Industry Associations

Industry Associations: the role they play

Industry associations play an important role for Anglo American around the world and have the potential to add real value to our Government Relations and other stakeholder engagement objectives.

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procedures to ensure that if a situation arises where one of our industry associations chooses to advocate in a way which is materially misaligned with Anglo American’s policy positions or interests, we will take action. We will look to tighten further our internal procedures, should the need arise.

Anglo American is committed to being transparent about our political engagement and prohibit the making of donations for political purposes to any politician, political party or related organisation, an official of a political party or candidate for political office in any circumstances, either directly or through third parties, including industry associations. In this respect, we do not favour any political party, group or individual and expect the industry associations of which we are a member to act accordingly. This approach is detailed on page 20 of the Anglo American Code of Conduct.

We take up memberships of, or participate in, industry associations where our involvement will bring value to our business or to the interests of our stakeholders, including investors.

Each industry association is different. Some focus on a thematic mandate and promote best practice in a given domain; others gather a broader set of organisations and represent a sector’s interest to government, policy makers and other stakeholders. Some industry associations represent issues only in one country, others are regional or international in scope. Each has its own origin and history, which form the basis on which their specific priorities and approach are built.

Given this variety, many industry associations were not established to advocate and have never played that role or limit their advocacy to a narrow set of issues. As a consequence, those industry associations do not take public positions on key policy topics, such as climate change or human rights.

Other industry associations provide regular input into the policy making process. Bringing together diverse and varied views, as well as the huge expertise from their members, to help policy makers develop more informed policy. Anglo American believe that the contribution that industry associations make in this way, coordinating, synthesising and harmonising what would otherwise be a great variety of inputs, then acting as a sounding board for government testing ideas and seeking feedback, brings real value to the policy making process.

We recognise that there is an increasing stakeholder interest in industry associations and, in particular, the policy advocacy role that some of them play.

Positions taken by industry associations reflect the consolidated views of the membership and may differ in tone or nuance from those positions taken by Anglo American. Governance arrangements in most industry associations prevent the association representing externally a position on which members of the association disagree strongly. Anglo American works hard to ensure that our voice is heard and our views are reflected within industry associations. None the less, we have strengthened our internal governance

The Value of Industry Associations

ICMM played a crucial role in bringing the mining industry together to contribute to, help to shape and agree the Global Tailings Standard following

the tailings dam disaster in Brazil. That standard will ensure higher overall standards for tailings dams around the world.

In order to improve site-level performance and regular reporting on safety, environmental and social indicators, including partnerships with indigenous peoples, the Minerals Council of Australia has pushed the implementation of the Mining Associations of Canada’s well regarded Towards Sustainable Mining system.

The Chilean Consejo Mineiro has ensured transparency in the mining sector with regards to water usage, through its “Water Platform”. As well as the amounts used, the sources of water supply are also detailed, enabling transparency for any interested parties on this key issue.

The Minerals Council of South Africa has brought together the unions, government and member companies to create a collaborative process that has led to a step change in safety in the South African mining sector, with a 90% reduction in fatalities since 1993.

Governance of our industry association membershipsAnglo American recognises the interest of stakeholders in any advocacy we might undertake or that might be undertaken on our behalf. We are careful about being party to any lobbying and recognise the importance of having strong internal governance overseeing organisations that might undertake lobbying. In this regard our governance of our industry associations is built on three pillars: transparency, high standards, and clear accountability. Running alongside these pillars is the importance of constant monitoring, by each Anglo American employee who manages a relationship with an industry association, supplemented by a biennial independent review and a channel for any concerned individual to raise possible issues direct with Anglo American’s head office.

Transparency

We are committed to being transparent about our memberships of industry associations and we publish on our website all relevant details of the more than 130 memberships we have. Each entry explains why we are a member of that industry association, any positions of responsibility that Anglo American employees play in the association, and Anglo American’s annual financial contribution. This disclosure allows any interested individual to scrutinise details of our memberships and raise any questions or concerns they might have.

With respect to financial contributions, in 2020, we made contributions totalling approximately US$12 million to all but two of our industry associations. The amount disclosed relates to membership fees and/or other payments to associations, including in respect of programmes run by the associations, apart from where reasons of commercial confidentiality require us to withhold disclosure. In addition, in 2020 our contributions to the marketing of diamonds through the Natural Diamond Council (formerly the Diamond Producers Association) and platinum through the Platinum Guild International totalled US$65 million.

High Standards

We expect all of our industry associations, as well as contractors, suppliers and agents, to act in a way which is consistent with the principles contained in the Anglo American Code of Conduct. This is stated clearly in the summary page of the Code.

