Resources: Metals and Mining

Published on 01/28/2020

This is a methodological document aimed at clarifying how Mirova takes into account sustainable development issues in the framework of the environmental, social and governance analysis of each sub-sector of activity. 

Mirova

Metals are crucial to the global economy through to their pervasive use in our daily lives: from industrial equipment and buildings, to cars and mobile phones, metals are used in a variety of modern applications.

Yet their resources are finite and their recyclability rates remain low today. We will thus expect vertically-integrated companies to increase the share of metal recycling in their portfolio. In addition, while metals have no exclusive use, some are indispensable in sustainability applications that contribute to the transition to a low carbon economy, such as platinum used in catalytic converters to reduce pollution from traditional engines, and lithium in electric vehicle batteries. Because of their exposure to these metals, some mining companies will therefore be indirectly exposed to sustainability applications.

From a sustainability perspective, the industry faces structural challenges related to working conditions and human rights and also engenders significant environmental impacts through to access to resources and waste disposal. Such spillovers are unlikely to decrease in light of falling iron grades globally and the consequent larger and deeper underground operations needed to attain them. Therefore, appropriate risk management will play a crucial role in our assessment of mining companies.

Sectors: Exploration & production of aluminium, diversified metals & mining, gold, precious metals & minerals, silver, and steel