Adam Matthews, Chair of Mining 2030 and CRIO of the Church of England Pensions Board, outlines investor expectations for global best practice performance standards.
It’s less than a week to the start of the ‘Implementation COP’, as it has been christened by its host President Lula of Brazil, and a point the president reinforced to representatives of the Global Investor Commission on Mining 2030 when we met him last week.
Why was President Lula meeting the commission? It’s because a responsible mining industry can be a motor for sustainable growth and economic development in Brazil and every mining country, and to get implementation of the Paris Agreement right, we must get mining right.
The building blocks of the transition
From cobalt to copper, we are going to need at least 30 million tonnes of new transition minerals by 2050, triple today’s production levels, and will need around 300 new mines just to meet the increase in battery related demand.
Many of these mines will face the challenges associated with heavy industry: potential social and environmental impacts, and will need to operate in challenging contexts, whether from water stress, objections from affected communities, or difficult national contexts.
The set of complexities mean that institutional investors typically have a cautious approach to the sector, and it is sometimes excluded from sustainable allocations. The Mining 2030 report makes the case that investors should back the expansion of mining (in the interest of the climate transition), but only if the industry can expand responsibly, with all mines operating to global best practice performance standards on environmental and social issues.
The recognition of these tensions led to the creation of the Global Investor Commission on Mining in 2023, an initiative backed by investors managing US$18 trillion. And after a two-year multi-stakeholder process the commission has today produced its landmark Vision and Recommendations. We believe this could be an inflection point for investment in the mining industry.
Level the playing field for responsible miners
The vision sets out steps to support a ten-year timeline for all mines to be operating to global best practice performance standards. It is organised around seven goals for 2035 with recommendations on how to achieve them.
The first goal, for example, is focused on the investment ecosystem and offers proposals to unlock investment for a mining industry that is responsible and resilient.
This includes harmonised market expectations both for mining companies, and for the value chain companies that purchase mined products such as auto and big tech. The need to promote clear and harmonised expectations was clear from the commission’s recent survey of the industry where 85% of mining companies asked investors to converge expectations for the sector on managing social and environmental risks.
The vision offers steps to help investors address the short-termism that too often incentivises unsustainable mine practices. This includes support for market mechanisms to incentivise companies to raise their standards such as a proposed ‘Mining Performance Assessment Framework’ of companies’ responsible mining practices. The framework will track companies progress and incentivise continuous improvement and support better decision making by investors.
A multi-stakeholder approach
The complex challenges facing mining span commodities, geographies, and ownership models. Investors cannot do it alone, and the Vision calls for a partnership between investors, companies, governments, workers and wider community stakeholders.
Key recommendations to enable this include the creation of an independent International Minerals Agency (IMA) and a new framework to assess the mining regulations of sovereign bond issuers – to monitor how countries are governing the mining industry and the risks and opportunities that may materialise from this.
The new IMA would monitor global demand and supply of minerals; codify and support best practice legislation; track illicit minerals flows; as well as provide key data of which companies are progressing towards global performance standards to better inform debt and equity markets.
The commission’s vision is: A mining industry that can meet global demand by operating to high performance standards, avoiding and minimising harm, and leaving a lasting value for communities by fostering stronger local economies, delivering improved infrastructure, and generating opportunities that extend well beyond the life of the mine.
It sets seven goals for 2035. To make significant progress towards:
- Unlocking investment for an industry that is responsible and resilient.
- The mining industry operating to credible and independent performance standards.
- Responsible sourcing being embedded across value chains.
- Regulatory and institutional frameworks and structures that promote effective governance of the mining sector and create an enabling environment for the ten-year vision.
- The mining industry engaging meaningfully with stakeholders and distributing benefits equitably and sustainably.
- Reducing conflicts linked to mineral extraction.
- Historic legacies addressed and positive legacies for current operations created.
Building on previous engagement
Several of the investors on the commission have seen first-hand how a multi-stakeholder approach, with investors taking an active role in the promotion of credible standards, can drive progress.
The investor response to the Brumadinho tailings failure in 2019, led to the creation of the Global Industry Standard on Tailings Management (GISTM) a collaborative initiative between investors, the UN, and the mining industry. Following this, many institutional investors began requiring disclosure and assurance against the standard, using it to inform engagement and risk assessments.
We are now seeing a clear reduction in the number of tailings facilities classified as having ‘extreme’ or ‘very high’ risks and in August this year the International Council on Mining and Metals (ICMM), a leading trade body for mining firms representing one third of the global mining industry, committed to publishing a Tailings Progress Report detailing progress across its membership on tailings safety.
An inflection point
The sector is at an inflection point. We can choose to support a vision of responsible mining that addresses the industry’s systemic challenges which in turn would enable long term value generation, and ultimately, a more predictable and certain climate transition. Or we can allow the digital and energy system of tomorrow to be born of social discord and environmental breaches.
