Good morning, and welcome to Newmont's 2021 Sustainability and Climate Strategy Update. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Eric Colby, Vice President of Investor Relations and Communications.
Please go ahead.
Good morning and thank you for joining Newmont's Climate Strategy and Sustainability Update. It is our goal today to share with you an overview of the company's recently published climate strategy report and our annual sustainability report. For today's discussion, you will hear from Tom Palmer, President and CEO Steve Gottesfeld, Chief Sustainability Officer Dean Goering, Chief Technology Jen Schmill, Executive Vice President of Human Resources and Rob Atkinson, Chief Operating Officer. They, along with other members of the executive team, will be available to answer questions at the close of the presentation. Turning to our cautionary statement.
Please take a moment to review the statement here and refer to our SEC filings, which can be found on our website. And now I'll turn it over to Tom on Slide 3.
Thanks, Eric. Good morning and thank you all for joining us. Today, we'd like to take the opportunity to share with you a bit about our leading approach to ESG and the Practices that are embedded in our culture and strategy at Newmont. Society's expectations of the role that a business plays in solving global challenges Are greater than ever. Our workforce is motivated by more than wages and salaries.
They want to work For a values based organization that is governed by a clear purpose. At the same time, communities and governments require us to contribute equal measure to what we extract. And the investment community demands greater transparency of our sustainability practices As they value the connection between solid ESG performance and a well run business. These expectations from ourselves, our workforce, local communities, host governments, investors and the world at large Compel us to have a broader conversation about how to operate a business in a sustainable way so that we can generate long term value for our stakeholders is a fundamental requirement. We will only be successful if we forge and maintain strong partnerships with local communities And demonstrate our ability to mine in a manner that protects the environment and creates opportunities for people.
Today, you'll hear about what we have done well, where we have challenges and have learned lessons and our plans for continued improvement. And whilst we won't be able to cover every component of our climate and sustainability strategy during today's discussion, It is our goal for you to have a broad understanding of our strategy, including an overview of the key differentiators that have positioned Newmont as the gold sectors recognize sustainability leader. And this begins with a review of our assets. Newmont is the world's leading gold producer with an unmatched portfolio of world class long life operations. Among our 12 operating mines and 2 joint ventures, over 90% of our attributable gold production is from top tier jurisdictions, Which we define as countries classified in the A and B ratings ranges by each of Moody's, S&P and Fitch.
We believe that where we choose to operate matters. As part of our sustainability strategy, we have a disciplined country risk program that ensures we routinely assess our jurisdictions and our own risk tolerance. This program guides us in thoroughly understanding the social and political risks, Ensuring that our investments and other business decisions are aligned with our sustainability and climate change goals. Our strategy is clear and we firmly believe that we have the best portfolio to generate sustainable returns from our long Managed Assets Located in the Best Gold Mining Jurisdictions. Newmont has a long history of taking a leading approach to environmental, Social and Governance Practices.
And whilst our approach has certainly evolved over the last few decades, It's important to remind ourselves of where we came from as it gives us good perspective on who we are and where we are going with respect to our ESG journey. Newmont branched out from the U. S. In the 1990s simultaneously going into Peru, Indonesia and Newsekastav. In developing our operations in these countries, we did not fully understand The concern with host governments and communities and the importance of taking the time to establish trusting and meaningful relationships.
There's an African proverb that says, if you want to go quickly, you go alone. If you want to go far, we go together. To build long term value and a lasting business, we need to go far together, which means that we need to learn from those difficult experiences. We have made tremendous progress, and I would like to highlight a few of the significant milestones in our ESG journey. In 2,001, U Mott became a founding member of the International Council on Mining and Metals or ICMM, an organization dedicated to safe, Fair and Sustainable Mining.
In 2004, we established a Safety and Sustainability Board Committee tasked to provide oversight, advice and counsel on key sustainability matters. And later that year, we issued our 1st sustainability report Demonstrating our commitment to transparency. In 2016, we began incorporating Sustainability targets into our compensation plan, ensuring our ESG framework is fully embedded in our business strategy And that every employee takes part in our sustainability performance. And this past year, We established our science based climate targets and are creating a pathway to achieve our climate change goals. As only the 10th CEO in Newmont's 100 year history, I'm a product of our robust governance processes.