This expectation is then expanded upon in the “Working with institutional stakeholders” section of the Code, which also makes it clear that our intention is to ensure that there can be no scope for any perception that Anglo American is exercising improper influence through its memberships of industry associations.

Our Business Integrity Policy (http://www.angloamerican.com/~/media/Files/A/Anglo-American-Group/PLC/sustainability/our-strategy/group-business-integrity-policy-eng.pdf) sets out the standards of conduct we expect of all our employees to help manage bribery and corruption risk. We expect our industry associations to follow comparable standards of conduct to those contained in our Business Integrity Policy.

Clear Accountability

Each industry association of which Anglo American is a member has a designated Anglo American employee who acts as the relationship owner with the relevant association. The expectations of that relationship owner are set out in the Group International and Government Relations Policy (see extract at Annex A). These cover:

• The expected level of due diligence with respect to the standards, policies and policy positions of the industry association before membership is entered into.

• Use of influence within the association to ensure that the association acts in a manner consistent with the Anglo American Code of Conduct, Business Integrity Policy and Group Antitrust Policy.

• Use of influence to seek to ensure that policy positions developed by and used as a basis for influencing by the industry association are aligned with Anglo American’s policy positions.

• Where alignment is not possible, to use influence to encourage the industry association to desist from lobbying on that issue.

The policy sets out clearly the process for escalation in the event that a misalignment between Anglo American standards or policy positions is identified.

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The process is as follows:

• To engage directly with the industry association, up to and including senior leadership, as well as other members of the association to encourage corrective action.

• Should no changes be agreed or made after an appropriate time, the misalignment should be escalated first to the Corporate Relations Director of the relevant Anglo American Business Unit.

• If the misalignment persists, the issue should be escalated to the Anglo American Group Head of International Government and Sustainability Relations who may choose to make aware the Group Management Committee, including the Group Chief Executive.

• At each stage, all options for action will be explored, including formerly reviewing, suspending or terminating Anglo American’s membership of the industry association.

Monitoring of industry association memberships

The governance that we have in place should enable us to identify any activity by an industry association that might not be aligned with Anglo American’s policies or practices. Specifically, each Anglo American employee with responsibility for the relationship with an industry association is reminded of their obligations with respect to monitoring the activities of the industry association.

However, we recognise that other interested parties may identify issues of potential concern which the Anglo American relationship owner may not be aware of and, therefore, it is important that we provide others with the opportunity to raise concerns with us. To that end we have provided a channel, through the Anglo American website, for anyone to raise concerns or questions about our memberships, direct to the Anglo American Group International Government and Sustainability Relations team. Any Anglo American employee, contractor, supplier or any other stakeholder who wishes to raise an issue of concern confidentially, is additionally able to do so through the Anglo American “YourVoice” whistleblower service (www.yourvoice.angloamerican.com).

In addition, every two years Anglo American has committed to commissioning, for public disclosure, an independent audit of the alignment between Anglo American standards and policies and those of the industry associations of which Anglo American is a member. The independent nature of this audit aligns with our commitment to governing our industry association memberships with transparency.

The first such audit was published in 2019. The latest edition is published alongside this report.

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Industry Associations – Materiality assessment

We expect all of our industry associations to align with our policy positions or desist from advocating in the specific areas of disagreement. But only some of our associations advocate and a minority advocate on climate and/or human rights policies. As part of the audit into the alignment of industry associations activities with Anglo American policy positions, we commissioned Environmental Resources Management (ERM) to run an independent materiality assessment to enable us to focus more precisely our analysis on those associations of most relevance due to a combination of:• The prominence of the association in the relevant

country or region.• The prominence of Anglo American or one of its

subsidiaries as a member of that association.• That the association takes a public position on climate

and/or human rights.

The list produced by ERM of associations of material importance is below. Full details of those associations’ positions on climate and human rights, including details of the level of alignment between those associations and Anglo American’s climate policy positions, is included in ERM’s audit report.1. Minerals Council of Australia2. Queensland Resource Council3. Australian Resources and Energy Group4. Business Unity South Africa5. Confederation of British Industries6. Consejo Mineiro (Chile)7. Energy Intensive Users Group & Industry Task Team

on Climate Change (South Africa)8. Eurometaux9. Instituto Brasileiro de Mineracao (IBRAM)10. International Copper Association11. International Council on Mining and Metals (ICMM)12. Minerals Council of South Africa13. Mining Association of Canada14. National Business Initiative (South Africa)15. Nickel Association16. Sociedad Nacional de Mineria, Petroleo y

Energia(Peru)17. South African Institite of Mining & Metallurgy (SAIMM)18. World Coal Association

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Most stakeholder attention on this topic has focused on climate policy and the concern that some industry associations are believed to be advocating for policies which are not in support of or promoting the implementation of the Paris Agreement.

