KGHM fully supports initiatives related to the global challenge of sustainable development and the reporting of ESG (Environmental, Social & Governance) data. To meet the needs of our stakeholders we created this section to make it easier to find in one place all information associated with the reporting of sustainability and non-financial information by KGHM Polska Miedź S.A.
In response to the global challenge presented by the growing threat of climate change, KGHM has committed to providing an expanded scope of information regarding our environmental impact in compliance with EU regulations and international initiatives on the reporting of CO2 emissions and greenhouse gas reduction goals for the years 2030 and 2030. Demonstration of our commitment may be seen among others in the granting of certification for two of our metallurgical plants by the prestigious Copper Mark program and our efforts to advance our Climate Policy. The Climate Policy of KGHM Polska Miedź S.A. embraces the U.N.’s climate reduction goals, sets ambitious CO2 emissions reduction targets and defines key areas and levers for reducing emissions. The Climate Policy will be followed by the detailed Decarbonisation Programme of the KGHM Group, which will outline the comprehensive capital expenditures needed to achieve reduced greenhouse gas emissions.
In 2021, KGHM Polska Miedź S.A. once again took part in the CDP initiative and provided a greater scope of information, such as Scope 3 emissions. In future our goal is to include the entire KGHM Group in this reporting to ensure maximum compliance with social and international expectations.
We are also intensively working to improve reporting on social issues, such as expanding our Human Rights declaration into a comprehensive Human Rights Policy along with a broader scope of reporting on issues related to gender equality and protecting the rights of indigenous peoples.
These efforts to improve reporting are firmly grounded in our commitment to operate under internationally-recognised integrated management standards, as well as the latest recommendations set forth by the Warsaw Stock Exchange in the document Best Practice for GPW Listed Companies 2021 which will ultimately encompass the entire KGHM Group.
Information on KGHM’s current policies and procedures, as well as related information on among others waste/tailings management, TSF safety and GHG emissions may be found in the links provided below and in the section ESG/Policies and Codes, as well as in the section devoted to Sustainable Development.
ESG data
In the following documents, incl. spreadsheets we provide data describing our operations in terms of our environmental footprint, actions taken for the benefit and well-being of society and employees, and corporate governance.
The actions taken by KGHM to protect the natural environment, to care for its employees, their families and the people of the regions where we operate, while applying the highest corporate governance standards, have for many years been a key element of our corporate identity. Our efforts have been recognised by prestigious international institutions such as FTSE Russell, MSCI and by our own Polish exchange – the shares of KGHM are a component element of the FTSE4Good Index Series and the WIG-ESG index. In 2020, for the first time in its history, KGHM participated in the Carbon Disclosure Project, entailing communication of the company’s environmental footprint in terms of greenhouse gas emissions. For our initial report we provided CDP with responses to the Climate Change questionnaire. In subsequent stages of the project we intend to expand our reporting to include information in the Water Security and Forests questionnaires.
What are KGHM’s plans for the immediate future as regards reducing CO2 emissions?
The following actions have aided in the reduction of direct emissions by KGHM:
The construction and start-up of a new flash furnace smelter at the Głogów Copper Smelter and Refinery;
The long-term increase in the share of scrap as charge material (among others through the use of the RCR scrap processing furnace at the Legnica Copper Smelter and Refinery; the processing of relatively clean scrap means lower carbon dioxide emissions and is in line with the principles of closed economy operations);
Technological improvements (e.g. in terms of fuels).
The largest drop in emissions was recorded at the Głogów metallurgical facility thanks to a change in technology from shaft furnace to flash furnace smelting. This change in technology lead to a total decrease in CO2 emissions (indirect and direct) by around 25%. Further reduction of KGHM’s carbon footprint will mainly be based on the consumption of electricity generated to an ever greater degree from low- or zero-emission sources. This in turn leads to lower indirect emissions, which, jointly with the trend towards electrification (increasing use of electricity as a source of energy for industrial processes) which also result in the long term to substantially lower direct emissions.