And I'm proud of the progress we have made with respect to sustainability. Our journey, however, will never be complete. We must continue to challenge ourselves and build upon the lessons we've learned as a company and as an industry In order to solve the critical global issues we face today. The key to our progress is having well established metrics to drive our performance. And I'll hand it over to Steve Guttersfield to take us through our 2020 performance and our targets for 2021.
Over to you, Steve. Thank you, Lisa. And as Tom mentioned, we set specific and measurable public targets
and report on them manually, A process we have undertaken for the last 6 years. The benefit of doing this is 2 fold. 1st, to demonstrate our commitment to transparency And second, to provide insight into the management of the sustainability areas that matter most to our stakeholders and to our business. So how did we do this past year? As we look at our response to the pandemic, 1st And foremost, it was around making sure we were doing everything we could and focusing on the health and safety of our employees and communities.
And even though our performance against our 2020 targets was impacted, I am proud of the resilience of our people and our system during such unprecedented time. We fell short of several targets due to lower production, project delays, reduced spending and engagement and hiring primarily related to COVID-nineteen. However, I am pleased that despite the challenges for managing through a global pandemic, We delivered a solid safety performance in 2020, achieving 0 workplace fatalities and our lowest ever reportable injury rates. We also achieved our goals around water efficiency, reducing our consumption by approximately 7% and exceeding our target for the year. We successfully implemented an audible process to manage human rights risks within our supply chain and supplier community for those with an Increased likelihood of impact in human rights.
And one important item to note is that we achieved nearly all of our targets associated with our former Goldcorp operations, which were acquired by Newmont in 2019. These sites had a different set of targets as they focused on adopting and integrating Newmont standards. Turning to our 2021 targets. As Tom mentioned, our sustainability strategy is anchored in continuous improvement, challenging ourselves and the industry to address the growing expectations from all of our stakeholders to ensure we are building upon our progress and driving sustainability improvements throughout the business. We go through an extensive principles based materiality assessment to identify the issues that matter most to our stakeholders and to the company.
This process is required by the Global Reporting Initiative Standards and ensures that we have included stakeholder concerns and key issues in our targets and Reports. Our 2021 targets build upon the progress that was made previously, while also raising our expectations and goals for energy and climate change
as well as social acceptance. Tom, I'll turn
it back to you to talk about how we are held accountable for meeting our targets in these areas. Thanks,
Steve. Strong corporate governance with management accountability and active oversight from an experienced, diverse Board of Directors is essential for mitigating risk and ensuring that our sustainability strategy creates long term value. Our robust governance structure starts with the tone of the top. We are governed by an independent Board That holds management accountable for developing and implementing the policies and standards that create the foundation for Newmont's ESG practices. Within our Board, the Safety and Sustainability Committee provides advice, counsel and recommendations to management on key matters.
We also received support from our order committee on topics such as anti corruption and support from our leadership development and compensation committee on matters related to people, inclusion and diversity. To ensure all business decisions are in line with our sustainability strategy, We have ESG focused leaders that sit on our executive leadership and senior leadership teams, and they are supported by our corporate functions, Regions and operating sites to ensure that our daily interactions and activities are aligned with Newmont's sustainability Policies, standards and guidelines. At Newmont, our strategy is executed through our proven operating model, Which leverages our collective expertise and applies best practices throughout the business. This creates consistency across our operations and allows us to tap into a broad base of experts in various areas. To align our framework to our actions and hold ourselves accountable, 30% of our short term incentive program is is linked to our ESG performance.
Within this, 20% is dependent on meeting our health and safety targets And 10% is dependent on achieving external validation through specific ratings from MSCI, Bloomberg and the Dow Jones Sustainability Index. By linking safety and sustainability to our compensation program, We enable all of Newmont's workforce to take part in our ESG journey and share the responsibility for our sustainability performance. As part of Newmont's commitment to accountability and transparency, we have been disclosing our non financial performance 17 years and we regularly rank as one of the most transparent companies in the S and P 500. For us, Being a leader in accountability and transparency means that we hold ourselves to a higher standard and go above and beyond the minimum obligations. When we create a set of performance obligations in the form of internal or public targets, legal We have validation programs in place to verify that we are meeting those expectations.