Anglo American is committed to conduct lobbying in line with the goals of the Paris Agreement. Our commitment to the Paris Agreement has been clear since 2015 when we signed the Paris Pledge for Action (http://www.parispledgeforaction.org/). The pledge we made demonstrates our willingness to work to support efforts in meeting and exceeding the ambition of governments to keep the world on a trajectory that limits the global warming temperature rise to well below 2 degrees Celsius. Furthermore, in line with our approach to third party lobbying, our intention is that the industry associations of which are a member support this approach and advocate for policies that support the achievement of the Paris Agreement.

To help give greater definition to our approach we have detailed ten policy positions in respect to the following climate-related policy issues:1. Adaptation infrastructure2. Carbon capture, use and storage (CCUS)3. Climate science4. Emissions reduction targets5. The energy trilemma6. Paris agreement7. Price on carbon8. Restricting global warming to 1.5oC9. Technology neutral, free-market energy mix10. Supply chain

More details of each of these can be found in Annex B.

In addition to a focus on climate policy, our monitoring of industry associations has also focused on human rights policy, reflecting Anglo American’s strong commitment in this area. We have eight specific policy positions relating to human rights and we monitor to ensure no material misalignment in respect to advocacy by the industry associations of which we are a member. The issues covered are:• The UN Guiding Principles• Labour and employee rights• Vulnerable groups• Community rights• Voluntary Principles on Security and Human Rights• Leverage• Free, prior and informed consent (FPIC)• Binding Treaty

Details of each can be found in Annex C.

Anglo American Policy Positions

Some industry associations of which Anglo American is a member engage in the policy making process on a diverse range of subjects in a diverse range of geographies.

We would highlight the following findings from the audit:

• A significant majority of the industry associations assessed have no public position in relation to some or all of the Anglo American climate change and human rights policy positions (79% of policy positions tested for climate change and 83% for human rights policy positions tested). This reaffirms the observation made regarding the different types of industry associations, many of which do not take public positions on issues, nor advocate with government or others.

• Material misalignments were found in relation to one industry association, Engineering UK, in respect of allegations made against the Chairman of that association. It is noted, however, that in the course of conducting the audit, the relevant court acquitted the individual concerned. Anglo American was made aware of the allegations and had taken the view that the appropriate course of action was to await the outcome of the judicial process. In light of the outcome, no further action will be taken.

• The mapping of the 18 industry associations of material importance with those climate change policy positions which fell into the category where there was not full alignment, and/or the industry association is silent on some element of the Anglo American position provides a valuable basis on which to engage with each of the industry associations.

Queensland Resource Council

The audit identified the political advocacy undertaken in 2020 by the Queensland Resource Council (QRC) with a campaign to “vote Greens last” as an issue of concern in respect of political advocacy linked to climate change. Whilst not within the strict parameters of the scope of work, the issue is clearly relevant. ERM advised Anglo American to engage with the QRC on the issue.

Anglo American had engaged from the outset in discussions with other members of the QRC and the QRC itself. Our approach had two elements. The first was to advise the QRC that our membership was under review because of the decision to proceed with the “vote Greens last” campaign. As ERM’s audit demonstrates, the campaign was changed shortly after its launch. In addition, the Anglo American team worked with the QRC Board to develop a policy with respect to political campaigns that will prevent a reoccurrence of the problem.

Within Anglo American, the escalation process was used, with the Director of Corporate Relations for our Australia business informing the Group Head of International Government and Sustainability Relations who, in turn, informed the Group Chief Executive.

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Findings and actions stemming from ERM’s Independent Audit

The independent audit published alongside this report is a helpful contribution to our monitoring of the actions of our industry associations.

Next Steps

Anglo American recognises the importance of ensuring continued vigilance on this issue, meaning that the absence of material misalignments is welcome, but ongoing action is necessary. We are confident, however, that the existing governance structure is appropriate.

The mapping provided by the ERM audit in respect of the associations of material importance provides the ideal basis to engage with those associations to discuss where there might be some misalignment, or gap. The detail has been shared with the Anglo American relationship owners for them to use in their engagement.

The next independent audit of our memberships will be conducted ahead of the 2023 Annual General Meeting.

