An ESG Framework for Extractive Industries

At its most basic, the energy transition consists of electrification of the global energy complex. To reduce carbon emissions, the world must replace fossil fuels with sustainably produced electricity. Electrification requires large amounts of copper, for conducting electricity, and battery materials such as cobalt and lithium, for storing it. Mining these minerals entails substantial ESG risks.

Extractive industries are, by nature, tough on the environment. Further, many mines operate in emerging economies with substantial risks due to lower living standards, reduced social protections, and lax governance and environmental regulations.

Published by John Baldi, Michael Clarfeld and Adam Meyers in Institutional Investor.