Sustainability Performance H1 2021: Transcript

Sustainability

Performance Update

Monday, 26th April 2021

Sustainability Performance Update

Monday, 26th April 2021

Sustainability Performance

Anik Michaud

Group Director, Corporate Relations and Sustainable Impact, Anglo American

Welcome, everyone, and thank you for joining us today for our Sustainability Performance Update. For those who don't know me, I'm Anik Michaud and I head up the Corporate Relations and Sustainable Impact function.

Twice-yearly sustainability updates going forward

We last updated you on our sustainability progress in October, and you may have noticed that we are increasing the tempo of these updates to twice a year, as we do with our financials. We absolutely welcome the growing interest from our shareholders and stakeholders alike, not least because sustainability considerations are integrated into every aspect of how we run our business day to day.

As many of you know, we have been sharing our progress on what is now called ESG, for many, many years, going back - well back before I joined Anglo American in 2008. We are delighted with the interest in what we're doing because the only way to have a sustainable business is to understand how all the dots join together, particularly in our industry. So, by updating you twice a year, we hope you can more easily track our progress. And it also gives us the opportunity to do deep dives and share with you specific areas of our work.

So, for today, please bear with us as we have a lot of ground to cover. And I have Mark and Stephen here with me, as well as some of our leads across the breadth of the sustainability work, in case you ask some really hard questions.

Two key words I hope you take away from this presentation: holistic and integrated.

Cautionary Statement

Next slide, please. As Mark has been heard to say, please read this slide carefully, but please also read it on your own time.

Agenda

So, the order of play today. After I've talked a bit about our ongoing response to COVID-19, Mark will give an overview of how we think about sustainability, how we are evolving our Sustainable Mining Plan and our 2020 performance on the metrics we use to run the business.

Mark will then take you through the E of ESG, which is the healthy environment pillar of the Sustainable Mining Plan. Then I'm going to update you on some of our social performance work that is making a real difference to how our stakeholders experience us; that's the S. And Stephen will pick up on the G, again, showing just how ESG is embedded into our various governance systems and processes. And finally, Mark will wrap up before we open for your questions.

Health & Safety Share

'WeCare'

Next slide, please. Okay, for our health and safety share. Of course, I do not need to remind anyone that, sadly, COVID is still very much with us globally, despite the encouraging vaccine

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progress in some countries. While we can now see how the vaccine gives us a pathway out of the pandemic, it is clear that COVID and its challenges are not going away quickly. You have heard us talk before about our WeCare programme that we put together last year in response to the challenges posed by the pandemic.

Through WeCare, we are working to protect the physical and mental health of our workforce, to support the lives and livelihoods in our communities, and to help tackle the scourge of gender-based and domestic violence.

Our operations

During the intense first wave of COVID-19, we quickly adjusted our operations to allow for social distancing, engaged our workforce in adopting all the right health and hygiene measures, and put in place numerous controls around health screening.

Our supply chain team had the foresight to quickly begin procuring all of the equipment and consumables necessary for the network of our laboratories that our most incredible health teams set up. We have carried out almost 400,000 COVID tests, representing more than four times our workforce.

Health team

I would be remiss if I did not give a huge shout-out to our health team led by Dr. Elton Dorkin, as they have been on the front lines working tirelessly. Through all the measures we have taken, we have been able to keep our people safe, prevent infection at the workplace and keep our operations going for the good of everyone.

Working with host communities

At the same time, we worked with our host governments, unions, communities and business partners. We were very mindful of the importance of our role in so many of our host communities, which are often in remote rural areas, spanning everything from the provision of basic services such as energy and water, through to supporting schools, healthcare and local businesses.

Next slide, please.

A Responsible, Holistic Approach

And today our responsible, holistic approach continues. As we have moved through the various stages of the pandemic, we are taking these initiatives further and expanding the breadth of WeCare to also educate employees and stakeholders on vaccines, and to work with governments to help deliver them. We are pleased to see COVID-19 vaccine starting to be rolled out in many of our key geographies. This is a much-anticipated stage in the fight against the pandemic and brings great hope for the future because the more people are vaccinated, the safer everyone will be.

