TCFD Alignment Climate Change Governance
Northern Star is committed to understanding how both the physical impacts of climate change and the transition to low carbon operations might affect our business. We understand the importance of continuing our alignment with the TCFD recommendations, and the need for Northern Star to progress its commitment to a low-carbon economy in advancing our Emissions Reduction projects.
We have developed inhouse capabilities to model our sites’ power and energy demand, wind efficiency and timing, and solar efficiency and timing. Through this work, we are developing a financial model for each of our five operations where we anticipate commissioning renewables, as shown in our 2030 Emissions Reduction pathway.
Northern Star’s continued alignment with the Task Force on Climate-related Financial Disclosures (TCFD) assists us to understand and build resilience in relation to the physical and transitional risks posed by climate change.
As part of our risk mitigation strategy, Northern Star is focused on:
- assessing and reducing our greenhouse gas (GHG) emission footprint;
- assessing the physical risks of climate change on our operations, including potential water stress; and
- strengthening our climate change governance by reviewing our climate change related risks and ensuring control measures are incorporated into our business practices.
Climate Change Scenario Analysis
Northern Star’s Board has oversight of the physical and transitional risks posed by climate change assisted by the ESS Committee’s review of environmental and social performance risks, and climate change related risks and the Audit & Risk Committee’s review of the Company wide risk register.
The Company's climate change-related governance structure is shown below. Climate change related matters are considered quarterly by the Board through its ESS Committee meetings. Northern Star’s Chief Legal Officer & Company Secretary has climate-related reporting and disclosure responsibilities within her portfolio.
Northern Star’s Climate Change Policy confirms our alignment to the Paris Agreement through our Net Zero by 2050 Ambition. The Climate Change Policy commits Northern Star to developing and implementing a climate change strategy that:
- focusses our activities in reducing Scope 1 and Scope 2 Emissions;
- aligns our operations with the 1.5°C Ambition;
- use our influencing capability to reduce Scope 3 Emissions; and
- contributes to the 1.5°C Ambition beyond our business by influencing government and funding business relevant projects to help remove or avoid emissions.
Northern Star's Climate Change Governance Framework
- Reductions in absolute carbon emissions, and water
usage, are included in some long-term performance rights KPI’s for the Group senior management team
Strategies and Policies
- Net Zero Ambition
- Target 35% reduction in Scope 1 and 2 emissions by 2030
- Climate Change Policy, adopted in July 2021
- Preparing annual Sustainability Reports with reference to GRI standards from 2021
- Alignment of business practices to TCFD recommendations from 2019
Northern Star recognises that its business may be affected by both the physical impacts of climate change and the transition to a low carbon economy with the most significant effects to occur over the medium to long term.
Scenario analysis has helped Northern Star consider how the variables of physical and transitional risks may plausibly impact the Company’s operations over time.
Our scenario analysis work was initially conducted in CY2020 as part of our strategic planning and risk management processes, and has been continued to be progressed allowing Northern Star to:
- Assess the potential financial effect of climate related change on Northern Star’s operations;
- Test whether our business strategy is flexible and adequately accommodates these climate-related risks and opportunities; and
- Test how resilient that strategy is, and where necessary identify options for increasing our strategic and business resiliency to plausible climate-related risks and opportunities by making adjustments to strategic and financial plans.
In line with the Paris Agreement to reduce greenhouse gas emissions and accelerate the transition to a lower carbon economy, consistent with the TCFD recommendations and in order to provide comparable information, Northern Star used a 2°C scenario. The 2°C scenario was selected as it had greater data availability than the 1.5°C scenario.
Information sources used to construct Northern Star’s climate-driven scenarios
Details of our climate-related scenario analysis, what the scenarios mean for Northern Star and its business strategy and the potential opportunities arising from the analysis were outlined in our CY2020 Sustainability Report. An extract of the climate change scenario analysis details is available here.
Climate related risks and opportunities are discussed regularly as part of the standing agenda of the ESS Committee meetings. During the year the ESS Committee and Audit and Risk Committee review ESS and climate related risks and opportunities as part of the standard corporate risk review processes.
The ESS Committee also completes an annual ESS strategy review and an annual ESS benchmarking review, both include the consideration of Northern Star's responses to climate related risks and opportunities.
The Corporate Risk Review processes ensure consideration of climate related risks and controls at site, regional, functional and company-wide levels.
An extract of our climate related risks and opportunities disclosed in our CY2021 Sustainability Report is available here.
Progressing our Decarbonisation Strategy
Northern Star’s carbon footprint combines our Scope 1, Scope 2 and applicable upstream and downstream Scope 3 Emissions.
Northern Star's FY23 GHG Emissions Profile
Scope 1 GHG Emissions (t CO2-e)
Scope 2 GHG Emissions (t CO2-e)
Scope 3 GHG Emissions (t CO2-e)
Total Scope 1 & 2 Emissions intensity
(t CO2-e / t ore processed)
Further information and data on our carbon footprint, and energy generation and consumption can be found in our Performance Data Tables and our Annual Sustainability Reports.
Our Planned Pathway to 2030
Northern Star is committed to reducing its Scope 1 and 2 Emissions by 35% (from a 1 July 2020 baseline of 931kt CO2-e) by 2030, on the way to Net Zero operational emissions by 2050. This target is central to all business and strategic planning, with increased efficiencies and Emissions Reduction incorporated into decision making integral to all current operations, future projects, and business development.
As generated and purchased electricity accounts for the majority of Northern Star’s greenhouse gas emissions (FY20 Baseline), this is a key focus area for reducing our Scope 1 and Scope 2 Emissions. Measures to reduce Northern Star’s reliance on fossil fuels used for electricity generation include increasing control over use of renewables, including wind and solar. Energy storage options form part of this solution from both a maximisation of the renewable input and system integration aspect.
It is crucial for Northern Star that the commercial power grid power continues to increase its renewable energy content and reduce the amount of carbon intensive fossil fuels used for generation. While multiple decarbonisation studies are underway targeting the electricity generation that underpins our 2030 goals, mobility related emissions are our next key focus area. Northern Star is investing in enabling development projects, such as the BluVein initiative to develop solutions that deliver reductions in mobility emissions.
Further information on how we are progressing our decarbonisation strategy can be found in our Annual Sustainability Reports.
A continued shift to renewables is critical to achieving our 2030 targets and will remain an ongoing focus beyond 2030, as we turn to electrification in replacing our mobile fleet and also using renewable energy to achieve our 2050 Net Zero Ambition.
Further replacement of purchased and self-generated power supplies with renewables must be done in a way that reduces costs and maintains security of supply. In turn, lower power costs will result in lower operational expenditure, longer asset life and more sustainable operations.
Integrating current and future renewables and storage technology will be essential to maintain momentum in reduction of Scope 1 and Scope 2 Emissions, and greater efficiencies in our operations.
Northern Star is pursuing the planned strategic pathway shown below to reduce Scope 1 and Scope 2 Emissions by 35% by 2030. This would achieve a reduction in greenhouse gas emissions from our baseline (1 July 2020) of 931kt CO2-e down to approximately 590 kt CO2-e.
Further information on our planned pathway to 2030 can be found in our Annual Sustainability Reports.
Northern Star’s intent is to strive towards zero emissions and improve efficiencies wherever practicable, however there will likely remain a requirement to utilise offsets to achieve Net Zero operational emissions by 2050.
Where offsets are required, Northern Star’s preferred approach will be to generate the offsets such as carbon sequestration projects from within local communities and with stakeholder involvement, to benefit our stakeholders.