The Global Mining Investors Commission 2030 has the backing of the UN, the Principles for Responsible Investment and the Archbishop of Canterbury
Investors and faith leaders are backing a new global initiative to improve environmental, social and governance (ESG) standards across the mining industry amid growing concerns about how the reputational and geopolitical risks facing the sector could undermine the transition to net zero.
Launched today on the London Stock Exchange, Global Investors Commission on Mining 2030 aims to address the “systemic risks” facing the mining industry that could challenge its social license to operate at a time when its role in providing raw materials for the transition to net zero becomes increasingly important.
The commission, led by the Church of England Pensions Board with advisory support from the United Nations Environment Program (UNEP), is seeking support from major institutional investors, insurers, banks and material companies to help reform the mining sector.
It says it will explore the potential for new ESG standards for the mining sector, and outline practical steps and recommendations on how to future-proof the industry as the global economy accelerates its shift to net zero emissions.
The Commission’s focus will be on identifying gaps in best practice standards in response to social and economic risks such as artisanal mining, waste management, biodiversity protection, child labor and the role of minerals in conflict resolution, the group explained.
Figures supporting the initiative include the global investor network Principles for Responsible Investment (PRI), as well as the Archbishop of Canterbury Justin Welby and the Archbishop of Cape Town, Dr Tab McGobe.
Commission Chairman Adam Matthews, Chief Investment Officer of the Church of England Pensions Board, said systemic action across the mining value chain was urgently needed to address escalating reputational, environmental and geopolitical risks to the sector.
“To get to net zero requires scaling up mining,” he said. “Yet the industry will not be able to expand without managing the inherent systemic risks associated with tailings prone to collapse, the impact of automation on the workforce, relationships with artisanal miners and where mining contributes to or causes conflict. sector-wide challenges that require a systemic response if mining is to build public trust and catalyze the flow of capital needed to expand it.”
He added: “Working hands-on, transparently and in partnership with industry and other stakeholders, the new Commission aims to bring finance and the corporate world together to ensure the mining industry retains its social license as it scales to meet the demand for the transition from low carbon content. “
The World Bank predicts a 500 percent surge in demand for metals and minerals such as lithium, nickel, copper and graphite to create the clean technologies needed to meet the climate goals of the Paris Agreement.
The need for a new wave of mining projects has become a weapon for some critics of climate action, who have argued that clean and green technologies still have a large impact on the environment. Proponents of the move to net zero have argued that increased demand for minerals and materials used in electric cars, solar panels, wind turbines and other clean technologies will be more than offset by lower demand for oil, gas and coal. The overall environmental impact of mining and extractive industries is expected to decrease as the net zero transition accelerates.
However, a new commission today warned that failure to follow best practices in the development of new mining projects risks undermining the entire transition to net zero. As such, he stressed the critical importance of ensuring that mining firms minimize damage to communities and the environment and do not exacerbate conflicts and geopolitical tensions in regions rich in important minerals.
David Atkin, Chief Executive of PRI, said investors will be key to enhancing the ESG credentials of the global mining sector. “The collective efforts of investors can play an important role in driving change in how corporate practices affect people and communities, and how the corporate sector can increase its positive social impact as an integral part of their core business strategies,” said he
The commission said that the model of its work is provided similar recent investor collaboration resulting in a new Global Standard for Tailings Management being agreed between the mining sector and the UN, and a new Global Institute established to oversee the independent auditing of mine compliance.
Welby said the new commission, launched today, “represents a vital opportunity to ensure we can address the many systemic issues undermining the social license of the mining sector”.
“While there are good practices in the industry and emerging leaders, the sector cannot and should not do it alone. It must be trusted by many actors to fulfill its future role in society and in providing minerals for low We have a responsibility to solve them together and to do so with a commitment that when we extract, we do not harm people and the environment.
The Archbishop added: “Where such harm occurs, we must work together towards true reconciliation. And we must strive to ensure that the transition is based on justice and equity, not on the exploitation of the weakest.”
The mining industry is increasingly recognized as both a cornerstone of the transition to net zero and one of the biggest risk factors. Fortunately, investors, corporate stakeholders and even the church are now putting pressure on the sector to clean things up.