You may have seen that we've committed up to $30 million to support vaccination in our host countries. Getting vaccinated is a personal choice, of course, and that choice should be respected. However, it is important that it is a well-informed choice, based on facts and reliable information. In line with our unconditional care for the safety and health of our colleagues and their families, we are encouraging our employees to take up the vaccine. We're strongly encouraging our employees to take up the vaccine when they have the

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opportunity to do so, reducing the risk of contracting COVID-19 and developing serious and sometimes life-threatening complications.

Let me now show you a short animation which we have been using with our employees, and it's an example of how we are helping them make the informed choice. Please, can you start the video?

[VIDEO]

And that's it for our health and safety share. Mark, over to you.

2020 Performance & Progress

Mark Cutifani

CEO, Anglo American

Thanks, Anik, and good morning, good afternoon and good evening, everyone. My intention is to provide a performance overview, and I will also try and paint a picture of how sustainability is integral to how we think, how we invest and how we operate.

Reimagining mining to improve people's lives

Next slide, please. Our purpose is to reimagine mining to improve people's lives. How we live our purpose is informed by our ambition. That is, we measure our performance and progress on the broader business transformation - and on broader business transformation in three dimensions.

Effectiveness

On effectiveness, the delivery of sustainable free cash flow funds our dividends and other capital returns to shareholders, while also providing the funding to grow and improve the business in the long-term.

Efficiency

Secondly, on efficiency; how we deliver that cash flow through our business investments measured by a return on capital employed, or ROCE, is our check to make sure we created sustainable value in delivering sustainable free cash flow.

Sustainability

And then finally, and most importantly, it also is reliant on our specific sustainability metrics, our sustainability strategy, a holistic concept across seven pillars of value.

We are making sure our broader business foundations are solid and reliable. We start with safety and health, and looking after employees and all of our business and social partners. It includes environment and being accountable to our communities. Social performance is about partnerships with communities, governments and other stakeholders.

Production and resources reflect the short-term value that we can deliver and the longer-term viability that underpins where we take the business in the long-term. Unit costs and margins reflect our ability to generate cash flow through price cycles, and our conservative balance sheet strategy at any point defines our ability to act cyclically, as we've shown with recent investments, including Quellaveco and obviously the Woodsmith Project in crop nutrients.

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Purpose

Next slide, please. Now, from what we aim to do to how we do it. Our purpose and ambition inform our strategy, and our strategy focuses on three areas of endeavour. First, on portfolio, as you know, we are an asset quality focused group, proving a starting point for long-term sustainable performance in metals and minerals. Our focus on quality provides a natural tendency to look for the best of the best in those commodities in which we work. And so our strategy and our focus on future-enabling commodities reflects that forward-looking approach, positioning us in high-quality bulk commodities, metals driving electrification like copper and nickel, or hydrogen economy where we look at PGMs and other products that we produce to support those new economies.

Innovation

In terms of innovation, doing things differently is about finding new pathways to being more competitive while, at the same time, shrinking our natural inputs and footprint. That is, by reducing energy and water consumption, we reduce our costs and by improving productivity and capital efficiencies, we grow our business and increase production intensity, while at the same time our focus on the position further reduces costs and reduces our physical mining footprint.

An integrated approach

This integrated approach in terms of how we operate connects how we work with and through people to create a very different mining business. And in our business, innovation is only as effective as the creative intensity of what we do and how we support our people being creative. In our world, people are not assets or resources. They are much more than that. People are the business.

Central to these concepts is future-smart mining, which is a holistic approach to driving competitive transformation. It includes our innovation and technology step changes to improve efficiency and footprint outcomes, and Tony will talk to you a bit more about that next month.

The key point to understand in this conversation is we see innovation in technology as servants to both improve shareholder returns and sustainable business outcomes. The broad transformation framework is based around our Sustainable Mining Plan and our Collaborative Regional Development approaches. These are both innovative and certainly set us apart, we think, from our competitors.

Sustainable Mining Plan (SMP): Ensuring Stretch and Relevance

Next slide, please. So the Sustainable Mining Plan is central to our delivery of sustainable performance. Our Sustainable Mining Plan was finalised in December 2017, and while the concept was industry-leading at the time, there is no doubt the world has continued to move forward. And so we understand we have to evolve and move on as well.

Since the launch of our Sustainable Mining Plan, new issues have shaped the public debate; for example, circular economy, social inequality, gender-based violence and other key issues. Stakeholder expectations have evolved as well. Clearly, carbon neutrality being the big one on the agenda. Gaps in our commitments have been identified. That is in marketing, non-

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