“The goals of the Paris Climate Agreement are at risk if investors remain passive and do not urgently engage with this systemically important sector that underpins nearly half of the global economy,” says Chair of global investor-led commission, as new report sets foundations for action.
- The supply of metals and minerals for the renewable energy sector must triple by 2050 to meet expected demands of the net zero transition and to avoid the worst impacts of climate change.
- To increase supply at the scale and pace required, the industry as a whole – despite its significant economic benefits to many mineral-rich countries – must overcome the major social and environmental issues that continue to threaten both its social licence to operate and its access to vital long-term capital.
- The report highlights six key interventions to reshape investors’ role in the mining value chain – including driving best practice standards industry-wide, fairer benefits for communities, engaging on conflict, positive legacies, including from mine closure, and provision of capital.
Tuesday, 8th October 2024. A landmark report from the USD $15 trillion-backed Global Investor Commission on Mining 2030 has, today, identified six foundational priorities* for investors seeking to support an environmentally and socially responsible mining sector that can meet global demand for minerals and the goals of the Paris Agreement.
Without a sufficient supply of metals and minerals for clean energy technologies and a managed decline of coal production, the world will not achieve net zero targets. The ‘Landscape Report: The Role of Investors in Realising an Environmentally and Socially Responsible Mining Industry’ recommends that investors focus on capital allocation, on supporting equitable benefit distribution, on driving best practice standard-setting and compliance, on addressing conflict and on engagement and collaboration across sectors that can drive real change. The recommendations prioritise areas where investors have the greatest potential to make a positive impact at scale.
Launched in 2022, the Global Investor Commission on Mining 2030 has gained the support of investors representing USD $15 trillion in assets under management. These investors include Allianz Investment Management, Brunel Pension Partnership, the Church of England Pensions Board, LGIM, Orion Resource Partners, Scottish Widows, Swedish National Pension Funds (AP1-4) Ninety-One and Royal London Asset Management. Its multi-stakeholder Commission includes representatives from a broad cross-section of geographies and mining stakeholder groups.
The report lays the foundations for investors to better understand the mining ecosystem and the levers they can pull to shape the industry and its value chains. In line with its vision to achieve a more socially and environmentally responsible mining sector by 2030 to meet the needs of society and the transition, the investor-led Commission will seek to*:
- Align investor expectations of companies with global and mining industry standards.
- Ensure demand-side companies align with these expectations and work towards circularity and traceability.
- Encourage regulation to reinforce investor expectations.
- Deliver fair, equitable and sustained benefits locally and nationally.
- Identify and reduce mining-related conflict and its drivers.
- Address historic legacies and create positive legacies for current operations.
The Commission will now begin consulting stakeholders on the development of practical implementation plans before publishing its final recommendations for investors in mid-2025.
Adam Matthews, Chair of the Commission & Chief Responsible Investment Officer for the Church of England Pensions Board and member of the UN Secretary-General’s Advisory Panel on Critical Energy Transition Minerals, said:
“The goals of the Paris Climate Agreement are at risk if investors remain passive and do not urgently engage with this systemically important sector that underpins nearly half of the global economy.
“As investors, we must take a strategic approach to reshaping our role with the mining sector. We need to work with the sector, governments and key stakeholders to fashion a long-term relationship that drives greater benefits for local communities, that addresses and mitigates the negative social and environmental impacts associated with the industry and that leaves a positive legacy whilst meeting global demand responsibly.
“The Commission does not shy away from difficult issues such as how we invest, how we address legacy issues and the relationship between extraction and conflict. The Commission recognises investors’ vital role in ensuring that socially responsible mining becomes the norm and not simply the preserve of a few committed companies.”
Fredric Nyström, Head of Sustainability and Governance, AP3, said:
“Many investors are underweighted in mining because of the industry’s tough legacy around human rights abuses, and a whole spectrum of environmental, social and governance issues. Yet this is the one sector where we truly need sustainable development and impactful engagement if the climate transition is going to be successful. Investors shouldn’t shy away from the sector just because it’s challenging.
“This report, and the future work of the Mining 2030 commission, will support us and the rest of the investment community with a direction of travel to collectively address the sector’s systemic risks and opportunities.”
David Vickers, Chief Investment Officer for Brunel Pension Partnership and Member of the Investor Commission, said:
“The report rightly identifies the centrality of mining to the global economy both today and long into the future – and the pivotal role finance must play in enabling mining to be a leading part of the transition to a Net Zero world. That will mean both addressing negative social and environmental impacts and shaping the industry to meet the rapidly growing demand for transition minerals, such as for batteries. Such a broad and complex challenge requires a multi-pronged approach across capital allocation, stewardship, policy engagement and more. On that basis, I am very pleased to note the report’s wide-ranging ambitions.”