At Newmont, this is achieved in 2 ways. First, we have 3 internal compliance programs that are used to verify conformance with social and environmental standards, to ensure compliance with legally binding commitments and to evaluate sustainability framework and performance criteria. 2nd, we have a 3rd party assurance program that reviews the data and processes related to our material disclosures, providing important third party confirmation that our disclosures Reliable and transparent. With that, I'd now like to turn it over to members of our executive leadership team To dive deeper into some of the critical ESG areas that we are focused on today. And we'll start with Dean Gearing, We'll talk about the way the technical services team that he leads is supporting our efforts to improve our critical controls for tailings management.
I'll turn the call over
to you, David. Thanks, Tom. There's been a number of recent tailings facility failures as well as the loss of life And environmental damage. And those incidents aren't acceptable to Newmont nor should they be acceptable to the mining industry. Newmont joined our ICMN peers to establish best practices with the implementation of the global industry standard on tailings management, which was released in late 2020.
We are committed to implementing that standard not just our high priority locations but at all of our Newmont facilities. As an early adopter the global industry standard, we have completed our new internal standards and guidelines for tailings management and the communication and training process to ensure that our people have a thorough understanding at levels and functions. We use hazard classifications to prioritize our efforts based on the potential downstream consequences of a hypothetical dam failure. Over the next 2 years, we will prioritize any active operations and legacy facilities that have an extreme or very high hazard classification. With the aim to achieve compliance for all facilities by the end of August 2025.
Throughout the process, to enhance the reporting of critical control performance for tailings facilities. Additionally, we are deploying new real time monitoring technologies and systems, Which collect data from on-site instrumentation and provide alert notifications, data evaluations and visualization and reporting. For us, our first tailings management is about preventing catastrophic failures at any Newmont managed facility and to protect our workforce and host communities. And our tailwinds management isn't all we'll be working on this year. I'd like to turn it over to Steve to kick off our discussion about our climate strategy.
Thanks, Dean. Climate
change is one of the greatest global challenges of our time And its impact on our earth and our business is undeniable. As the world's leading gold mining company, we believe that Industries that create value like mining have a responsibility to drive bold actions and innovation to transition us to a low carbon economy. That is why we have committed to greenhouse gas emissions reduction targets of more than 30% for Scope 1 and 2 emissions and 30% for Scope 3 emissions by 2,030 with the ultimate goal to be carbon neutral by 2,050. We set our 2,030 targets align with the Science Based Targets Initiative or SBTI, which ensures that our target supports the Paris Agreement's goal of limiting Global warming to well below 2 degrees compared to pre industrial levels. And I am pleased to say that our 2,030 targets were validated and approved by SPTI last month providing important independent and transparent third party assurance.
We are one of only 2 gold companies This approval and Newmont is among approximately 1,000,000 other S and P 500 companies to have their targets validated and approved by demonstrating our commitment to doing our part in addressing climate change. We know that it's important to set long range ambitious targets, But that the hard work will come in achieving them. Steve, please share what we are doing to ensure that we successfully meet our targets.
Yes, Steve, happy In order to reach
our 2,030 reduction targets and our 2,050 carbon neutral goal, we need to evaluate the carbon emissions at each of our operations and identify the processes, technologies and pathways to achieve our climate change ambitions. For our 2,030 Scope 1 and 2 targets, Our reduction opportunities will be delivered from our current operating assets. Currently, we're evaluating projects that shift to renewable energy, Enable fleet electrification and improve energy efficiency, all with the help enablement of our full potential program. Our 2,030 Scope 3 targets will be delivered through collaboration with our joint venture partners and our supply chain and value chain partners. Our ultimate goal of being carbon neutral by 2,050 allows us to think more broadly about the way we develop and build our mines and how to leverage technology at all of our sites.
To provide a bit more color to our 2030 Scope 1 and 2 emissions targets, let's review our strategy on
the next slide.
