Industry

Investors to Tackle Systemic Barriers to Mining Role in Transition

Mining 2030 Initiative to be led by Church of England Pensions Board, building on tailings engagement experience.

The Church of England Pensions Board has launched Mining 2030, a year-long investor-led initiative aimed at addressing systemic issues in the sector to enable it to support the low-carbon transition. The initiative builds on the lessons learnt by investors, including the £3 billion AUM pension scheme, through engagement with the sector following the January 2019 Brumadinho disaster in Brazil.

“The role of the mining sector in supporting the low-carbon transition is poorly understood,” said Adam Matthews, Chair of Mining 2030 and Chief Responsible Investor of the Church of England Pensions Board. “There is an unavoidable dependency on key minerals that requires significant growth in the mining sector. This is both an opportunity for the sector and also a major risk as systemic issues, if not addressed sector-wide, could seriously undermine the global transition.”

A 2020 World Bank report noted the “mineral intensity” of the transition to clean energy, pointing out the reliance of several renewable energy sources on technologies requiring higher levels of mineral inputs. But the mining industry has a mixed recent track record on addressing a range of environmental and social issues surrounding health and safety, land rights and toxic waste.

“A very different mining sector”

The new initiative has identified eight systemic issues that could affect the mining sector’s social licence to operate and disrupt the role mining will play in the low-carbon transition. Mining 2030 will work with industry, across the wider finance community, the UN and other stakeholders, using a collaborative engagement model via investor-led roundtables, to identify the interventions that are needed to address each of the issues.

In addition to mine tailings waste and closure, Mining 2030 will address deep sea mining; biodiversity and land use; climate change; automation and future workforce; indigenous rights; resources for the transition; and artisanal mining and child labour.

On each issue, the initiative will identify best practice and existing global standards; test whether existing ESG data disclosure is fit for purpose; and identify additional disclosure requirements or where consolidation of disclosures may be required. It will also identify necessary steps for industry as well as investor interventions aimed at supporting existing standards, creating new global standards, introducing requirements for independent verification of site-level application of standards, and identifying and supporting any necessary public policy responses.

Mining 2030 will announce an investors’ steering committee next month as well as other partners to the initiative. Roundtables are open to all investors and “very considerable” interest has been received from asset owners and fund managers, according to the initiative.

“The aim of Mining 2030 is to create the agenda for investors on these eight key issues, to ensure that there is a collective understanding across the investor, banking and insurance sector of the interventions that are needed,” said Matthews in a written statement to ESG Investor. “This will become an agenda for change to be supported over the coming years through investor action as we have led on the issue of tailings. The aim is a very different mining sector by 2030. This is also a recognition that ambitious change requires time to take effect and that we need to use this decade to drive this agenda.”

Catalysts for action

Disasters such as the collapse of the Brumadinho tailings dam that killed 270 people and the destruction by Rio Tinto of a 46,000 year old heritage site at Juukan Gorge in Western Australia have called into question the ability of the mining sector as a whole to address systemic challenges. Both events have acted as catalysts for investors to intervene, said CEPB.

Following the Brumadinho disaster, CEPB and the Swedish Council on Ethics created the Investor Mining and Tailings Initiative, a coalition of over 100 investors with more than US$20 trillion in assets under management. The initiative developed a Global Tailings Portal and Global Industry Standard on Tailings Management, together with UNEP and industry. It has been influential in driving safety in the mining sector and was awarded the 2020 Stewardship Project of the Year by the UN Principles for Responsible Investment.

“Working practically, transparently and in partnership with industry and other stakeholders, as we have on the issue of tailings dams following the Brumadinho disaster, we will develop an investor agenda for fundamental change across the sector to be achieved by 2030,” said Matthews. “This sector is too important to society and the low carbon transition, and best practice and global standards need to be supported.”

The Mining 2030 initiative will examine the proliferation of ESG data and consolidate around global best practice standards, supported by transparency and independent verification of whether standards are being applied at mine sites, wherever they operate.

Investor interventions

John Howchin, Global Ambassador for the Mining & Tailings Safety Initiative and former Secretary General of the Council on Ethics of the Swedish AP Funds, said investors had shown what could be achieved through determined interventions working with industry and the UN following the Brumadinho disaster.

“Whilst there remains work still to be completed on this major risk to the mining sector, a global standard on tailings waste exists where one previously did not, a global portal lists disclosures that previously didn’t exist and we continue to work with the UN to establish an independent Global Tailings Management Institute that will drive implementation of the Standard, ensuring individual mine site verification of its application. There is an impactful model here that can be replicated on other issues and I look forward to supporting the work of Mining 2030,” he said.

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