Fortescue to link bonuses to climate goals

Billionaire Andrew Forrest says Fortescue stands alone with its ambitious climate targets.

Billionaire Andrew Forrest says Fortescue stands alone with its ambitious climate targets. Photo: AAP

Mining giant Fortescue Metals Group will directly link executive bonuses to meeting emissions reduction targets as it pushes towards decarbonisation.

Addressing the company’s annual general meeting in Perth on Tuesday, billionaire executive chairman Andrew Forrest said the bonus scheme would reinforce Fortescue’s ambitious plan to achieve zero emissions by 2030.

“We will not ignore the heating climate at the boardroom table,” he told shareholders.

“Delivering against world-leading emissions reductions targets will form a critical element of our incentive structures for executives.”

Impact would be ‘very meaningful’

Dr Forrest later told reporters the details were still being worked through but the impact would be “very meaningful” across the iron ore business and Fortescue Future Industries.

He said Fortescue, bolstered by the addition of the Iron Bridge project near Port Hedland, was on track for another bumper year after shipping a record 189 million tonnes of ore last financial year.

But with the company transitioning towards green energy and resources, Dr Forrest warned there would be a renewed focus on frugality.

“We’re slimming down to strengthen up for the battles ahead … stepping beyond fossil fuels,” he said.

“We will not slavishly produce more and more tonnes like our competitors seem hellbent on doing. We’ll improve the value of each tonne.”

Fortescue’s net profit down 40 per cent

Fortescue’s earnings slumped in the 12 months to June 30 amid global economic disruption and weak iron ore prices.

Its net profit after tax was down 40 per cent at $9 billion.

Australia’s third-largest miner will spend $US6.2 billion ($9.4 billion) on decarbonising by 2030, an investment Dr Forrest said would ultimately pay off for shareholders.

He said executives who were not driving down emissions had either a vested interest or were “simply lazy”.

“They need shareholders to push them and hold them to account,” he said.

“We’ve attached remuneration to going green. They’ve all got to do it too.”

Need for more WA government action

He said there was also a need for greater action from the West Australian government, which has set interim reduction targets for its emissions but not those of the broader economy.

The McGowan government has conceded it will likely need to import coal from NSW in coming years as it manages the looming closure of its own coal-fired power stations.

“I’d say they’re really smoking high-grade drugs and they should rethink that,” Dr Forrest said.

Having returned to the helm in May after former chief executive Elizabeth Gaines stepped down to a director’s role, Dr Forrest said he was in no rush to install a new iron ore boss.

“I’ve come back in because we’re going through this phenomenal period of transition,” he said.

“We have some really great people out there … I can say we’re in no hurry but I’m delighted with the standard of the candidature.”


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