The recent merger talks between two mining giants—Glencore and Rio Tinto—signal a major shift in the global market. The merger, though now discontinued, was a strategic move aimed at creating a powerhouse focused on electric metals crucial to the global low-carbon economy.
These metals, including copper, nickel, and cobalt, are key components in the development of electric vehicles (EVs), renewable energy infrastructure, and other clean technologies that are central to the global energy transition.
The Strategic Merger Discontinued: But Climate Commitments Persist
Glencore and Rio Tinto recently engaged in months-long merger talks, signaling a shift in Rio’s previously cautious approach to mega-deals. A decade after Rio rejected Glencore’s proposal, the mining giants revisited discussions amidst an industry-wide push for consolidation in energy transition metals.
Changes in leadership, strategy, and market dynamics—alongside pressure from BHP’s bold moves—catalyzed these talks. Although the discussions are currently inactive, Rio’s openness to Glencore highlights evolving priorities as both companies adapt to global decarbonization demands.
The news fuels speculation of an impending wave of mergers and acquisitions across the mining sector.
The potential merger between Glencore and Rio Tinto is more than just asset consolidation. It is also about positioning both companies at the forefront of the green energy revolution.
The focus was on strengthening their leadership in the production of essential transition metals like copper and nickel. These metals are vital for EV batteries, renewable energy storage, and electrified transportation networks. As the world moves towards electrification, ensuring a sustainable, reliable supply of these metals is important.
Both companies share a commitment to the goals of the Paris Agreement. Together, they pledged to reduce their carbon emissions and ensure that their efforts to supply clean energy solutions won’t contribute to the environmental challenges they seek to address.
Glencore’s Commitment to Electric Metals and Decarbonization
Glencore has long been a leader in mining and is heavily invested in producing metals crucial for the transition to a low-carbon future. The company focuses on metals like copper, nickel, and cobalt, which are integral to the electrification of the world’s infrastructure.
With the global rise in electric vehicle production and the expansion of renewable energy sources, Glencore’s strategic approach centers on securing a stable and sustainable supply of these key transition commodities.
A standout focus is on nickel, which is used extensively in EV batteries. As the demand for EVs continues to surge, Glencore has committed to increasing its nickel production.
In its 2024-2026 Climate Action Transition Plan (CATP), Glencore outlined ambitious plans to achieve net-zero Scope 1 and 2 emissions by 2050. The plan incorporates a range of strategies aimed at reducing emissions across its operations while ensuring the continued availability of critical metals, with the following target based on 2019 baselines:
- 2026: 15% reduction in Scope 1, 2, and 3 CO₂e emissions by end-2026.
- 2030: 25% reduction by end-2030 (new interim target added based on stakeholder feedback).
- 2035: 50% reduction by end-2035.
Glencore’s net-zero emissions strategy prioritizes reducing emissions while using carbon credits for residual emissions, aligned with the Paris Agreement. As seen below, the mining giant’s footprint in 2023 has increased from 2022 but is 22% less than 2019 levels.
Glencore’s approach to decarbonization extends beyond just emissions reduction. It is also focused on transitioning its entire industrial portfolio to support the global energy transition. The company has committed to a holistic decarbonization strategy that includes reducing its combined Scope 1, 2, and 3 emissions.
Rio Tinto’s $6 Billion Decarbonization Pledge
Similarly, Rio Tinto has long recognized the importance of electric metals in the global transition to clean energy. The company has significantly ramped up its production of copper and lithium—two metals that are pivotal for EV batteries and renewable energy storage.
The world’s second-largest metals and mining corporation also aims to reach net zero emissions by 2050, with this roadmap:
In January 2025, Rio Tinto announced the establishment of a standalone lithium division, following its $6.7 billion acquisition of Arcadium Lithium. This move solidified Rio Tinto’s position as the 3rd-largest global producer of lithium vital for the development of high-capacity batteries.
The company’s strategy is aimed at meeting the accelerating demand for electric metals as more countries commit to electrification.
Like Glencore, Rio Tinto has committed to ambitious decarbonization goals. The company aims to reduce its Scope 1 and 2 emissions by 15% by 2025 and by 50% by 2030.
To achieve these targets, Rio Tinto has pledged $5–6 billion in decarbonization initiatives, focusing on energy transition efforts, renewable energy adoption, and advancements in clean technologies for mining processes.
In 2023, the company spent $425 million on decarbonization projects, including transitioning mining equipment to renewable energy sources and repowering its aluminum operations. For the same year, the miner’s Scope 1 and 2 emissions totaled 32.6 Mt CO2e, a 6% reduction from the 2018 baseline of 34.5 Mt CO2e and slightly below the adjusted 2022 figure of 32.7 Mt CO2e.
The company’s emissions abatement projects outpaced growth from higher production, leading to a minor decrease on a like-for-like basis. However, emissions were slightly higher than the actual 2022 total of 32.3 Mt CO2e due to recent acquisitions of additional equity.
Future Prospects: Meeting the Rising Demand for Clean Energy Materials
Although merger talks between Glencore and Rio Tinto were ultimately discontinued in January 2025, both companies remain key players in the global mining and energy transition sectors. Their strategies continue to strengthen their positions in the electric metals market.
The merging of their expertise and resources would have allowed them to combine their mining operations and expertise. This could have given them an edge in the low-carbon energy transition.
Looking forward, both Glencore and Rio Tinto will continue to focus on expanding their portfolios of electric metals and achieving their decarbonization and net-zero targets. As more countries and industries pivot to sustainable energy, these companies will be critical in ensuring a steady supply of the metals required for a low-carbon world.
The post Can a Rio Tinto-Glencore Merger Supercharge the Race to Net Zero? appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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