Background

The great majority of scientific opinion concludes that it is most likely that human actions are the cause of global warming, through emissions of greenhouse gases, which are mostly CO2 (carbon dioxide). The detrimental effects of carbon dioxide and other greenhouse gases on climate change can no longer be denied. Hence, the world economy is changing from being fossil fuel- and carbon-based to being carbon-constrained.

The resultant management of carbon can be seen as a holistic, systematic approach or thinking related to greenhouse gas (GHG) emissions, and the impact this will have on company strategy, asset value and activities. As a global player, Gold Fields has been actively aligning the company and its operations with the low carbon world economy since as far back as 2005. In an attempt to ensure business success and sustainability in what is undoubtedly a carbon constrained future, Gold Fields has started implementing a comprehensive, forward-thinking carbon management strategy. To get to this point, in generating the carbon management strategy, a wide range of issues was analysed with respect to the impact of climate change on Gold Fields. By implementing what we believe to be best practice in the management of carbon going forward, Gold Fields intends delivering measurable financial value through the integration of a progressive carbon management strategy into both short- and long-term business decisions.

Accordingly, in order to succeed, the carbon management strategy needs to interrogate how climate change related risks can be mitigated, and how relevant opportunities can be exploited; it needs to reflect stakeholders’ expectations and it needs to support, and be underpinned by, the company’s broader vision, values and goals before being integrated into Gold Fields’ overall corporate strategy.

All the countries in which Gold Fields currently operates, with the exception of Australia, are developing countries, classified as Non-Annex I countries under the Kyoto Protocol, which came into force in 2005, as part of an international environmental treaty aimed at stabilising greenhouse gas concentrations in the atmosphere, at a level that would prevent dangerous human interference with the climate system.

The Protocol runs out in 2012; negotiations on its replacement were held in Copenhagen in December 2009, the outcome of which was the Copenhagen Accord – the document that delegates at the United Nations Climate Change Conference (UNCCC) agreed to "take note of" at the final plenary session of the Conference on 18 December 2009 (COP-15). It is a draft COP decision and, when approved, will be operational immediately.
The Accord, drafted by, on the one hand, the United States and on the other, in a united position as the BASIC countries: China, India, South Africa and Brazil, is not legally binding and does not commit countries to agree to a binding successor to the Kyoto Protocol, whose present round ends in 2012. As part of its many sub-clauses, the Accord endorses the continuation of the Kyoto Protocol and highlights that climate change is one of the greatest challenges of our time and emphasises a "strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities".

For Gold Fields, the two main areas of interest emanating from the Copenhagen Summit are:

• Agreement on emissions between developed and developing countries; and
• The likely reform of the CDM project system, which currently allows developed countries (such as Australia), which have emission caps, to achieve their emission reduction targets cost by buying carbon credits generated by savings in developing countries (such as South Africa and Ghana).

Going into the Summit, South Africa stated that it wanted to cut emissions by 34% below current expected levels by 2020. This is equivalent to an absolute emissions cut of about 18% below 1990 levels, by 2020.

As of 4 January 2010, 138 countries had signed the agreement.