The Global Investor Commission on Mining 2030 is intended to address the systemic risks faced by the mining sector, which challenge the role it needs to play in the low carbon transition.
- The Global Investor Commission on Mining 2030 has been launched in London.
- It will evaluate the standards, practical steps and investment needed to secure the future of the industry.
- Mining plays a key role in providing critical minerals for the low carbon transition, but it needs to address its own sustainability issues.
The commission was launched at the London Stock Exchange, part of London Stock Exchange Group (LSE:LSEG), in January 2023. It is backed by the Archbishop of Canterbury, Justin Welby, and the Archbishop of Cape Town, Dr Thabo Makgoba, as well as global investor network the Principles for Responsible Investment and advised by the United Nations Environment Programme.
What is the purpose of the new commission?
The initiative is intended to address the systemic risks faced by the mining sector, which challenge its social licence to operate and provide critical minerals for the low carbon transition. It targets a sector-wide reform by 2030 to be supported by investors, banks, insurers and companies on the demand side.
Good practice and leadership exist in mining, but it is currently limited to individual companies. Recent controversies, such as the Brumadinho tailings dam disaster and the destruction of Juukan Gorge, a 46,000-year-old heritage site in Australia, have come as a consequence of a lack of standardisation, according to the committee.
Other major issues include the impacts of automation, artisanal mining and child labour, climate change, biodiversity loss and the role of mineral demand in sustaining and driving conflict – which all require a comprehensive approach across the sector.
What will it do?
Supported by an investor steering committee, the commission will comprise stakeholders from various backgrounds, including communities, government, companies, and investors.
It will evaluate the standards, practical steps and investment needed to secure the future of the industry, keeping in mind the vulnerability of supply chains when it comes to strong demand for critical minerals. A key focus will be to identify gaps in global best practice standards across social and environmental systemic risks.
It will draw lessons learnt from the recent investor collaboration following the 2019 Brumadinho disaster in Brazil, where a tailings dam collapsed killing 270 people. It led to a new Global Standard on Tailings Management being negotiated with industry and the UN, and a global institute announced to oversee independent auditing of individual mine site compliance with the Standard.
There will be a series of working groups tasked with identifying potential interventions across the agenda items: anti-corruption; artisanal mining; automation and future workforce; biodiversity, land and protected areas; child labour; climate change; conflict and reconciliation; historic legacy of mining and rehabilitation; indigenous community and First Nations rights; mine tailings waste and site closure.
On each of them, the commission will identify best practices as well as existing global standards or whether they need to be created; test whether existing ESG data disclosure is fit for purpose; identify additional disclosure requirements or where consolidation of disclosures may be required. Finally, it will outline necessary steps for the 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.
The green transition dilemma
The world needs the mining industry to provide critical minerals for the green transition, but the sector itself needs to address its own environmental and social issues.
According to the International Energy Agency, the demand for these metals will rise sixfold from today’s levels before 2040, as many of the climate solutions required to reach global climate goals rely heavily on the continued extraction of raw materials, such as electric cars. This, however, affects the quality of water, air and soil, causes biodiversity loss and generates greenhouse gas emissions.
Mining has also historically caused a wide range of social impacts, such as lowering living standards, threatening human health and displacing Indigenous peoples. The presence of precious metals has led to conflict and the rise of child and illegal labour, especially in developing countries.
As the industry plays a fundamental role in making the world more sustainable, it must do so responsibly and without harm to communities and the environment. This would risk conflict and opposition from host communities that will in turn undermine the global climate transition, according to the committee.
“To achieve net zero requires an expansion of mining. And yet, the industry will not be able to expand without managing inherent systemic risks from tailings dams prone to collapse, to the impact of automation on workforces, to the relationships with artisanal miners and where mining contributes to, or drives conflict. These are sector wide issues that require systemic responses if mining is to secure the trust of society to catalyse the flow of capital required for its expansion,” said Adam Matthews, chair of the commission and chief responsible investment officer of the Church of England Pensions Board.
“Working practically, transparently and in partnership with industry and other stakeholders, the new Commission aims to bring the finance and corporate worlds together to ensure the mining industry retains its social license as it scales to meet demand for the low carbon transition.”