To reach our 2,030 targets, we need to reduce our annual emissions by roughly 1,100,000 tons of carbon, which is equivalent to removing over 120,000 vehicles from the road. This is achievable through projects we split into 3 main categories. The first category is a simple execution of our business plan, We will reduce emissions as our operations naturally shift towards underground mining. The second category relates to energy optimization, including productivity improvements, electrification and use of fuel alternatives. And finally, our most significant opportunity comes from our 3rd category, Supply conversion and the transition to renewable energy sources.
These opportunities are particularly impactful at our largest open pit mine. Renewable energy projects at 4 of our operating sites could lead to the reduction of over 800,000 tons of carbon per year, nearly 80% of the reduction needed to achieve our 1 or 2 targets. The projects under evaluation include wind and solar projects at Ballyton and Tandelion, a solar project at Penasquito and the Wind Project Yanacocha. In addition to these renewable energy opportunities, we've also identified additional projects which I'll cover in the next slide. In late 2020, Newmont announced our commitment to $500,000,000 over the next 5 years to support our climate initiatives And invest in our most impactful projects to reduce our carbon footprint.
As you can see, we have many opportunities around the world and we continue to evaluate these Projects to determine the optimal path to reduce costs and emissions. In combination with our renewable projects mentioned previously, we aim to meet our 2,030 targets through Atrolley Assist opportunity at Penasquito, Vorholland's fleet is already equipped with these electric wheel drive motors. By adding overhead power lines to the most fuel intensive haulage routes, We can provide electric power to Penasquito fleet, saving up to $30,000,000 and potentially reducing our emissions by over 20,000 tons of carbon per year. In addition, we will be leveraging our full potential program to identify energy efficiency improvements that are focused on reducing our consumption And eliminating waste energy. These projects could include using finer materials in crushing and grinding circuits to conserve energy We're optimizing our haul truck routes to be less fuel intensive.
As we look ahead toward our 2,050 ambitions, we are evaluating other renewable energy such as hydrogen geothermal power and are exploring ways to conserve, restore and better manage ecosystems to remove carbon dioxide from the atmosphere through nature based solutions. All of our projects under evaluation will pass through a rigorous disciplined investment system to And the lessons that we learn will be shared from our global operations as we select and deploy these methods to reduce our global carbon footprint. As an example, during the Q1 of 2021, we kicked off a project at Penasquito using variable frequency motors at 2 major freshwater pumping stations. These motors offer an array of pump speeds and conserve energy by acting as variable control More like a dimmer switch rather than an onoff switch. The use of technology at Pain Mosquito is serving as a base case for opportunities at other sites and projects in our portfolio.
This is one example of the power of our integrated operating model to rapidly replicate and apply leading practices consistently around the world. Addressing the impacts of climate change goes beyond our emissions reduction program. Climate change impacts items such as water as well. To better understand our approach to water management, I'll turn it back to Steve.
Thanks, Steve. Earlier, we discussed our water management targets. These targets are important as we recognize the right to water and sanitation is one of our salient human rights risks and we are committed To responsible water management to ensure our activities maintain a safe, reliable and accessible water supply for the communities near our operations. Gold mining activities are inherently water intensive and to lessen our impact, we recycle and use lower quality water when available. We monitor and measure our performance by evaluating consumption, recycling rates and water intensity metrics for all our active operations with a particular focus on sites and water stressed areas.
It is worth noting that in 2020, Our consumption and intensity at CC and D, Cerro Negro, Penasquito and Tanami declined by nearly 20% compared to 2018, even with lower production at Cerro Negro and Penapito due to the COVID-nineteen pandemic. And we continue to increase recycling efforts at these water chest areas, improving our recycle rate to 78% in 2020. Water Management plays a significant role in how we operate and we understand the responsibility we have in seeking a future that sustainably manages this essential resource across our global footprint. Access to reliable clean water is vital to the livelihoods of many of the communities where we operate. How we transparently manage water is one of the key aspects of how we mitigate risk and maintain social acceptance.
