From governance to strategy, risk management and capital allocation, among others, climate change and its impact on our business and stakeholders are central to our thinking and actions. Our ability to create sustained value now and into the future drives our response to the climate change agenda.
Details of our approach, performance and how we go beyond compliance are included in this section. This content is supported by supplementary information on our website:
Databook | TCFD index | Climate Change Response strategy | Climate change position statement
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First-time participation in CDP forestation programme |
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Introduced a pilot for a carbon footprint calculator mobile app for employees |
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Implemented an employee decarbonisation campaign |
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Over R1.5 billion invested in the LSP to reduce scope 2 emissions, manage climate-related risks and leverage opportunities |
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Progressed against our decarbonisation journey and identified various decarbonisation projects and opportunities for implementation in the short to medium term. These include nature-based solutions and carbon offset projects |
To fundamentally change our business and positively respond to the climate change agenda by transitioning into a low-carbon business
Exxaro's Climate Change Response strategy, transition plan and position statement support the objectives of our Sustainable Growth and Impact strategy
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Transition at speed and scale |
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Be carbon neutral by 2050 |
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Empower people to create impact |
We have engaged extensively with a range of stakeholders on climate change issues (supporting research and development).
Customers and suppliers
To identify potential emission reduction projects that include scope 3
Employees and communities
To further embed and create awareness, and drive behaviour change
South African National Biodiversity Institute
To assist with the identification of nature-based solutions/projects with carbon sequestration benefits
Council for Geoscience
To collaborate on and participate in the carbon capture, utilisation and storage project
Agricultural Research Council
To address issues on land management and climate change
University of Pretoria
To develop a digital climate change training course for employees, which was nominated for an international award
Future focus
Our primary focus areas in 2024 include climate adaptation (at our operations and host communities), and using climate-related data to predict the impacts of extreme weather events on our operations, communities and social impact programmes.
In addition, we will intensify energy efficiency and mitigation efforts at BUs. We are evaluating various opportunities to reduce emissions, including biofuels, compressed natural gas, electric vehicles, carbon and methane capture and storage, solar farms, nature-based solutions and carbon offsets.
Our Climate Change Response strategy and position statement will be reviewed and updated in 2024 to incorporate the latest developments in climate science and climate frameworks. We will also be setting green procurement targets for our supply chain strategy.
CASE STUDY:
Empowering our people to adapt
We recognise that our employees play a key role in our adaptation and resilience efforts as we progress on our journey of being carbon neutral by 2050. As such, Exxaro launched a decarbonisation campaign to equip our employees with the knowledge, skills and mindset to contribute to a greener, low-carbon future.
The first phase of the campaign encouraged employees to participate in a 10-week personal decarbonisation challenge and complete the innovative climate change course – available on MyNexxt as a series of masterclasses. The course was developed by our climate change adaptation and resilience experts in partnership with University of Pretoria academics and NewLeaf Technologies. Using innovative, cutting-edge technology, the learning material aims to create a comprehensive understanding of climate change and its impacts while fostering a culture of awareness, education, accountability and action. The course was nominated for an international award for best learning-based experience.
Weekly challenges on LetsConnect encourage and reward planet-saving behaviours. Winners receive environment‑friendly prizes that support recycling, energy efficiency, eating and growing healthy food, and choosing sustainable fashion and travel.
To make this learning experience accessible and engaging, the digital platforms integrate state-of-the-art technologies such as virtual reality, videos, infographics and analytics with easy access to course modules and effective communication.
The second phase is planned for 2024 and will focus on decarbonisation projects being implemented at BUs.
Guided by Exxaro’s Climate Change Response strategy and the TCFD recommendations, our approach to climate change mitigation, adaptation, resilience and decarbonisation emphasises our sustainability and environmental stewardship imperatives.
Delivering on our decarbonisation objectives requires an integrated approach with all aspects of our business. We have also made a commitment to achieve our short-term target of reducing scope 1 and 2 emissions by 40% by 2026 and our long-term carbon neutrality objective by 2050. We still aim to reduce our emissions through operational efficiency programmes, carbon offsets and self‑generation of renewable energy projects to ensure continuous operations and building a resilient clean energy network. These programmes will also contribute to the reduction of our carbon intensity through reducing diesel and electricity consumption.
Although we did not implement new decarbonisation projects during the year, we are investigating nature-based solutions, additional energy efficiency and renewable energy projects. We will continue to support research and development and monitor, measure and report our performance. Our collaborative, inclusive partnership approach to climate change remains a key enabler for us to continue on our journey of being carbon neutral in a just manner.
