Leadership in managing climate change

Its philosophy is demonstrated through its social and environmental policies and through its commitment to develop the communities with which it interacts.

VALE is a global mining company headquartered in Brazil, with a workforce of over 100,000 employees, including outsourced workers. Its mission is “to transform mineral resources into prosperity and sustainable development”. It guides all of the company’s actions, from strategic planning and risk management to its operations. VALE believes that it shares the responsibility to seek sustainable development wherever it operates by responsibly managing the effects of its activities.

VALE has shown commitment in facing the challenge of climate change. As a practice, the company identifies risks and vulnerabilities directly or indirectly related to its activities in several countries, continuously following the regulatory discussions in the relevant regions for its business. In 2009, Vale has developed a project aimed at identifying and analysing risks and opportunities associated with climate change, as well as the company’s strategic plan for mitigation and adaptation to the new low∞carbon economy.

VALE monitors and is engaged in regulatory discussions at the regional, national and international levels, in hopes that VALE may offer solutions that contribute to the GHG management globally.

For instance, in 2009 VALE launched the “Open Letter to Brazil on Climate Change,” in partnership with the Ethos Institute and the Sustainable Amazonia Forum, which was signed by about 30 large Brazilian companies. In this document, the signatory companies made voluntary commitments to contribute to the global efforts for reducing the impacts of climate change, as well as suggestions for the participation of the Brazilian government in the 15th Conference of the Parties of the United Nations on Climate Change (COP15), and provided ideas for the shaping of the regulatory framework for managing climate change. VALE participates, together with groups such as CNI (National Industry Confederation), IBRAM (Brazilian Mining Institute), Business Working Group for Climate (composed by the companies that have signed the Open Letter to Brazil, and the Ethos Institute and the Amazon Sustainable Forum), Brazilian Forum on Climate Change, CEBDS (Brazilian Business Council for Sustainable Development) and ICMM (International Council on Mining and Metals) in discussions on the development of policies on climate change. The company also contributes to the regulation of Brazil’s National Policy on Climate Change, which became a federal law in December 2009, in order to promote incentives so that businesses and government could reduce emissions through the use of low carbon intensity technologies. Furthermore, VALE participates in the initiative “The Copenhagen Communiqué”. This statement issued by the world’s business leaders, including VALE’s CEO Roger Agnelli, aims to demonstrate the commitment of companies around the world on the climate issue.

VALE Carbon Programme
In 2008, VALE established VALE Carbon Programme, a wide-ranging set of globally coordinated measures, aiming to achieve standards of excellence regarding climate change actions by 2012. Its fundamental principles are: Strategic evaluation of climate change impacts on business, and the company’s capacity-building to operate in a new competitive environment; fostering of GHG emissions reduction and CO2 sequestration initiatives; cooperation and partnership for R&D, and for the implementation of mitigation and adaptation measures in VALE business units; engagement with governments and private sectors to monitor and contribute     in the preparation of the regulatory milestones, and; transparency and continuous improvement. Aligned with this programme, the company develops a project portfolio to reduce GHG emissions in all business areas, in order to diagnose the opportunities and support the implementation of such initiatives. Also in 2009, the company started developing a tool, named “Trend of Net Carbon Balance”, to estimate Vale’s emissions evolution vis∞à∞vis the growth of carbon stock in forests that the company protects or helps in protecting, in order to plan actions to increase removals and preserve forests.

BioVale Consortium
VALE believes in the development of new more efficient products regarding the use of natural resources. One of the projects that better illustrates VALE’s efforts on the matter is the BioVale consortium, for biofuel generation from palm oil together with Biopalma Amazonia SA – which has expertise in palm oil plantation and production – to produce biodiesel from 2014. With this partnership, VALE will use part of the production of palm oil to produce biodiesel. With this initiative, the company is anticipating the rules established by the Brazilian Government for the use of B20 (diesel with 20 percent of biodiesel) by 2020.

This biodiesel will be used to power a fleet of 216 locomotives and the large equipment and machinery of the Carajás mines. The switching from diesel oil to biodiesel will represent an emission reduction of 12 million tons of CO2 in the atmosphere during the 25 years of project,  which is equivalent to the emission of more than 200 thousand cars in that same period. Furthermore, the BioVale consortium will reforest a legal reserve area of 70,000 hectares and create about 6,000 jobs in the Amazon region (Pará state), improving the lives of 2,000 families. Moreover, at the end of 2008, VALE created the ITV (VALE Institute of Technology), which supports the development of R&D projects. Besides that, the company invests in technology through VSE (VALE Energy Solutions), whose main goal is to research and develop systems for distributed energy generation.

VALE Florestar
In 2007, VALE created the VALE Florestar project to promote reforestation on degraded areas in the Amazon region using both native and exotic species, contributing to local social and economic development. Since it began operating, it has invested around R$230m, planting more than 24.5 million trees on 41 leased farms covering an area of approximately 70,000 hectares. VALE Florestar’s operations currently provide around 1,500 direct jobs. During peak production, more than 4,000 direct jobs will be generated.

VALE Florestar will have positive social, economic and environmental impacts for the Amazon region both in the short and long term. Society will gain from new sources of jobs and income and the promotion of a culture concerned with environmental preservation. The environment will benefit from the conservation and restoration of forest areas and reduced impacts on native forests, as well as contributions to regional climate equilibrium. By preserving and restoring forest areas in the Amazon region, VALE Florestar will capture carbon dioxide. This is particularly important given that a large share of Brazilian emissions of greenhouse gases arises from deforestation, forest burning and other land use changes.

Transparency and recognition
VALE is the world’s leading mining company in the ranking published by Goldman Sachs, which analyses opportunities and challenges of climate change. VALE was rated as one of the five most sustainable companies in the sector of basic materials in the GS-Sustain report. In 2009 VALE was awarded the Época Climate Change Prize, promoted by Época (a Brazilian news magazine), as one of the Brazilian companies with most outstanding climate change policy. Furthermore, the company is the best positioned company in the Latin American Index, which assesses the degree of transparency of information on climate change, according to a survey by the Carbon Disclosure Project (CDP). VALE was considered the large mining company with lowest GHG emission intensity by gross revenue.

Finally, in June 2010 VALE´s Greenhouse Gas inventory received the gold stamp of the Brazilian GHG Protocol Program. VALE was the only mining company to receive the gold stamp at this initiative, coordinated by FGV (Fundação Getulio Vargas, Business and Public Administration School). That demonstrates that the company’s GHG inventory is complete and verified by a third party. Three stamps have been established to indicate the degree of deepening of the inventories: bronze, silver and gold. Among the 34 companies participating in the Brazilian GHG Protocol Program, only seven (including VALE) were recognised with the gold stamp.

Further information: www.vale.com