Aligning our business goals with the long term interest of our stakeholders and broader society is essential to our success now and in the future. To ensure that our business activities are supported by our stakeholders, we work to obtain social acceptance through meaningful relationships with To us, Social acceptance means that our workforce and business activities are accepted as part of the community and we view this as an ongoing effort. We work to earn and maintain social acceptance throughout the mine lifecycle by focusing on proactive engagement with Stakeholders based on inclusion, transparency and integrity risk and impact management, which involves The impact of our activities and minimizing and mitigating negative impacts to build long term positive partnerships. And mutual value creation, meaning we need to collaborate to catalyze socioeconomic development so communities can during operations and after mining activities. We realize that our business can play an important role in contributing to the economic development and social well-being of host governments and communities through job creation, provisioning local goods and services, community investments and paying taxes and royalties.
We understand that different stakeholders have different interests, needs and expectations from our business. At the local level, economic participation through jobs and supply chain opportunities are key considerations along with community development Overall social well-being. At the national level, taxes and royalties are often major considerations as they contribute to a country's economic health and Resilience. To ensure we understand and effectively manage these priorities, we focus on creating opportunities for local and indigenous employment Via training, skill building and broad economic development, supporting local and indigenous businesses by linking our supply chain needs to their interests and capacities and working together with local governments to support infrastructure development aligned to their development plans. We are also committed to a strong governance structure, including multi stakeholder engagement and transparency around payments to governments, which increases accountability, promotes trust, creates mutual value and reduces corruption.
We seek
to have a positive impact in the places where we operate by contributing to the growth and prosperity of host governments And investing and supporting local communities beyond the life of our minds. And now I'd like to invite Jen Smill to walk us through our efforts to create an inclusive and diverse workforce.
Thanks, Steve. We approach our inclusion and diversity work in the same way as the rest of our work in the ESG space, with a well defined strategy, the right metrics and targets to ensure we measure what's important to our business And developing and advancing the standards and systems to help us achieve our goals. Our objective is to establish a workplace that is inclusive and diverse, where all people have the opportunity to achieve and contribute to their full potential. Global Inclusion and Diversity is a strategic This is a priority for the organization that delivers improved business performance, higher employee engagement and provides access to a broader pool of talent. One of the most important ways we can create shared value is through local and indigenous employment in our business development efforts.
Employees from local and indigenous communities brings to Noomont an important dimension of diversity that helps us better understand customs, cultural practices and the impact our activities have on host communities and traditional land uses. And as we continue to improve our ability to measure performance from an indigenous employment perspective, we are starting to dig deeper into our internal metrics of attraction, retention and advancement. In Peru, Ghana, Suriname, Mexico and Argentina, nationals represent 70% to 90% of our workforce, ensuring that we represent the communities within which we operate. In addition to local and indigenous representation, We are also focused on increasing female representation in our organization. As the 1st and only mining company to commit to paradigm for parity, We are making progress through things such as eliminating symbols of exclusion from our business.
These are basic things that signal to women that they don't belong, such as lack of female restrooms or providing clothing and gear that is fitted only for men. We're also engineering our people systems to remove any bias. We are globally implementing recommendations from a 15 month trial of various interventions within our recruitment process, which involves over 60,000 data points, some representing between 1 to 3 years of information. Through the use of disruptive approaches such as blind resumes, more inclusive language and job posts, Diverse hiring place and diverse interview panels, we are interrupting unconscious biases within the recruitment process. And we are expanding our employee led and executive leader sponsored Business Resource Groups, known as BRGs.
BRGs are a critical system to connect our employees locally and globally, bringing together members of underrepresented or historically disadvantaged groups such as women, locals, indigenous people or LGBTQ plus communities along with their allies. These groups have been an impactful catalyst for advancing our inclusive culture. By the end of 2020, we had 22 BRGs across our operating sites And this number just continues to grow. Changes like these have led to increases in the number of women that sit on our Board executive leadership team and senior leadership team. And while we are largely at parity within our corporate functions, We acknowledge that we had a lot of work to do to increase female representation in our technical services roles and at our operations.
Rob, is there anything you'd like to add?
Yes. Thanks, Jen. For me and for Newmont, gender diversity is a critical priority And an area where we do need to improve, especially within our operating sites. Today, 2 of our general managers are female, which means that nearly 20% of our operating mines are run by women. But one of the very sobering statistics for me is even after the extensive efforts Over several years by many leaders and employee advocates, females only represent 8% of our operational workforce, which is totally out of state with the other functional areas of Newmont.
