Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 289

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 289
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 We use scenarios to identify and assess climate-related risks and opportunities that may affect our business in the medium to long term. We do not undertake climate modelling ourselves, rather we determine the approximate temperature outcomes in 2100 by comparing the emissions pathways to 2050 in each of our scenarios with the Shared Socio-Economic Pathways set out in the Intergovernmental Panel on Climate Change Sixth Assessment Report. We also consider the carbon budgets associated with different temperature outcomes. Our scenario approach is reviewed every year as part of our Group strategy engagement with the Board. This year, we updated the scenario framework used to assess the resilience of our business under different transition-related scenarios. Our Conviction scenario is now our central case. In the prior year, our central case comprised the Competitive Leadership and Fragmented Leadership scenarios. The Conviction scenario underlies strategic planning and portfolio investment decisions across the Group, is used in commodity price forecasts, valuation models, reserves and resources determination, and in determining estimates for assets and liabilities in our financial statements. In the prior year, our central case comprised the Competitive Leadership and Fragmented Leadership scenarios. In this scenario, countries will decarbonise at a moderate pace, real gross domestic product (GDP) grows at 2.5% between 2023-2050, but energy intensity of GDP reduces approximately 2.7% per year due to sectoral shifts and greater efficiency. In Conviction, climate policies become more ambitious and effective over time resulting in a temperature rise of 2.1°C in 2100. Resilience scenario, which limits temperature rises to around 2.5°C by 2100, is a sensitivity analysis that is designed to test our annual plan and investment proposals. Weaker governance, declining global trade, and lower economic growth lead to less effective climate action. Real GDP growth only averages 1.6% between 2023 and 2050. N either of the Conviction or Resilience scenarios above are consistent with the expectation of climate policies required to accelerate the global transition to meet the stretch goal of the Paris Agreement. Despite global agreements on climate change reached in Glasgow and Dubai, emissions today continue to rise, making the 1.5°C goal of the Paris Agreement unlikely to be achieved. As our operational emissions targets are in line with 1.5°C, so too are our decarbonisation investment decisions. In 2022, we developed a Paris-aligned scenario, referred to as the Aspirational Leadership scenario. The Aspirational Leadership scenario