George Cheveley, Co-Portfolio Manager, Global Natural Resources, Ninety One, said:
“Mining and mine development are critical enablers of the energy transition. As a capital intensive sector, investor support is essential. Ninety One welcomes this initial report which establishes a framework for investors to engage with this crucial industry and its many stakeholders. As a global investment manager with an emerging market heritage, and as a large investor in emerging markets, engagement and improvement of this sector is vital, as divestment does not provide any solutions and will slow down progress on the energy transition.”
Patrick Peura, Head of Investment Stewardship and Engagement, Allianz Investment Management, said:
“As an investor committed to achieving net zero in our proprietary portfolio, we support the real economy’s transition to a decarbonised world. This transition demands significant amounts of critical minerals and metals, which can later be reused, recycled, or upcycled to reduce our reliance on fossil fuels. However, current projected trajectories of metal and minerals mining indicates insufficient supplies to meet the needs of the transition. This necessitates more mining to meet demand. This can benefit society and the economy, but requires effective collaboration between stakeholders and the mining industry. The Mining 2030 initiative is taking a first step in this direction.”
Oskar Lewnowski, Founder and Group CEO, Orion Resource Partners, said:
“For mining to fulfil the promise in the world of decarbonisation goals, it cannot mine the same way it has over the past 100 years. Sustainability needs to be enhanced, which will only happen with strong leadership and clear expectations.”
Eva Cairns, Head of Responsible Investment, Scottish Widows, said:
“The mining industry is fundamental to the energy transition to net zero. In their 2024 Global Critical Minerals Outlook, the IEA highlighted that mineral demand for clean energy technologies will need to almost triple by 2030 to achieve their net zero scenario. Even in a scenario that reflects today’s policies, mineral demand doubles by 2030. Lithium sees the biggest growth as an essential input to electric vehicle batteries. Investors have a critical role to play in engaging the industry to tackle the social and environmental challenges it is associated with. It is fantastic to see this comprehensive report lay out the levers to do so.”
Ashley Hamilton Claxton, Head of Responsible Investment, Royal London Asset Management, said:
“The green energy transition is crucial for a sustainable future, but it hinges on the responsible extraction of critical minerals. Investors play a vital role in promoting ethical mining practices and ensuring that operations respect human rights and Indigenous territories. The report helps investors understand this complex but important sector better so that we can support a just transition in the mining sector that benefits both people and the planet.”
The Commission builds on the experience of the investor-led response following the 2019 Brumadinho disaster that resulted in the loss of 272 lives. The response led to new disclosures and supported the creation, together with the International Council on Mining and Metals (ICMM) and the United Nations Environment Programme (UNEP), of the Global Industry Standard on Tailings Management, which 116 mining companies representing 64% of the industry by market capitalisation have committed to implement.
ENDS
Notes to editor
*The six strategic objectives in full are to:
- Improve company social and environmental performance by developing investor expectations aligned with global industry standards.
- Improve company social and environmental performance, including wider application of circularity principles, by aligning value chain industries with investor expectations.
- Improve company social and environmental performance by strengthening regulation and institutional frameworks to reinforce investor expectations.
- Create more equitable and sustained benefits at local and national levels through improved fairness and transparency in decision-making and benefit distribution.
- Reduce mining as a driver of conflict through improved identification and management of risks linked to mining-related impacts and revenues.
- Drive safe and responsible mine closure and the creation of positive legacies for existing mining operations and address historic legacies of mining.
For more information or to speak with a spokesperson for the Global Investor Commission on Mining 2030 please contact:
- Mike Marshall, ESG Communications
t: + 44 (0)7728 816426 | e: mikem@esgcomms.com - More details on the Global Investor Commission on Mining 2030 are available at: https://mining2030.org/
The ‘Landscape Report: The Role of Institutional Investors in Realising an Environmentally and Socially Responsible Mining Industry’ can be downloaded from: https://mining2030.org/resources/
About the Global Investor Commission on Mining 2030
The Global Investor Commission on Mining 2030 is a collaborative investor-led initiative seeking to define a vision for a socially and environmentally responsible mining sector overall by 2030, and to develop a consensus about the role of finance in realising this vision. It recognises the mining industry’s important role in society and the transition to a low carbon economy and aims to ensure the sector leaves a positive legacy by addressing key systemic risks holistically. https://mining2030.org/
The Commission secretariat is provided by Chronos Sustainability, which has led the research and engagement process that has underpinned the ‘Landscape Report: The Role of Investors in Realising an Environmentally and Socially Responsible Mining Industry.’ https://www.chronossustainability.com/