This is an issue that we must address and over the past year, We enhanced our employment tracking systems, allowing us to identify some of the areas where we need to focus our efforts. By leveraging our integrated operating model, we are able to apply the lessons learned from sites with high female representation to places where we need to make changes to our processes, culture and way of thinking. We fully understand that achieving balance is a continuous journey It will take significant time and effort, but we are committed to making strategic and targeted investments to better understand the challenges and implement targeted actions to accelerate female representation at all levels and in all roles at our operations. Shifting now to the next slide, I'll talk a bit about our safety progress. The COVID-nineteen pandemic was and continues to be a global challenge that has affected so many around the world.
We responded to the pandemic from a position of strength, which required the implementation of robust protocols early on and throughout our entire organization. Sadly, we've tragically lost 20 colleagues and business partners to the COVID pandemic, And these losses have had a profound impact on the entire Newmont family. For each death, An investigation was undertaken to identify any learnings that could be replicated throughout the business to continually improve our COVID controls. With each investigation, we also sought to determine the likelihood of the transmission taking place in the workplace, recognizing that the levels of community transmission would mean the specific timing of infection could not be conclusively determined. We are reminded that the safety Fine, understanding, and controlling the health and safety risks.
In addition to our response to COVID-nineteen, We have continued our disciplined and dedicated approach to safety. We delivered a solid safety performance during 2020, A result of having a clear focus on managing the fatal risks across our company and ensuring that we have a consistent and rigorous approach to confirm these critical controls are applied at all times to safely manage these risks. I'm pleased to report that we have reduced Our significant potential events by 66% since 2019 and reduced fatigue related significant by 60%. In 2020, we completed over 100,000 critical control verifications, of which 80% were conducted by leaders in the field using a digital platform that improves data collection, analysis and tracking. And today, we are completing over 1300 critical control verifications per day, already surpassing 250,000 since the launch of the program in May of 2020.
And our focus on critical controls helped enable us to achieve our lowest personal injury rates in our company's history, putting us in the top quartile for the lowest number of fatalities And injuries when compared to ICMN companies. Safety needs to be energetically led and managed every hour, Every shift and every day. Unfortunately, as the mining business knows full well, injury rates do not always translate to 0 fatalities and we will continue to work very hard to ensure we remain 1st and foremost We discussed these measures extensively in our annual sustainability report.
Steve, would you
like to talk about the reports?
Sure, Rob. Over the past month, we have published 2 very important reports that touch each and every part of our business and operations. The first is our sustainability report. Published annually, this report on the issues and metrics that matter most to our key stakeholders and it aligns with the most recognized, credible and independent sustainability reporting standards. The second is our inaugural climate strategy report, which focuses on our approach to achieving science based climate targets Ian aligns with the reporting guidelines from the Task Force on Climate Related Financial Disclosures or TCFD.
Our goal today was to summarize critical components of these reports and provide an overview of the key ESG strategies that are embedded into our business. For more information, we invite you to visit our website. Tom, I'd like to turn the discussion over to you for closing comments.
Thanks, Dave, And thank you, Dean, Jen and Rob for the discussion today. Newmont is broadly recognized for our robust and disciplined practices when it comes to sustainability reporting, both within our sector and among all corporate reporters. Our long history of taking a leading approach to environmental, social and governance practices has positioned Newmont as the gold sector's recognized Today, as I reflect on the last 100 years of the organization that I have the privilege to lead, It is clear that we must understand that we reap what we sow and it is our responsibility to take care of the resources and the people to provide us and the world so much. With that, I'll turn it over to the operator to open the line for questions.
We will now begin the question and answer session. This concludes our question and answer session. I would like to turn the conference back Over to Tom Palmer for any closing remarks.
Thank you, operator. We really appreciate you taking the time to join us today. These topics are important to us and critical to how we manage our business. Ongoing engagement with our shareholders and stakeholders is a key part of our process to continue raising the bar for the industry, and I encourage you to get in touch with us if you would like to have A deeper conversation on these important topics. Thank you for your ongoing interest and please stay healthy and safe.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.