Annex A:

Group International and Government Relations Policy – Extract

Industry Associations

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In the event that a misalignment between Anglo American standards or policy positions is identified, the employee responsible for managing the relationship with the industry association should engage directly with the industry association, up to and including the senior leadership, as well as the other members of the association, to highlight the perceived misalignment and encourage any necessary corrective action. Should no changes be agreed or be made after an appropriate time, the misalignment should be escalated first to the Corporate Relations Director of the Business Unit and then to Group Head IGR. In the event of persistent misalignment which is deemed to risk reputational or other damage to Anglo American, all options will be explored, including suspending or terminating membership of the industry association.

In addition, every two years IGR will commission, for public disclosure, an independent audit of the alignment between Anglo American standards and policies, and those of the industry associations of which Anglo American is a member.

In the event that a new membership is proposed, the employee proposing that membership should carry out due diligence covering:

• Assessment of how the industry association’s approach is consistent with the Code of Conduct.

• Assessment of whether the industry association’s standards are aligned with those laid out in the Anglo American Group Business Integrity Policy.

• Adhere to the Group Antitrust Policy and associated Procedures in respect of joining the industry association (in particular, obtaining prior approval from Group Legal to participate in the industry association).

• Assessment of the alignment of the industry association’s policy positions with Anglo American’s policy positions.

Following this due diligence, the proposed membership should be endorsed by the Head of the Business Unit and – if annual membership of the industry association is more than US$25,000 – the Group Head of IGSR.

Industry associations play an important role for Anglo American around the world and have the potential to add real value to our Government Relations and other objectives. Our memberships of, and partnerships with, industry associations allow us to share best practice and be well informed on relevant technical, political and social developments. They also offer a route for Anglo American’s voice to be amplified alongside peer companies in policy and other debates.

However, as with the relationships we have with suppliers, contractors, agents or advisers, it is important that our relationships with industry associations are well governed to ensure that we maximise the benefits for Anglo American and minimise risk to us, including reputational risk. To this end, Anglo American publishes the details of all our memberships on the website, including a rationale for each membership, demonstrating our commitment to transparency on this issue.

In addition, any Anglo American employee who manages our relationship with an industry association must:

• Use their influence within the industry association to ensure that the association acts in a way which is consistent with the Code of Conduct.

• Use their influence within the industry association to seek to secure alignment between the association and the standards laid down in the Anglo American Group Business Integrity Policy.

• Use their influence within the industry association to seek to ensure that policy positions developed by and used as a basis for influencing by the industry association are aligned with Anglo American’s policy positions. Where alignment is not possible, to use their influence to encourage the industry association to desist from lobbying on that policy.

• Adhere to the Group Antitrust Policy and associated Procedures in respect of joining and participating in industry associations.

Annex B:

Climate Change Policy Positions

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Climate Change

Adaptation Infrastructure

Anglo American recognises the complex global challenge posed by climate change and our responsibility to take action to address its causes and protect our employees, assets and host communities, against its potential impacts. Extreme weather and climate change increasingly impact our operations and communities, and we seek to embed controls and adaptation for resilience against the risks.

CCS The world needs solutions that reduce our carbon footprint such Carbon Capture and Storage (CCS). According to the IPCC, reaching the climate goal of limiting the increase in global temperature to 2°C will be 138% more expensive without CCS. We support investment in research and development, including greater provision of public-private funding and for the deployment of CCS and carbon capture, sequestration and reuse (CCR) technologies and treatment of CCS on a comparable basis to other technologies that abate carbon emissions.

Climate Science

We see climate change as one of the defining challenges of our era. We recognise the science of climate change and acknowledge that we have a role to play in limiting global warming to 2 degrees.

Emissions reduction targets

We are committed to reducing our own carbon emissions and energy use. We have set ourselves the target of achieving carbon neutrality across our operations before 2040 and are aiming to have eight of our assets carbon neutral by 2030. By 2030 we seek to achieve a 30% improvement in energy efficiency and an absolute 30% reduction in GHGs.

The energy trilemma

There is a contemporary role for responsible and efficient coal mining. It contributes meaningfully to electricity in many developing countries and an energy transition will take time. Thermal coal makes up 37% of the global electricity mix, according to the IEA. It provides an affordable, readily available and reliable form of power generation that many countries, particularly in the developing world, continue to depend on to alleviate poverty and promote growth. We recognise that combustion efficiencies must play a critical role in reducing emissions, as they have the potential to almost halve carbon emissions from coal fired power stations.

Paris Agreement

We welcomed the Paris climate agreement signed in December 2015 at COP21. Anglo American is a signatory to the Paris Pledge for Action. We will work with governments, industry peers and civil society, both directly and through industry organisations, to support the development of effective and efficient policies.

