$10trn investor coalition sends mine tailings ultimatum to extractives companies

A group of 96 investors with $10.3trn (€11.9bn) in assets under management has given listed extractives companies 45 days to respond to a letter seeking specific disclosures on every individual tailings storage facility under their control.

It is the latest investor action in the wake of the Vale mine dam disaster near Brumadinho, Brazil in January which cost hundreds of lives and which has galvanised the RI sector with the issue being viewed by some in the ESG world as a litmus test for responsible investment.

Tailings dams contain the toxic residue from mining activities but nobody is sure how many there are. They are known by the acronym TSF, tailings storage facility. The companies are being asked 20 questions about their tailings storage, including long/lat coordinates, status, information about independent reviews, engineering records etc.

The letter — to 683 companies — has been sent by the Church of England Pensions Board and the Swedish Council on Ethics for the AP Funds in what they are terming “an urgent global engagement” in response to Brumadinho. The engagement is also supported by the Principles for Responsible Investment (PRI).

The individual company disclosures, which the investors want certified at the chairman/CEO level, will be scrutinised by investors as they develop an assessment framework to profile each company on their tailings management.

This request follows two investor roundtables convened by the Church of England Pensions Board and the Swedish Ethics Council at the Church of England’s London HQ, most recently on April 1. Investors are due to meet again in May.

Last month, the PRI teamed up with mining industry body the International Council on Mining & Metals (ICMM) and the UN Environment Programme on a review of mine tailings storage in the wake of the disaster. But this was criticised as “weak and disappointing” by research group World Mine Tailings Failures. The new investor letter is distinct from the ICMM/UNEP/PRI process, according to a statement.

Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board and the co-lead on the Investor Mining & Tailings Safety Initiative, said the new disclosures would “drive a new level of accountability and transparency” within the mining sector. They would be basis of further interventions by investors.“It is essential that investors can establish a clear line of sight on which company has which tailings facility and how that facility is being managed. The current disclosures from companies are largely inadequate.” He added the group is working across the investment community and with expert input to create a global database.

“As responsible investors, we are committed to working with the mining sector to ensure that verifiable best practice standards are developed”

The Ethics Council’s John Howchin added: “These tailings dams are here for eternity, we need to set a global system in place that handles it, out of respect for the victims of the Brumadinho disaster but also for future generations.”

Aidan Davy, ICMM’s Chief Operating Officer told RI: “We recognise the value in the enhanced disclosure of how companies manage their tailings storage facilities, as do our members, and it is important to get this information from all of the industry.” He said one output of the review with the PRI and UNEP would be the development of an international standard for tailings facilities that is expected to create a “step change” in their safety and security.

The letter, which references the earlier Samarco dam disaster, says: “As responsible investors, we are committed to working with the mining sector to ensure that verifiable best practice standards are developed, implemented and maintained.”

It continues: “If you are unable to answer a question, or do not have the requested information, please explain why this is the case and what action the company is taking to address this.”

The investors have set up a webpage here.

The letter requests that companies:

• Publish the disclosure on their website within 45 days.
• Make sure it is signed by CEO/Chair
• Consider how to communicate any disclosure with communities that might be affected.
• If unable to answer a question, or provide the requested information, the company should clarify what action it is taking.