Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 84

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 84
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Strategic report | Our approach to ESG | Climate Action Plan

| Our core scenarios                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ConvictionThis is our “central case” scenario and underlies strategicplanning and portfolio investment decisions across the Group.Consequently we limit disclosure of our assumptions in Conviction. Inthis scenario, countries will decarbonise at a moderate pace, withgreater awareness of climate-related physical damage triggeringmore radical climate action over time. Real gross domestic product(GDP) grows at 2.5% between 2023-2050, but energy intensity ofGDP reduces approximately 2.7% per year due to sectoral shifts andgreater efficiency. For the next decade, greenhouse gas (GHG)emissions are slightly higher than those in the Resilience scenariodue to a higher GDP, but emissions then decline at a rapid rate dueto increased low-carbon electrification which supplies around half offinal energy by 2050. In Conviction, climate policies become moreambitious and effective over time resulting in a temperature rise ofaround 2.1°C in 2100. The impact on corporate balance sheets willbe mixed - overall, although carbon pricing varies by region, it willincrease costs. GDP growth and the global energy transition areexpected to increase demand for copper, lithium and aluminiumthrough to 2050. Steel demand is expected to grow more modestly,and incentives to recycle scrap increase. Lower quality iron oreproducts are expected to receive greater discounts. |     | ResilienceAlthough described as a scenario, Resilience is simply a sensitivityanalysis that is designed to test our annual plan and investmentproposals. Weaker governance, declining global trade, and lowereconomic growth lead to less effective climate action. Real GDPgrowth only averages 1.6% between 2023 and 2050. Lowereconomic growth and a slower energy transition lead to lowercommodity demand and prices across all time periods comparedto Conviction. Lower policy ambition and the inability of theinternational community to tackle carbon leakage without resortingto protectionism leads to climate policies advancing sporadicallyand in an uncoordinated way. Overall there is only a 30%reduction in GHG emissions by 2050. The result is a temperaturerise of around 2.5°C by 2100. Consequently, climate-relatedweather events and natural disasters become more frequent andsevere in this scenario