Climate Action 100+, which calls itself the world’s largest investor engagement initiative on climate change, has released a first of its kind “Net Zero Standard” for diversified mining companies such as Anglo American, BHP, Glencore, Rio Tinto, South32, Teck Resources and Vale.
The new standard aims to help investors assess the progress of diversified mining companies as they move towards net zero, providing them with robust tools to independently and consistently assess these companies’ transition plans, in order to understand their transition risk and support their engagement efforts.
Designed to complement the sector-neutral Climate Action 100+ Net Zero Company Benchmark, the standard will provide a transparent, systematic and evidence-backed engagement tool, giving Climate Action 100+ signatories and the wider investor landscape the metrics most specific to this important, but complex, sector, the organisation says.
“The Net Zero Standard for Diversified Mining reflects the outcome of extensive consultation with investors, mining companies themselves and other key stakeholders,” it said, adding that a final consultation on a draft of the standard was conducted in the June quarter before the final release.
As part of this development, the organisation has devised a set of metrics that diversified mining companies engaged with under Climate Action 100+ will be assessed against, and the scoring methodology that will be used. These metrics are additional to the Climate Action 100+ Net Zero Company Benchmark.
Additionally, a document called Investor Expectations for Diversified Mining has been published that, the organisation says, fleshes out the standard with background and rationale behind the metrics found in the standard itself.
The metrics laid out in both documents will now be piloted by assessing selected miners with the objective of testing their practicality. Feedback from these pilots will be used to further refine the metrics into a final list, with which it is expected public assessments will be made. These assessment results (as well as the narrative and context provided in the Investor Expectations) will bring impactful insights to engagement conversations, the organisation says.
The list of Climate Action 100+ companies that will be assessed with the standard include Anglo American, ANTAM, BHP, Glencore, Grupo México, Rio Tinto, South32, Teck Resources, Vale, Vedanta.
Rebecca Mikula-Wright, Chief Executive Officer, Investor Group on Climate Change, says: “The world’s leading miners are already shifting their businesses to help the world decarbonise, but some are just making claims that aren’t backed by reality. This new standard will help investors and governments separate the greenwashers from the companies that will have sustainable businesses in a net zero world.”
Laura Hillis, Church of England Pensions Board, added: “Investors often have exposure not only to the mining sector, but to many other sectors that are underpinned and enabled by mining. For example, the autos, property, steel and manufacturing sectors are highly dependent on the commodities produced by miners. By focusing on the strategic role of mining in the net zero transition, we can boost the resilience of our overall portfolio. This standard provides an ambitious but credible framework for investors and mining companies to ensure this critical sector supports a just and orderly transition to net-zero, and it raises the bar at a crucial time in this essential global economic transformation.”