In fulfilling our commitment towards decarbonisation, we are in the key stages of developing and completing our decarbonisation roadmap, with the intention of identifying cost‑effective decarbonisation pathways for the business (up to 2050). We envisage that the roadmap will be finalised before the third quarter of 2024.
The roadmap considers and details the following:
Our approach considers the external climate-related risks we face; the systems, processes and projects we implement; and awareness created through communication, education and training for stakeholders across our value chain.
Growing external risks present significant opportunities for us to evolve and transition, thereby securing a future for Exxaro, our communities and future generations.
The risks identified during the detailed climate change scenario analysis conducted in 2019 and 2020 (Integrating climate change into our strategy) continue to inform our response and mitigation efforts.
Exxaro aims to use climate-related data to predict the impacts of extreme weather events on our operations, communities and social impact programmes. We have engaged with a service provider to consult on climate predictions for specific operations and value chain partners. These predictions will enable us to determine or better understand how the impacts of extreme weather events on our value chain in turn impact our business, suppliers, customers and communities.
We have engaged with the South African National Biodiversity Institute on guidance for the use of nature-based solutions to offset emissions at our operations. We adopt nature‑based solutions that enable biodiversity protection and restoration, positively contribute to our broader social impact, and include benefits such as carbon offsetting and credits. Our afforestation and reforestation projects enable carbon absorption and sequestration, and are a cost‑effective way of addressing climate change, the biodiversity crises and land degradation. The project at our Hlobane mine in closure also provides work opportunities for local people and entrepreneurs in the forestry industry.
We will also be implementing a pilot offset project, where Exxaro will plant Portulacaria afra, commonly known as Elephant Bush or Spekboom trees on approximately 1ha of land at Grootegeluk mine and 1ha at Leeuwpan mine. The Spekboom tree was selected due to its carbon absorption capabilities and ability to easily grow in almost any environment. The offset project will also benefit local communities by creating employment and commercial opportunities such as supplying Spekboom to various stakeholders and obtaining carbon credits. The projects will kick off in March 2024.
To measure carbon sequestration results from our Hlobane afforestation and reforestation initiative, we are currently investigating an evidence-based approach to quantifying, measuring and managing results. We have also established strategic partnerships with several stakeholders to ensure we leverage all opportunities presented in using nature-based solutions.
Our increasing efforts to reduce our scope 1 and 2 emissions, and improving energy efficiency align with our decarbonisation plan, now and into the future.
Our employees, contractors, customers, suppliers and communities play a critical role in our ability to address climate change issues. Exxaro has several awareness, training and education initiatives that cover topics such as carbon pricing, carbon tax, adaptation, carbon budgets, and climate mitigation from a global, national and business perspective. These initiatives not only deepen our knowledge as an organisation, but also stimulate behaviour change in pursuit of climate change adaptation and resilience at our operations and in communities.
South Africa has revised its NDC target range for 2025 to 398MtCO2e to 510MtCO2e and for 2030 to 350MtCO2e to 420MtCO2e compared to 398MtCO2e to 614MtCO2e between 2025 and 2030 as communicated in the first NDC. The revised NDC requires us to do more to support the country’s transition to a low-carbon economy. The COP28 Global Stocktake outcomes indicate that Parties are off track when it comes to meeting the Paris Agreement objectives and there have been strong calls for more ambitious NDCs and policies, and support for governments.
Being one of the first mining companies in South Africa to participate and disclose information on climate change mitigation, water security, governance, risks and opportunities, strategy, metrics, and targets on the CDP
Providing sponsorships for South Africa's pavilion at COP every year. The conference is a platform for government, industry and other stakeholders to share and contribute towards global efforts to mitigate and adapt to the impacts of climate change
Creating employment and reskilling opportunities for communities living in and working at and around our operations
Signing an MoU with the Council for Geoscience that seeks to further sustainability and decarbonisation efforts. The MoU expresses our intent to collaborate on carbon capture, utilisation and storage initiatives towards the reduction of carbon emissions in South Africa and potentially contributing to value chain/scope 3 emissions reduction
Additionally, the promulgation of South Africa's Carbon Tax Act, 2019 (Act 15 of 2019) contributed to GHG emissions reduction being a business imperative as this could affect our financial and sustainability performance. Governed by the Carbon Tax Act, the current carbon tax rate is R159/tCO2e with several tax-free allowances.
CASE STUDY:
Sustainable practices in action
Our Grootegeluk mine hosted the sustainability summit in Lephalale, where employees and other stakeholders from various BUs shared insights and charted the way forward for Exxaro's sustainability.
