controls are then identified, authorised and implemented according to the risk category allocated. IGO imposes a higher standard (i.e., is less risk tolerant) about the management of Occupational Health, Safety, Environment and Community (HSEC) risk. Risk and Opportunity Analysis To meaningfully assess our climate change-related risks and opportunities, we define three-time horizons tailored to our business profile and activities: Short-term time horizon of 0 – 5 years: Focused on the existing operations in our portfolio and the near-term potential acquisition of operating mine assets. Possible low and highimpact regulatory developments were considered as well as foreseeable physical impacts based on near-term climate forecasts. The recent Western Areas acquisition and joint venture with Tianqi has not been included in our assessment of climate changerelated risks and opportunities for FY22, however will be included in next year’s disclosure. Medium-term time horizon of 5 – 10 years: Focused on our developing projects, including Cosmos, and the execution of our growth and exploration strategies. As we are actively pursuing both brownfield and greenfield opportunities in Australia and internationally, the exact location, scale, infrastructure and operating conditions for our future portfolio is not yet known. As such, we considered how climate changerelated impacts and uncertainties could have implications for decisions relating to new discoveries, developments and/or acquisitions. Scenarios were used to identify areas where climate change may require greater focus in our planning processes going forward. Long-term time horizon (beyond 10 years): Considered longer-term transition and physical impacts for inclusion in the growth strategy, including additional screening criteria for potential development opportunities. These were generally consistent with medium-term impacts. The following table summarises the key risks and opportunities identified, along with management actions and plans.
RkJQdWJsaXNoZXIy MjE2NDg3