2023 Progress Update

Climate Action 100+'s fifth progress update is available now. The update covers key engagement wins, the Net Zero Company Benchmark, and the latest updates on Phase 2 of the initiative. Read more ➜

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CLIMATE ACTION 100+ RELEASES THE FIRST NET ZERO STANDARD FOR DIVERSIFIED MINING

6th September 2023

As providers of transition materials, mining companies play a vital role in decarbonisation. Some are, however, exposed to significant transition risks. For the first time, this standard will provide investors with the necessary metrics to help assess diversified mining companies’ transition plans to net zero.

Climate Action 100+, the world’s largest investor engagement initiative on climate change, has released its Net Zero Standard for Diversified Mining. The first of its kind in this sector, the new standard aims to help investors assess the progress of diversified mining companies as they move towards net zero. Mining companies have a critical role to play in the transition of the global economy, but it is not without significant transition risk. It is vital therefore that investors have robust tools to independently and consistently assess their 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 Net Zero Standard for Diversified Mining reflects the outcome of extensive consultation with investors, mining companies themselves and other key stakeholders. A final consultation on a draft of the Standard was conducted May-June 2023 before the final release. 

MINING COMPANIES HAVE THE POTENTIAL TO REDUCE TRANSITION RISK AND ACCELERATE THE GLOBAL TRANSITION TO NET ZERO. 

Rapid cuts in the consumption of coal, particularly thermal coal, are needed over the next decade to constrain emissions within a 1.5oC budget. Many CA100+ mining companies are already repositioning their businesses for the net zero transition. While there are significant transition risks for many mining companies, the transition also creates opportunities for miners, with demand for key commodities needed for the roll-out of clean energy technologies forecast to grow significantly by 2030.  

Meeting this demand requires urgent and significant investment.  

Investors therefore need frameworks – such as the new standard – that can interrogate the credibility of current company transition plans, track progress and, where plans are not forthcoming or are inadequate, inform engagement conversations.  

DOCUMENTS INCLUDED IN THE RELEASE 
  1. The Net Zero Standard for Diversified Mining, sets out 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, and this document shows how the new metrics relate to the existing indicators and sub-indicators of the Net Zero Company Benchmark.  
  2. Investor Expectations for Diversified Mining, an accompanying document that fleshes out the Standard with background and rationale behind the metrics found in the Standard itself.  
NEXT STEPS 

 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. 

LIST OF CLIMATE ACTION 100+ COMPANIES THAT WILL BE ASSESSED WITH THE STANDARD

Anglo American, ANTAM, BHP, Glencore, Grupo México, Rio Tinto, South32, Teck Resources, Vale, Vedanta. 

ACKNOWLEDGMENTS 

Climate Action 100+kindly acknowledges the input of all of the investors, mining companies and other expert stakeholders that provided feedback and input into the development of the Standard. Full acknowledgement provided in the Standard. 

“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.”

LAURA HILLIS, CHURCH OF ENGLAND PENSIONS BOARD

“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.”

REBECCA MIKULA-WRIGHT, CHIEF EXECUTIVE OFFICER, INVESTOR GROUP ON CLIMATE CHANGE