This year's event adopted greening principles, demonstrating our commitment to incorporating climate change action and sustainable choices in our daily activities. Beyond our sustainable choices for the summit, with benefits for local communities, we commissioned a carbon footprint study and report – believed to be a first for an off‑site and off-grid event. The study measured the event's energy use, water and waste management, and related transport and accommodation. Prepared in line with the best practice GHG Protocol Corporate Accounting and Reporting Standard methodology, the final report demonstrates our commitment to carbon reduction. It will inform our approach to similar events in future.
Guest speakers and our leadership teams urged delegates to continue playing their part at work and home to achieve Exxaro's decarbonisation objectives.
Forging strategic partnerships to address scope 3 emissions
Our commitment to decarbonisation efforts and the just energy transition extends beyond scope 1 and 2 emissions.
We recognise the significance of mitigating scope 3 emissions – which are beyond our direct control, yet present challenges for our business. As such, we aim to play a role in mitigating and reducing these emissions throughout our value chain. Strategic partnerships play a vital role in achieving our decarbonisation objectives, and we collaborate with customers and suppliers to ensure carbon neutral goods and services within the value chain.
Recently, we formed a strategic partnership with the Council for Geoscience to explore carbon capture, utilisation and storage in Mpumalanga. This technology will be instrumental in addressing scope 3 emissions, enabling us to contribute to South Africa's carbon footprint reduction, fulfilling international commitments such as the NDC and the just energy transition. Our participation in carbon capture, utilisation and storage research is motivated by its global recognition as for decarbonisation efforts, as highlighted during COP28.
We anticipate that partnerships like this will propel us towards our goal of powering better lives in Africa and beyond.
Our decarbonisation plan outlines our journey to reduce our carbon footprint and ultimately become carbon neutral by 2050. Supported by analytics tools that inform strategic decision making, we include climate change metrics in scorecards, and climate change is embedded in our capital allocation model.
Our decarbonisation plan includes several initiatives to manage and reduce our emissions. We classify our emissions as follows:
To ensure comparability, Exxaro measures, manages and reports energy and carbon data in terms of the GHG Protocol's Corporate Accounting and Reporting Standard. Our scope 1, 2 and 3 emissions are monitored and reported annually.
GHG emissions recorded over the past three financial years are in our performance.
We aim to reduce scope 1 and 2 emissions through self-generation solar PV projects and operational efficiency programmes. These programmes reduce diesel and electricity consumption, and rectify higher carbon intensity per tonne of product mined caused by suboptimal equipment use.
While it is critical to reduce our direct emissions, the largest contributor to our indirect emissions profile is our scope 3 emissions. We therefore focus on reducing our indirect emissions through ongoing educational and awareness campaigns with stakeholders across our value chain. The impact of our stakeholder engagement and partnerships to address scope 3 emissions cannot be measured in terms of tCO2e saved, but they are critical to ensuring that our transition into a low-carbon business is just and inclusive – taking everyone along with us on our journey.
Our emissions reduction initiatives are driven by our efforts in energy management (energy efficiency) and implementing cleaner energy sources at our operations.
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Energy and water efficiency programmes (linked to performance incentives) |
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Compliance focus: pollution opportunities prevention plans for operations |
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Solar PV at Grootegeluk |
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Renewable energy consumption at all our operations |
We continue engaging strategically and taking targeted measures with our key suppliers to partner and collaborate on value chain emissions reduction
Our approach of aligning our portfolio towards low‑carbon transition minerals will be key in addressing scope 3 emissions
We are supporting industry and government efforts to develop low‑carbon technologies such as carbon capture and storage, which are critical for the removal of carbon emissions
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Nature-based offset projects |
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Exxaro decarbonisation training and employee participation |
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Leadership-driven process |
Pollution prevention plans
Our 2021 to 2025 pollution prevention plans, as required by the National Environmental Management: Air Quality Act, include CO2 emissions reduction projects for reducing diesel consumption and carbon emissions at our operations.
Assumptions used to estimate anticipated GHG emission reduction: electrical and diesel conversion factors, and the project scope, are consistent.
We are investing extensively in developing knowledge of climate change, renewable energy and sustainability. We prioritise innovation, research and development, and collaboration on sustainability issues with value chain stakeholders.
