Anglo-Australian mining giant Rio Tinto is raising its climate ambitions to ensure it “stays relevant” and continues to deliver attractive shareholder returns, Kallanish reports.

The company told investors in London on 20 October that it’s accelerating its decarbonisation plans and investment. It’s now committing to reducing Scope 1 and 2 emissions by 50% by 2030 – this is over three times higher than the original target. It’s also bringing a 15% carbon reduction target forward by five years to 2025.

“While there has been broad consensus on the need to tackle climate change, there has not been sufficient action,” claims ceo Jakob Stausholm. “But things are changing fast. Governments are setting more ambitious targets and taking action…Society at large is also demanding and driving change. From switching to EVs or green energy providers to putting pressure on companies to produce goods in a carbon neutral way or boycotting companies that don’t,” he says in a presentation.

Stausholm says this presents a challenge for Rio Tinto, but in his view “an even bigger opportunity.” He says the company needs to raise its ambitions and take “genuine actions,” which includes switching to renewables at scale, electrifying everything that can be, and accelerating the development of new technology.

The miner is promising to address its major carbon footprint “with urgency,” starting with an investment of $7.5 billion to lower emissions between 2022 and 2030. This includes renewables development. Additionally, Rio is doubling its growth capex on commodities of the clean energy transition – lithium, nickel, cobalt and copper – to $3 billion/year from 2023.

R&D and technology development will also be boosted so that decarbonisation can gather pace across the company's operations.

“I appreciate many are sceptical about the ability of a business like mining to deliver on the climate front, beyond issuing ambitious and long-dated targets,” says the ceo. “We are able to do this, while continuing to provide attractive returns to our shareholders in line with our policy, because we have a strong balance sheet and world-class assets that deliver strong free cash flows through the cycle."