Fortescue Metals Group, an Australia-based iron ore company is reportedly planning to become carbon neutral by the year 2030, a decade before its intended target, and tie pay across the company to emission-based objectives.
It is worth noting that BHP Group and Rio Tinto Group, two companies competing with Fortescue for market share are also stepping up their game in carbon emission reduction and adoption of renewable energy. Furthermore, investors are clamoring for accountability to ensure firms track, disclose and meet emission targets.
Rio Tinto Group had recently laid out targets to reduce the emission levels of its clients, mostly from the heavy pollution causing steel industry. Following in the footsteps of Glencore plc and BHP Group, it also added climate change targets to its short-term plans.
Unlike its competitors, Fortescue does not include customer emissions data in its estimates, arguing that would result in duplicate statistics under United Nations regulations, which decrees that countries should account for emissions created within their borders.
The Australian iron ore company plans to incorporate the new emissions target into its formal emoluments structure, including short-term and long-term incentive plans.
While the company’s focus will shift towards green energy, its subsidiary Fortescue Future Industries will take up green hydrogen, green electricity, and green ammonia initiatives in Australia.
Green hydrogen uses electrolysis to split hydrogen and oxygen and is classified as a zero-carbon fuel. It is an increasingly favored method to decarbonize emissions-intensive transport and heavy industry sectors.
Chairman of Fortescue Metals Group, Andrew Forrest was quoted saying that the company’s green energy and industry initiatives may one day out scale their iron ore business, but their commitment to iron ore and resources will remain indomitable
Emissions disclosures, targets, and performance data will be reported on a yearly basis as a part of Fortescue’s annual reporting. Annual emissions data and baselines will be calculated on the basis of respective financial year.
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