Focus areas
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Wits Global Change Institute Enhancing climate change adaptation and resilience for industry and government |
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Unisa Business and Climate Change Publications on the coal mining sector’s response to climate change and a decision-making framework for corporate climate change response |
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University of Pretoria Energy, Water and Food Two toolkits on motor resizing and multi-drive conveyor belt design and simulation to save energy as well as technical reports on energy efficiency in South Africa |
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Industry Task Team on Climate Change Working with government and other businesses to address South Africa’s international climate change obligations |
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NBI membership Contributing to thought leadership on climate change issues |
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Minerals Council Discussions with government on climate change management |
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Business Unity South Africa (BUSA) and Business Leadership South Africa Engaging with businesses through BUSA and Business Leadership South Africa on issues affecting the country and securing energy supply |
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Energy Intensive Users Group of South Africa and Energy Efficiency Leadership Network Working with government, power utilities, industry and other stakeholders to ensure a financially viable, technically healthy and well-managed energy supply sector for South Africa |
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Government, NGOs, communities and industry Engaging on air quality management in priority areas |
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Internal performance measures
External performance measures
Internal performance measures
External performance measures
The RBR committee manages climate change risks and opportunities. The SERC ensures we align with just transition principles. The ESG steering committee's role is to support Exxaro's ongoing commitment to environmental, health and safety, corporate social responsibility, corporate governance, sustainability, and other relevant public policy matters.
Scope 1 emissions*
Scope 2 emissions*
* All of Exxaro's BUs' carbon emissions are taken into account for these two intensity calculations.
Scope 1 and 2 GHG emissions (ktCO2e)
Scope 3 GHG emissions (ktCO2e)*
Carbon emission by source (ktCO2e)
* Source proportion.
Refer to the databook for more detail on our scope 1, 2 and 3 GHG emissions.
Supporting research and development in climate change R63 million invested to date
(2022: R8.9 million)
Carbon tax liability R2 797 million for production-related emissions, ie fugitive methane emissions associated with the coal seam
Climate
B
Management category
Water
B
Management category
Our scores indicate that we are taking coordinated action on climate change and water security issues. To improve our performance, we are strengthening our efforts to demonstrate best practice in strategy and action as recognised by frameworks such as the TCFD, Accountability Framework and others.
For more information on our CDP performance, please refer to www.cdp.net and the databook.
The 68MW LSP at Grootegeluk, designed to reduce our emissions by 161ktCO2e, achieved financial close on 29 June 2023 and construction activities began thereafter. Commercial operations are expected to commence in the first quarter of 2025. We also plan to implement solar PV projects at our mines in closure offices and Ferroland game lodges to reduce our scope 2 carbon footprint.
We continue efforts of promoting renewable energy as a cost-effective technology through the anaerobic biodigester programme, which was launched with SANEDI and UNISA in 2019.
Ongoing operational efficiency programmes implemented include working with our engineering teams and a service provider to identify potential group-wide projects to implement at our operations with significantly high energy usage. We are systematically reducing the emissions of our Grootegeluk vehicle fleet by addressing logistics constraints using analytics tools and implementing optimisation solutions that include:
Our operational efficiency drive aims to address challenges experienced in delayed internal reporting.
CASE STUDY:
Leveraging solar power through the LSP
The 68MW LSP is a significant step towards implementing Exxaro's decarbonisation plans and progressing the just energy transition. The LSP, owned by Cennergi Holdings Proprietary Limited, will supply solar energy to Exxaro's Grootegeluk mine. The LSP will serve as a behind-the-meter energy facility, directly providing solar power to the mine for 25 years through a power purchase agreement.
The project site is in the Waterberg District on Exxaro-owned land, and spans 236ha. The project will be constructed through a fully wrapped, engineering, procurement, and construction contract. The operations and maintenance of the solar facility will be entrusted to a highly experienced operator.
In line with Exxaro's Sustainable Growth and Impact strategy and decarbonisation plan, the LSP will generate 176GWh of clean electricity every year, thereby offsetting 161ktCO2e per year. Scope 2 emissions will be reduced by an estimated 27% in the first year of operation through self-generation and consumption of renewable energy at Grootegeluk.
The reduction in scope 2 emissions will bring us closer to meeting our 40% emissions reduction target by 2026. The LSP and future investments in decarbonising Exxaro's mining operations are a systematic and responsible approach to the energy transition without introducing additional risks to South Africa's electricity generation. Furthermore, the LSP and similar projects will foster sustainable development and enhance socio-economic benefits for local communities.
Exxaro participated in COP28 climate change deliberations and sponsored the South African COP pavilion. Key developments that Exxaro benefited from include decarbonisation technologies, fossil fuel sector, the Global Stocktake Report outcomes, developments in carbon markets, quantifying scope 3 emissions, carbon markets and trading, just transition developments, phasing out of fossil fuels, loss and damage fund, global adaptation fund, green finance, increasing renewable energy capacity and climate lobbying.
Exxaro has been facilitating climate change masterclasses for the past two years as part of employee awareness, education and behaviour change. Classes are held throughout the year.
Key initiatives implemented this year included the:
Report Index
IR