The commission sets out a practical vision, involving partnerships between governments, companies, investors, workers and other community stakeholders to level the playing field for a responsible rules-based mining system. This vision driven by the long-term interests of companies and investors will deliver real, meaningful benefits for local communities as well as for national economies.
We hope all investors and wider stakeholders can help to implement the vision, and in turn support this year’s ‘Implementation COP’.
Adam Matthews, Chair of Mining 2030 and CRIO of the Church of England Pensions Board, outlines investor expectations for global best practice performance standards.
It’s less than a week to the start of the ‘Implementation COP’, as it has been christened by its host President Lula of Brazil, and a point the president reinforced to representatives of the Global Investor Commission on Mining 2030 when we met him last week.
Why was President Lula meeting the commission? It’s because a responsible mining industry can be a motor for sustainable growth and economic development in Brazil and every mining country, and to get implementation of the Paris Agreement right, we must get mining right.
The building blocks of the transition
From cobalt to copper, we are going to need at least 30 million tonnes of new transition minerals by 2050, triple today’s production levels, and will need around 300 new mines just to meet the increase in battery related demand.
Many of these mines will face the challenges associated with heavy industry: potential social and environmental impacts, and will need to operate in challenging contexts, whether from water stress, objections from affected communities, or difficult national contexts.
The set of complexities mean that institutional investors typically have a cautious approach to the sector, and it is sometimes excluded from sustainable allocations. The Mining 2030 report makes the case that investors should back the expansion of mining (in the interest of the climate transition), but only if the industry can expand responsibly, with all mines operating to global best practice performance standards on environmental and social issues.
The recognition of these tensions led to the creation of the Global Investor Commission on Mining in 2023, an initiative backed by investors managing US$18 trillion. And after a two-year multi-stakeholder process the commission has today produced its landmark Vision and Recommendations. We believe this could be an inflection point for investment in the mining industry.
Level the playing field for responsible miners
The vision sets out steps to support a ten-year timeline for all mines to be operating to global best practice performance standards. It is organised around seven goals for 2035 with recommendations on how to achieve them.
The first goal, for example, is focused on the investment ecosystem and offers proposals to unlock investment for a mining industry that is responsible and resilient.
This includes harmonised market expectations both for mining companies, and for the value chain companies that purchase mined products such as auto and big tech. The need to promote clear and harmonised expectations was clear from the commission’s recent survey of the industry where 85% of mining companies asked investors to converge expectations for the sector on managing social and environmental risks.
The vision offers steps to help investors address the short-termism that too often incentivises unsustainable mine practices. This includes support for market mechanisms to incentivise companies to raise their standards such as a proposed ‘Mining Performance Assessment Framework’ of companies’ responsible mining practices. The framework will track companies progress and incentivise continuous improvement and support better decision making by investors.
A multi-stakeholder approach
The complex challenges facing mining span commodities, geographies, and ownership models. Investors cannot do it alone, and the Vision calls for a partnership between investors, companies, governments, workers and wider community stakeholders.
Key recommendations to enable this include the creation of an independent International Minerals Agency (IMA) and a new framework to assess the mining regulations of sovereign bond issuers – to monitor how countries are governing the mining industry and the risks and opportunities that may materialise from this.
The new IMA would monitor global demand and supply of minerals; codify and support best practice legislation; track illicit minerals flows; as well as provide key data of which companies are progressing towards global performance standards to better inform debt and equity markets.
The commission’s vision is: A mining industry that can meet global demand by operating to high performance standards, avoiding and minimising harm, and leaving a lasting value for communities by fostering stronger local economies, delivering improved infrastructure, and generating opportunities that extend well beyond the life of the mine.
It sets seven goals for 2035. To make significant progress towards:
Building on previous engagement
Several of the investors on the commission have seen first-hand how a multi-stakeholder approach, with investors taking an active role in the promotion of credible standards, can drive progress.
The investor response to the Brumadinho tailings failure in 2019, led to the creation of the Global Industry Standard on Tailings Management (GISTM) a collaborative initiative between investors, the UN, and the mining industry. Following this, many institutional investors began requiring disclosure and assurance against the standard, using it to inform engagement and risk assessments.
We are now seeing a clear reduction in the number of tailings facilities classified as having ‘extreme’ or ‘very high’ risks and in August this year the International Council on Mining and Metals (ICMM), a leading trade body for mining firms representing one third of the global mining industry, committed to publishing a Tailings Progress Report detailing progress across its membership on tailings safety.
An inflection point
The sector is at an inflection point. We can choose to support a vision of responsible mining that addresses the industry’s systemic challenges which in turn would enable long term value generation, and ultimately, a more predictable and certain climate transition. Or we can allow the digital and energy system of tomorrow to be born of social discord and environmental breaches.
The commission sets out a practical vision, involving partnerships between governments, companies, investors, workers and other community stakeholders to level the playing field for a responsible rules-based mining system. This vision driven by the long-term interests of companies and investors will deliver real, meaningful benefits for local communities as well as for national economies.
We hope all investors and wider stakeholders can help to implement the vision, and in turn support this year’s ‘Implementation COP’.
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