A REPORT by some of the world’s largest investors have urged a more hands-on approach to investing in mining companies by pushing for better environmental practices and broadening the scope of concern to industries reliant on minerals.
Bloomberg News said asset managers representing more than $15 trillion in investment, and including California State Teachers’ Retirement System and Allianz Investment Management, proposed several recommendations for how investors can help bring about “an environmentally and socially responsible mining industry”. Steps include capital allocation and company engagement, the report said.
Mineral demand for clean energy technologies will need to almost triple by 2030 to align with the International Energy Agency’s net zero by 2050 scenario, said Bloomberg News. A typical electric car requires six times the mineral inputs of a conventional car.
The commission said investors need to better understand the mining ecosystem and how they can influence it. The group came up with six strategic objectives for its investor members, including developing a common set of expectations and advocating for better environmental performance, said Bloomberg.
Fredric Nyström, head of sustainability and governance at Swedish pension fund AP3, told Bloomberg News that the whole supply chain for mineral-dependent industries ranging from automotives to renewables had to be involved in the process.
“We’ve got to lean into the sector in a much more intentional way than just simply managing it within our own individual portfolios, and recognising that unless we do so it’s going to be hard for the sector to attract the long-term patient capital it’s going need to meet future demand in the most responsible way,” said Adam Matthews, chair of the Commission on Mining and chief responsible investment officer at the Church of England Pensions Board.
“We’ve got to give the signals that there’s a long-term commitment from us,” he said.