Over the next 24 months the KGHM Polska Miedź S.A. Group plans to bring on-line solar power plants of over 10 MW, which on an annual basis will enable a decrease in emissions of CO2 and other nitrogen and sulphide compounds and of dusts of more than 8 thousand tonnes.
KGHM ZANAM, a company belonging to the KGHM Group, is investing in a solar power plant with a capacity of 3 MWp. The photovoltaic power plant was opened in December 2020 and is the first such power plant in Poland which will operate based on 4.0. technology. The facility will be fully computer-controlled and automated, equipped with a Control Room and built under the guidelines of the International Energy Agency for the construction of solar power plants.
We are also considering investments in wind farms, though this is dependent on changes in the regulatory environment.
What actions are being taken by KGHM to encourage their suppliers to cut emissions?
Due to increasing demands by regulators and society in general, including investment funds, the Company is in the process of preparing to publish an expanded scope of information on its environmental impact in compliance with guidelines announced by the EU and by international initiatives on the reporting of emissions and GHG reduction goals.
In 2020, for the first time in its history, KGHM Polska Miedź S.A. participated in the Carbon Disclosure Project (CDP). The questionnaire contains elements involving the management of emissions, risks and opportunities, business strategy, etc. Many of these elements, such as risk analysis and emissions plans, are an everyday part of the Company’s operations. In the near future, KGHM expects to develop more detailed plans regarding its corporate development and strategic objectives in the area of climate change and impact.
Is KGHM aware of any regulatory activities which could facilitate the process of reducing the company’s carbon footprint?
Regulations which could aid in reducing KGHM’s carbon footprint can be divided into two groups. The first involve technical changes which could facilitate operations in the company based on its own sources of energy and its own distribution system. These include:
Amendment of the legal definition of direct lines to the demands of RES and power purchase contracts (simplification of the process of obtaining direct line status for generation sources connected to plant networks);
Streamlining regulations for the functioning of Closed Distribution Systems (removing from companies such as KGHM – which hold the status of Distribution System Operator, but are not professionally involved in this sector – administrative obligations unrelated to its own activities);
Minimising bureaucratic obstacles arising from rules for the functioning of power systems – such as regulations for the balancing of energy and regulatory accounts;
Reinstituting support for high efficiency cogeneration systems for internal company use – a strong stimulus supporting investments in low-emission natural gas cogeneration.
The second group of regulations involves the financing of investments in new generation sources and power networks. In particular we believe that an energy-intensive industry investing in its own generation capacity should be allowed to utilise the funds accumulated in the Modernisation Fund and the Fair Transformation Fund.
We also wish to point out that the quickest method to reduce emissions is by investing in renewable energy sources. Solar power plants can be built fairly rapidly, but unfortunately the preparatory procedures are much more time-consuming. It is worth considering changes to the requirement to include in municipal planning documents the need for permission for solar power plants with capacity above 100 kW (perhaps 500 kW in future based on a draft bill to alter the RES law). For example, consideration could be made of foregoing such a requirement for industrial terrain or areas designated for economic activity.
In terms of energy from wind power it is crucial to enable investments in technically advanced and economically mature solutions. The wind turbines available today require the use of tall masts, which is directly bound to the need to liberalise the so-called 10H principle. The directions of changes currently announced are a good example of this.
What do KGHM feel are the barriers and difficulties involving the implementation of initatives related to decreasing CO2 emissions?
Barriers to transformational initiatives are in the first instance the availability of technology and its costs. There remains a lack of economical and applicable solutions for the capture and storage of carbon dioxide (CCS). Without cheap technology it is impossible to completely eliminate emissions. Much can be achieved by applying low- or zero-emissions energy sources, but to successfully do so financing remains a critical element (preferably non-refundable grants, in terms both of capital expenditures and operating costs), as well as appropriate regulatory support.
