Investor abrdn has called on mining companies to use all the tools available to them to improve workplace behaviour and diversity, equity and inclusion, as well as apply “the same rigour of existing health and safety regimes to psychological safety”.
The £464 billion UK investor released a statement on Wednesday with recommendations to ensure the wellbeing of employees as part of ongoing engagement with its largest mining holdings following incidents of “unacceptable work-place behaviours” in the sector, including sexual harassment and assault.
“We believe that taking action to support employee wellbeing is aligned with positive steps already being taken in the industry and will further help to improve workplace behaviours and protect employees,” abrdn said. “Further, it will help to protect the value of our investments by avoiding the operational, reputation and legal fallout that often accompanies poor performance.”
Reflecting on current actions by companies to address these issues, Andrew Mason, head of active ownership at abrdn, told Responsible Investor that most investee companies in the mining sector are keen to act and have been open to discussions.
He added that, with regard to engagement, abrdn has different expectations and milestones for companies at varying stages of progress on workplace behaviours.
At the same time, the investor has outlined “bare minimum standards and measurable KPIs”, according to Mason. These include governance oversight linked to the executive, training being in place for senior managers and those on the ground, and “just practical things they can do around facilities like lockers or having doors to toilets”.
Overall, abrdn’s statement highlights governance, performance incentives such as remuneration, oversight, monitoring and reporting as key tools for addressing workplace behaviours.
Mason confirmed that there will be regular check-ins with companies to monitor progress.
Investor concerns regarding social and environmental degradation have led some to exclude or divest from all mining companies in the name of sustainability, abrdn has acknowledged.
“While this is understandable, this approach overlooks the fact that our future – which depends on renewable energy, mobility, sustainable cities and a zero-carbon economy – relies on the availability of metals and minerals,” the firm noted in a press release.
The statement from abrdn has been endorsed by the International Council on Mining and Metals (ICMM) as well as mining heavyweights including Rio Tinto, Anglo American, BHP and Vale.
Investor focus – and scrutiny – on social issues surrounding the mining sector has been ramping up in recent years.
The Principles for Responsible Investment’s (PRI) Advance initiative, which aims to co-ordinate investor action in pushing for greater respect for human rights among businesses, is targeting the metals and mining sector, as well as renewables.
And in January, a group of investors launched the Global Investor Commission on Mining 2030, which aims to push mining firms to improve standards in a series of key sustainability areas including child labour, indigenous communities, impacts on biodiversity and tailings dams.
Responding to abrdn’s announcement, Paul Chandler, director of stewardship at the PRI, told RI: “The PRI welcomes continued investor focus on the mining sector – a sector critical to the transformation to a net zero economy – and on the human rights risks it poses to people, in particular to workers and communities.
“Efforts like this from abrdn, the recently launched Mining 2030 commission, and of course the PRI’s Advance collaborative engagement are an indication of the responsible investment community’s sustained efforts on supporting extractives companies make necessary changes as the world transitions, seeking continued strong financial performance while ensuring respect for people and their human rights.”