Please consume metals sustainability data responsibly

Almost all the world wants minerals to be sourced in an ethical and green fashion. How can it be sure they are? What’s the proof of origin for a warehouse full of refined copper? What if mining the metals needed for electric car batteries did more harm to the environment than the combustion engines they are designed to replace?

We can only get comfortable about the metals we are using if we understand who produced them, where they produced them and how they produced them. It is to everyone’s credit that the focus on environmental, social and governance metrics are intensifying, but to establish provenance we need clear, concise and crucially comparable data that are available to everyone.

That clarity came a little nearer last autumn when nine producers of the metals traded on the London Metal Exchange, disclosed ESG-related metrics on a centralised, free-to-view, digital platform, LMEpassport.

Earlier this year, 17 more joined them. Having previously waded through hundreds of pages of company sustainability reports, the outside world can now find the information in one place.

For its part, the LME is in the process of suspending or delisting a number of brands that do not comply with responsible sourcing requirements.

Bringing together the data was no easy task. Producers don’t necessarily use the same measurements — and don’t necessarily measure the same things. They use varying units of measurement, decide which mines, concentrators, divisions, smelters and refineries they include, and allocate emissions in different ways.

Critics suggested the data were pointless without that comparability. Some said producers were putting up only the information that made them look good. But that is unfair.

To make this all work, we have to move past the idea that data provide all the answers. Rather it is a continuing process in which willingness of the consumer to engage with the data and understand their limitations will ultimately improve their value.

This kind of ‘responsible consumption’ will also help give producers the confidence to disclose the unvarnished truth. Too often — and mining is not alone in this — producers have been burnt when they attempt to offer such transparency. They face censure either because their data don’t compare well to others or because they haven’t made greater progress. Sometimes this is fair, but often it misses the point.

The good news is that better comparability is on its way: for emissions, in the aluminium industry, the International Aluminium Institute publishes recommendations on the calculation of carbon footprints with a comprehensive measurement methodology. The Nickel Institute, the International Zinc Association and the International Copper Association are following shortly.

In the meantime, do the data still have value? Yes. Imperfect, incomplete, incomparable though it may be, transparency remains an invaluable tool in driving progress and mitigation. In publishing the data, producers are being open about their methodologies, their strengths and the work still to be done. In working through the imperfections, the metals industry finds solutions.

In other words, perfection should not be the enemy of progress. Even with the total commitment of every metal producer, data are still going to vary. The complexity of mapping an entire metal value chain has shown us how complicated it is to measure, for example, the associated emissions accurately, consistently and in the same way from producer to producer.

We cannot expect the data to come to us in neat, identical parcels tied with pretty ribbon. We need to understand the data that we are looking at, what they measure and how. Engage, challenge, and ask questions.

That means we should look at “red flags” not necessarily as a reason to condemn a producer, but as a step forward in indicating work to be done. Without red flags, a producer cannot identify areas of concern. They will not know which areas they should address, mitigate or improve. Those red flags allow the wider market to see where progress is being made. If it isn’t, and the data show no improvement, then censure is justified. But if we want the data, if we want the transparency, we need to look judiciously.

The metals industry has a huge amount of work to do to improve sustainability. Transparency is only part of the solution and a one-size-fits-all solution is unlikely to be as effective as a broad-spectrum approach. Regulation, tax, societal pressure and the desire to do the right thing will all play their part. So should the data enthusiasts: please consume responsibly.

Dr Georgina Hallett is the chief sustainability officer at the London Metal Exchange

The Commodities Note is an online commentary on the industry from the Financial Times