Anglo American Interim Results 2021

SUSTAINABILITY PERFORMANCE

Key sustainability performance indicators⁽¹⁾

Anglo American tracks its strategic progress using KPIs that are based on our seven pillars of value: safety and health, environment, socio-political, people, production, cost and financial. In addition to the financial performance set out above, our performance for the first four pillars is set out below:

⁽¹⁾     Sustainability performance indicators for six months to 30 June 2021, and the comparative period, are not externally assured.

⁽²⁾      Energy, GHG savings and water withdrawals data for the current period and prior period is shown to end of May.

⁽³⁾    Consistent with our ambition towards responsible water stewardship, we will reassess our water targets and their underlying indicators in 2021. The aim is to ensure they are meaningful to all stakeholders and technically appropriate; drive the right behaviours at our operations; reflect the complexity of the socio-political and ecological context of our sites; and embrace our ambition to reduce our water footprint, while creating value for our stakeholders. The 2030 target relates to freshwater abstraction in water scarce regions.

⁽⁴⁾    Data presented is for the years ended 31 December 2020 and 2019. In 2020, we launched a new integrated social performance management system (Social Way 3.0), which has raised performance expectations and has resulted in continued improvement in our social performance. Prior to 2020, our target was full compliance against our previous standard. As we implement the new standard, sites have been required to set milestone targets on the way to the requirement of full compliance by end 2022. Data for 2020 and 2019 are, therefore, not comparable. In 2020, 80% of our year-end roll-out milestone targets were met and 23% of the Social Way 3.0 requirements were fulfilled in the first year of the transition to the new standard. Sites are expected to have fully implemented the Social Way 3.0 by the end of 2022.

⁽⁵⁾    Local procurement spend relates to spend within the country where an operation is located. Data for the current period and prior period is shown until end of May.

⁽⁶⁾    Taxes paid are equivalent to taxes borne and collected and are payments by Anglo American in respect of taxes either directly incurred or paid on behalf of other parties as a result of the Group's economic activity. The six months to 30 June 2020 use assumptions and should be treated as an approximation.

⁽⁷⁾    Data presented is for the years ended 31 December 2020 and 2019.

Safety

Our safety performance has been fundamentally transformed in recent years, though we know there is always more to do and we cannot allow any form of complacency. Our determination to achieve zero harm is our most pressing challenge. Making sure every employee returns home safely at the end of each day drives our thinking and behaviour across the business. It is with this mindset that we have completed the first six months of 2021 without any fatal incidents. Our independently managed joint venture operations have also not reported any fatal incidents in the first half of the year.

We are unconditional about safety and we will not rest until zero harm is achieved and sustained across our business. We have shown it can be done for long stretches of time and now we must make it permanent.

In recognising material progress, the Elimination of Fatalities Taskforce that we launched in 2018 has been central to our improvement and is being stepped up in our quest for zero harm. In 2020, we recorded an all-time-low total recordable safety rate, being a 60% improvement since 2013, though we have regressed marginally in the first half of 2021 and we are giving this our full attention.

Environment

Our environmental performance continues to improve, with no Level 5, 4 or 3 incidents in the first half of 2021. This achievement reflects the improvements to our planning and operating disciplines across the business. We also launched a 'no repeats' challenge to help us learn from low level incidents and prevent repeats of a similar nature across the business, which has led to improvements in controls, specifically helping to prevent significant incidents.

Energy consumption in the first half of 2021 increased in line with production following the operational shutdowns during the first half of 2020 due to the pandemic. However, the increase in GHG emissions is partly offset due to our Copper business in Chile moving to a renewable electricity supply in 2021, thereby reducing its Scope 2 emissions, as well as a reduction in methane emissions from our metallurgical coal mines in Australia. Our operations in both Brazil and Peru have also agreed 100% renewable electricity supply contracts, resulting in an approximately 70% reduction in CO₂ emissions in Brazil, Chile and Peru.

Our Sustainable Mining Plan includes commitments to be a leader in environmental stewardship. By 2030, we aim to: reduce GHG emissions (Scope 1 and 2 emissions) by 30% against a 2016 baseline; improve energy efficiency by 30%; achieve a 50% net reduction in freshwater abstraction; and deliver net-positive impacts in biodiversity wherever we operate. And, by 2040, we have committed to being carbon neutral across our operations (Scope 1 and 2 emissions), including by using 100% renewables for our grid supply across our operations in South America.

WeCare - our global response to the pandemic

Anglo American acted quickly at the onset of the pandemic to support the lives and livelihoods of our workforce and host communities through the health, social and economic effects of the Covid-19 pandemic - through our global "WeCare" response programme. Our mines and host communities, which are also often home to much of our workforce, operate as an ecosystem and both must be healthy to prosper. Across our operational footprint and in those communities that are local to our operations, WeCare provides information and extensive practical support across four pillars of: physical health, mental health, living with dignity, and community response:

Physical health - education and behavioural change to support personal health and hygiene; health screening and testing; PPE and medical equipment and facilities; vaccination information programme; and support for government-led vaccination programmes, including licensing our own medical facilities in South Africa to vaccinate employees.

Mental health - employee support programmes to assist with mental health management, including via our employee app and online events and other digital materials.

Living with dignity - direct employee and community support to combat gender-based and domestic violence; work with health authorities to identify abuse cases and referrals to support mechanisms.

Community response - wide-ranging livelihoods programme to support communities through the social and economic effects of the pandemic, including: public information campaigns aimed at health and hygiene; health screening and Covid-19 testing; support for health service provision; continuation of essential services (e.g. water, energy, accommodation); food package distribution; employee match-giving programme; support for SMEs and entrepreneurs; support for teachers and students; job training for post-pandemic employability; and regional development planning to enhance local economic activity for the long term.

Anglo American Foundation - special endowment of $100 million

Building on the extensive in-kind support and financial contributions as part of the WeCare programme, we will also be making a special contribution of $100 million to the Anglo American Foundation. The Anglo American Foundation is focused on accelerating progress towards the United Nations' Sustainable Development Goals (UNSDGs), placing a particular importance on programmes that empower women, youth and vulnerable groups in Anglo American's host communities and countries of operation. By partnering with non-profit, public and private organisations, the Anglo American Foundation supports health, education, economic and environmental projects aligned with the goals of Anglo American's Sustainable Mining Plan - itself designed to align with the UNSDGs.

This special endowment is an opportunity to accelerate the Anglo American Foundation's work at a critical time for so many of our stakeholders and our planet and will help us take the scale of what the Anglo American Foundation can deliver to an entirely new level, funding more ambitious and longer term projects.