Price on carbon

We support the use of fair and well-designed market-based instruments, such as carbon pricing. In regions where carbon pricing is an existing or emerging policy, we include carbon pricing in our budgets and project evaluations. We are supportive of the development of consistent policies across jurisdictions.

Restricting global warming to 1.5 degrees

We support the clear, global and binding agreement to mitigate the impacts of climate change, limit global warming to 2 degrees above pre-industrial levels, with an aim of no more than 1.5 degrees and enable actions at regional and national levels.

Technology neutral, freemarket energy mix

We support an honest, fact-based and open dialogue that engages all relevant parties, including utility companies, on how current fossil fuel producers and users can shape the future energy mix and be part of the transition to the low-carbon economy. Given that we are the world’s largest producer of PGMs, we actively support and invest in the development of hydrogen fuel cell technologies through a range of partnerships, including the Hydrogen Council. We believe that hydrogen fuel cells have a significant role to play in a low carbon future, for example in the development of clean long-distance ground transportation. Hydrogen itself also has a key role to play, through its use in heating and many other energy intense applications.

Supply chain

We aim to ensure that the goods and services we procure do not cause harm to individuals or the environment. At a minimum, we expect suppliers to demonstrate compliance with all local laws and regulations, as well as good practices, in all areas, including climate change.

Annex C:

Human Rights Policy Positions

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Human Rights

United NationsGuidingPrinciples

We fully commit to implementing the UN Guiding Principles on Business and Human Rights. Where we have caused or contributed to adverse human rights impacts we believe in contributing to remediation as appropriate.

Labour andemployeerights

As signatories to the United Nations Global Compact, we are committed to the labour rights principles set out in the International Labour Organization core conventions, including the right to freedom of association and collective bargaining, non-discrimination, and the eradication of child and forced labour. Observance of these rights is required of all our operations and suppliers, irrespective of location.We recognise our responsibility to ensure that within our collective supply chains the purchasing of goods and services is done without inadvertently exploiting human rights and is free of modern slavery.As signatories of the Living Wage foundation in the UK, we believe in going further than the government minimum wage to make sure all staff earn enough to live on.

VulnerableGroups

We pay special attention to the rights of vulnerable groups including; indigenous peoples, women, national or ethnic minorities, religious and linguistic minorities, children, persons with disabilities, and migrant workers and their families.We acknowledge the role of human rights defenders including through safeguarding human rights; the rule of law; and healthy, functioning markets.Underpinned by our Values and our Code of Conduct, we believe in the promotion of an inclusive environment where every colleague is valued and respected for who they are, and has the opportunity to fulfil their potential. We support the need to set appropriate global goals for the diversity of gender and culture and ensure continuous improvement.

CommunityRights

The needs and concerns of all our stakeholders informs and guides our approach to doing business. We aim to make a lasting, positive contribution to the countries and communities in which we operate. We seek to create and maintain mutually beneficial relationships by understanding and maximising the positive influence we can have on local, regional and national development.Specifically in relation to community complaints and grievances, we ensure that our managed operations procedures align with the UNGP effectiveness criteria including communicating that the existence of complaints and grievance mechanisms do not preclude the right of stakeholders to engage in judicial or other legitimate processes, in which Anglo American is committed to cooperate.

VoluntaryPrinciples onSecurity andHumanRights

Anglo American promotes the Voluntary Principles on Security and Human Rights (VPSHR) at both international and local level. The company remains strongly committed to implementing the VPs and applies them in all relevant managed operations, recognising that our operations may be located where there are pre-existing, possibly violent, underlying or potential conflicts that can adversely affect local communities, Anglo American’s employees operations, and the relations between them.

Leverage Anglo American is committed to promoting adherence to human rights within our own operations and encouraging adherence at independently managed joint ventures. Wherever possible we will work to encourage positive change through exercising our influence.

Free Prior and Informed Consent (FPIC)

Anglo American is committed to the ICMM Position Statement on Indigenous Peoples. As such, our project approval processes require that Indigenous Peoples are: (i) able to freely make decisions without coercion, intimidation or manipulation; (ii) given sufficient time to be involved in project decision making before key decisions are made and impacts occur; and (iii) fully informed about the project and its potential impacts and benefits. The Anglo American Social Way 3.0 reaffirms our commitment and provides practical guidance on how to achieve FPIC.

BindingTreaty

Anglo American remains committed to voluntary implementation of the UN Guiding Principles (integrating human rights due diligence in our risk processes; training and awareness- raising for our employees; and communicating, monitoring and reporting on our progress).