London/Boston/Hong Kong/Sydney
Global investors launch guide to drive engagement on climate
risk with the mining sector
A fortnight before the UN Climate Summit in Paris, and as the OECD struck a deal to restrict
subsidies to the coal sector, a global network of more than 270 institutional investors
(representing assets worth over €20 trillion) has published a guide to drive closer engagement
with mining companies around the world about their management of climate risk.
Launching Investor Expectations of Mining Companies – Drilling Deeper into Carbon Asset Risk, Stephanie
Pfeifer, Chief Executive at the Institutional Investors Group on Climate Change said today, “As momentum
builds towards an international climate deal in Paris, the global investor community is setting out as clearly
as possible the expectations it has for mining companies about action required to curb carbon asset risk.
The guide has been developed to help investors step up their engagement with the mining sector as part of
their ongoing efforts to better manage climate risk across their portfolios.”
Commenting further, Stephanie Maier, Head of Responsible Investment Strategy & Research at Aviva
Investors, explains: “With mining companies featuring in many portfolios, investors need to know that these
companies are prepared for the likely changing market dynamics arising from policies and actions to curb
climate change and the risks they pose to profits.
“To protect their long term interests, investors want assurances that the capital allocation decisions made by
the boards of major mining companies give clear consideration to climate change, and to the associated
energy transition, in ways that will ensure the future sustainability and profitability of the entire sector.”
The guide is designed to support a constructive dialogue between investors and the mining companies they
own about these issues. Bruce Duguid, Associate Director, Hermes EOS, and lead author of the guide
added: “Climate change poses clear long-term risks to the current business models of many mining
companies, as well as some opportunities. This guide is intended to develop market best practice for
investor engagement with mining companies to ensure that decisions are made in the long term interests of
shareholders and their beneficiaries”.
North American investors share that concern. Speaking about the guide, Andrew Logan, Director of the
Carbon Asset Risk program at Ceres said, ”Going forward, asset owners and fund managers need to know
how mining companies - and particularly the boards accountable for overseeing them - see the future of
demand, how those views align with the carbon reductions required to deliver binding international
agreements reached between governments around the world, and to what extent there may be stranded
assets due to those commitments or a shift in demand.”
The guide warns that routine assumptions that underpin many of the demand and price projections used in
the mining industry are now open to challenge due to the impact that transition to a low carbon economy
(and associated policy changes) will have on patterns of demand, commodity prices, and use of technology.
“Investors recognise that the global economy is now pivoting around the need to limit global warming to two
degrees. Diversified mining companies have already begun to shift away from carbon intensive thermal coal
and look at the potential for new technologies to achieve net zero carbon operations. The publication of this
guide is an important example of the market working to respond to climate change by driving thorough
scenario testing, risk analysis and transparency from mining companies,” added Emma Herd, Chief
Executive of IGCC Australia and New Zealand.
About the guide
Investor Expectations of Mining Companies – digging deeper into carbon asset risk was developed by the
Institutional Investors Group on Climate Change (IIGCC) with support from investor networks in North
America (Ceres’ INCR), Australia and New Zealand (IGCC) and Asia (AIGCC). It is intended to be used in
tandem with Institutional investors’ expectations of corporate climate risk management
The guide is the first in the series of Investor Expectations guides to also have CDP data points linked to the
questions to support investor preparation to meetings with companies. Welcoming the guide James Hulse,
Head of Investor Initiatives at CDP added:
"CDP is delighted to have worked closely with IIGCC to link the expectations set out in the mining sector
guide to the questions in the annual information request we send companies on behalf of 822 investors
representing US$95 trillion. This, and our wider analytical tools and reports, support investors working
together globally under the Carbon Asset Risk initiative.”
Whilst primarily aimed at diversified mining companies, the guide can equally be applied to any single
commodity and therefore be used to inform engagement with companies focused on particular commodity
groups such as thermal coal, precious metals, copper or rare earth metals.
The guide sets out investor expectations in reference to six areas of concern:
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Governance - Clearly define board and management governance of climate change risks and
implications of energy transition dynamics.
Operational efficiency (and emissions) - Set long term targets to improve energy efficiency, reduce
carbon intensity and curb greenhouse gas emissions from all parts of the business and measure
progress
Strategy implementation - Ensure business model is robust and resilient in the face of a range of
energy demand scenarios through appropriate stress testing
Preparedness for physical impact of climate change – Appraise risks arising from ongoing changes
to climate or local weather and put in place plans to preserve productivity and asset values.
Public policy: Engage with policy makers and other stakeholders in support of cost-effective
measures to mitigate climate risks and support low carbon investments. Do not lobby against these
positions. Render all lobbying activity / spending on climate and related energy and regulatory
issues transparent.
Transparency and disclosure. Disclose in annual reports and financial filings, the company’s view
of and response to each question set out in the guide
ENDS
Notes for Editors
For more information: contact Hannah Pearce, Communications Manager hpearce@iigcc.org Tel +44 (0)7867 360273
Report weblink (to go live 00.01am GMT 17 Nov 2015): http://www.iigcc.org/publications/publication/investorexpectations-of-mining-companies-digging-deeper-on-carbon-asset-ri
CDP linkage document weblink (to go live 00.01am GMT 17 Nov 2015):
http://www.iigcc.org/publications/publication/linking-cdp-and-gics-investor-expectations-of-mining-companies
Interviews: Please contact Hannah Pearce (as above) if you would like to interview any of the following:
Stephanie Pfeifer, CEO, IIGCC
Bruce Duguid, Associate Director, Hermes EOS
Stephanie Maier, Head of Responsible Investment Strategy & Research at Aviva Investors
The Global Investor Coalition on Climate Change is made up from more than 270 investors that represent over €20
trillion in assets. It brings together the following organisations/networks:
Institutional Investors Group on Climate Change (IIGCC) is a European forum for collaboration where over 115
members, including some of the largest pension funds and asset managers in Europe, representing €12trillion in assets. It
seeks to provide investors with a common voice to encourage public policies, investment practices and corporate
behaviour which address long-term risks and opportunities associated with climate change.
Ceres’ Investor Network on Climate Risk (INCR) is a North America-focused network of institutional investors with
more than 110 members representing and $14 trillion in assets. INCR is a project of Ceres, a non-profit advocate for
sustainability leadership that mobilises investors, companies and public interest groups to accelerate and expand the
adoption of sustainable business practices and solutions to build a healthy global economy.
Investors Group on Climate Change (IGCC) is a collaboration of 60 Australian and New Zealand institutional investors
and advisors, managing over $1 trillion and focusing on the impact that climate change has on the financial value of
investments. IGCC aims to encourage government policies and investment practices that address the risks and
opportunities of climate change, for the ultimate benefit of superannuants and unit holders.
Asia Investor Group on Climate Change (AIGCC) is an initiative set up to create awareness among Asia’s asset
owners and financial institutions about the risks and opportunities associated with climate change and low carbon
investing. With a significant network, including pension, sovereign wealth funds, insurance companies and fund
managers, AIGCC represents the Asian voice in the evolving global discussions on climate change and the transition to a
greener economy.