Sustainability Report 2021

IGO’S CLIMATE CHANGE-RELATED RISKS AND OPPORTUNITIES Topic Description of risk/opportunity Management actions and plans Policy Opportunities Climate-related legislation is increasing across many jurisdictions, intended to drive resource-efficiency and uptake of low-emissions technologies. This is expected to increase demand for electrification of infrastructure, renewable energy and battery storage technologies, presenting a strong opportunity to increase sales volumes and commercial value of our products. IGO’s core business strategy is focused on supplying markets transitioning to cleaner and more efficient operations. IGO’s existing 100% owned Nova nickel- copper-cobalt Operation is strongly aligned with this strategy, and our organic growth plans also firmly focus on the discovery of metal deposits critical to clean energy (prioritising nickel, copper and lithium but also considering other commodity opportunities). Risks – Short-term Nova Operation (100% IGO-owned) reports energy and emissions to Australia’s Clean Energy Regulator under the National Greenhouse and Energy Reporting Scheme. Nova Scope 1 emissions of 68kt CO 2 -e are currently well below the 100kt CO 2 -e threshold for the safeguard mechanism (SGM). IGO may be more substantially impacted by climate- related policy developments over the remaining life of this Operation. State based climate legislation is evolving in Western Australia where Nova is located, and the federal policy response to meet Paris commitments remains uncertain. Tighter baselines under the current SGM, changes to diesel fuel tax credits and passed-through costs from suppliers may all impact on IGO’s operating margins. IGO’s legal and sustainability teams monitor policy developments on an ongoing basis for potential impacts on the business. Scenario analysis completed in FY20 included stress testing our near-term margins using a high-side carbon price and removal of fuel tax credits to better understand our position (see Scenario analysis section on page 69 for more details). IGO’s carbon neutral approach to reducing our operating emissions also serves to mitigate direct cost exposures to near-term carbon pricing developments. Operating emissions arise largely from diesel consumption at Nova and reducing reliance on this fuel is a priority. The completion of a hybrid solar PV‐ diesel electricity generation plant in November 2019 has materially reduced diesel consumption, with 11% of the Operation’s power needs met by solar in FY21. This figure is a slight increase on FY20 results as the plant was in operation for the full year, however we did experience an unexpected inverter failure, which impacted FY21 renewable generation and results. Improvements are being prioritised in FY22. We also continue to review options to cost-effectively electrify the underground mining fleet. Risks – Medium to long-term Discoveries and subsequent development plans resulting from our exploration activities in Australia and overseas may be subject to climate-related legislation e.g. carbon pricing, environmental licence conditions and more stringent water regulations. The use of renewables (as implemented with our solar farm at the Nova Operation) and associated battery technology is intended to be standard practice at new IGO-managed mines, reducing emissions intensity and potential liability under carbon pricing programs. An internal carbon pricing mechanism has been developed in FY21 to support relevant decision making as our business evolves in the medium to long-term. More information on IGO’s internal carbon price is disclosed on page 62. We also maintain a dedicated water management standard which applies to all IGO managed mine sites and operations licenced to extract or utilise surface and ground water. These sites are required to explicitly consider impact on water resources in risk assessments and maintain a site-specific water balance and water management plan. Where we are entering into joint ventures, we work closely with our partners towards the same standards. Our Response to Climate Change 66 —IGO SUSTAINABILITY REPORT 2021