Investors push mining companies to adopt better sustainability standards

The newly-launched Global Investor Commission on Mining 2030 said it would introduce sustainability standards by next January which will seek to overhaul the mining industry this decade. Areas of focus would include waste management, biodiversity protection, child labor and the role minerals play in driving conflict.

Investors, banks and insurers are expected to pressure miners to agree to follow the standard. A recent report from climate disclosure nonprofit CDP found that investor campaigns for change have been successful, with companies 2.3 times more likely to publish information after financial institutions pressured them to disclose.

The Principles for Responsible Investment investor network, representing more than $120 trillion under management, is backing the effort. The United Nations Environment Program is advising and chief executives of three of the biggest global miners—Anglo American PLC, BHP Group Ltd. and Rio Tinto Ltd.—voiced their support at Wednesday’s launch.

Centering sustainability standards in the industry will help boost efficiency as miners turn to lower-grade mineral deposits across the world to meet demand for the energy transition, which will spur more mining activity, BHP Chief Executive Mike Henry said.

“We’ll improve the practices and outcomes in the mining industry more quickly," he said.

The rules will draw on lessons from investors and the mining industry’s development of the Global Industry Standard on Tailings Management. Tailings are the leftover materials from mining that can dangerously pile up at sites. The U.N. announced a group this week to oversee the audit of tailings at mine sites under those standards.

The tailings standard came out about two years ago following the 2019 Vale SA Brumadinho disaster in Brazil where a tailings dam collapsed and killed 270 people. BHP, Anglo American, Glencore PLC, Rio Tinto and Vale are among the large mining companies that have agreed to follow that standard.

The rule-making echoes efforts already made within the industry to help improve mining standards, albeit on a smaller scale, such as with the Copper Mark. The London-based institution has a 32-criteria standard which includes rules on forced labor, tailings management and the environment which producers have to meet to become certified by the Mark, with the overall aim of moving toward responsible sourcing of key goods.

Many mined commodities are essential for helping the world reach net zero greenhouse gas emissions by 2050. Demand is expected to surge 500% by 2050 for the metals and minerals needed to make clean energy technologies, such as lithium, nickel and graphite, according to the World Bank.

However, mining is the fourth-biggest driver of deforestation and responsible for 7% of tropical and subtropical forest loss, the World Bank said. The industry is also facing pressure from investors, governments and climate activists for clearing habitats and polluting air and water, particularly in developing countries in South America, Southeast Asia and Africa.

“That’s the challenge here because the low carbon transition needs a massive scaling of mining," said Adam Matthews, chair of the Global Investor Commission on Mining 2030 and chief responsible investment officer of the Church of England Pensions Board.

“Regardless of whether we can recycle existing minerals, regardless if we can be more efficient or if we can replace the minerals that are being mined with others, we are going to need a massive scale of mining," Mr. Matthews said.

 

This story has been published from a wire agency feed without modifications to the text