A coalition of major investors, including the California State Teachers’ Retirement System and Allianz Investment Management, has issued a clarion call for a new strategy in the mining sector. The Global Investor Commission on Mining 2030, representing institutions with a staggering $15 trillion in assets, emphasizes that to meet the soaring demand for minerals and metals essential for the green transition, a shift towards environmentally and socially responsible mining practices is crucial.
The report highlights the immense resource requirements for technologies that support a low-carbon future—such as wind and solar power, as well as electric vehicles. For instance, producing a typical electric car demands six times the mineral inputs of a conventional vehicle. The International Energy Agency estimates that mineral demand for clean energy technologies will need to nearly triple by 2030 to align with its net-zero by 2050 scenario. This growth underscores the vital role mining companies play in the global shift toward sustainability.
However, the mining industry is often viewed through a critical lens due to its history of environmental and social issues, including child labor and toxic waste management. As a result, many investors focused on environmental, social, and governance (ESG) criteria have been hesitant to invest in mining. Adam Matthews, chair of the Commission on Mining and chief responsible investment officer at the Church of England Pensions Board, points out that this hesitation may need to change.
“Mining is an essential sector, yet it’s been overlooked or penalized by investors, especially those prioritizing ESG criteria,” Matthews explains. “To reshape this industry, we need to engage more proactively rather than simply adjusting our portfolios. Without our commitment, it will be challenging for the mining sector to attract the long-term investment needed to responsibly meet future demands.”
The Commission outlined six strategic objectives for investors, urging them to develop common expectations and advocate for improved environmental performance. “This is a capital-intensive sector, and investor support is crucial,” says George Cheveley, a portfolio manager at Ninety One. “Divestment won’t solve the issues; instead, it could hinder progress in the energy transition.”
The focus on mining also highlights the interconnectedness of the supply chain for various industries, from automotive to renewable energy. Fredric Nyström, head of sustainability and governance at Swedish pension fund AP3, notes, “Even if you’re not directly invested in mining, your investments in other sectors may still rely on it.”
This initiative aims not just to address the challenges of mining but to ensure a sustainable and equitable future for all industries reliant on these essential resources. As global demand for minerals continues to rise, the message is clear: collaboration and responsible investment are key to a greener, more sustainable future.
hii Aditi Sahu this side..
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