The £3.5bn (€4bn) Church of England Pensions Board (CEPB) will vote against the chairs of company boards at investee companies that have not confirmed their intention to implement new best practices on tailings dam management.
The CEPB set up and leads the 100-strong coalition of investors that form the Investor Mining and Tailings Safety Initiative, which followed the deadly collapse of a mine waste facility (tailings dam) at a Vale mine site in Brazil in 2019, known as the Brumadino disaster.
The pension fund today announced that 79 companies had committed to implement a new Global Industry Standard on Tailings Management or are assessing their alignment to it, while 183 have yet to confirm if they will implement it.
Adam Matthews, chief responsible investment officer for the CEPB and chair of the Investor Mining and Tailings Safety Initiative, said that any company that “sets itself against the Standard will face considerable scrutiny from investors”.
He said shareholder resolutions were a possibility.
CEPB today also announced that John Howchin, formerly the Secretary General of the Swedish AP Funds’ Council of Ethics, would become the global ambassador for the Investor Mining and Tailings Safety Initiative to work with investors, mining companies and wider stakeholders in the creation of an independent Global Tailings Management Institute.
The Institute is to become operational this year to support companies’ implementation of the Standard.
LAPFF concerns remain at third anniversary of Brumadinho disaster
The Local Authority Pension Fund Forum (LAPFF) has today said that it continues to hear stories of loss, devastation, and insufficient reparations from affected community members in Brumadinho, as the mining disaster reaches its third anniversary.
Over the last three years, LAPFF has engaged with Vale and BHP – the mining companies involved – in the wake of both the Brumadinho and Samarco dam collapses and continues to be “dismayed at the lack of progress in addressing the needs of affected community members”, it stated.
LAPFF chair Doug McMurdo said: “How can one repair and compensate for the loss of 272 people? It’s just not possible. We continue to hear from affected parties in Brazil that the next dam collapse is only a matter of time. Haven’t people suffered enough? The authorities and companies involved must step up as soon as possible and prevent these wholly unacceptable events.”
Aviva Investors and BMO Global Asset Management, now part of Columbia Threadneedle, have both said they will scrutinise companies’ efforts in relation to biodiversity, among other environmental issues, this year.
In his annual letter to chairs of companies, Mark Versey, chief executive officer of Aviva Investors, identified biodiversity as one of “four key stewardship priorities that will shape our voting and engagement activities” in 2022, alongside climate change, human rights and executive pay.
“We want to encourage companies to consider the whole picture of sustainability because this is how they will create the greatest return for shareholders, while helping to build a better future for society,” he said.
“Companies must now turn their pledges into concrete and measurable plans of delivery.”
One of the specific points made in his letter was that companies should voluntarily report, “as soon as practical”, against the climate-related disclosure prototype developed for the new International Sustainability Standards Board.
BMO’s engagement priorities for 2022 are similar to what Aviva’s Versey identified in his letter, namely climate change and biodiversity, the chemicals industry, human rights, and ESG risk metrics in executive pay.
Biodiversity was already a key focus area highlighted by BMO last year. It said it would increase engagement with companies in the most critical sectors including food and beverage, extractives, materials, transportation and finance.
“It can take time to build consensus for change within a business and to develop the tools to do so,” said Claudia Wearmouth, co-head of BMO GAM EMEA’s responsible investment.
“We support companies on that journey, but in 2022, a key focus of our work will also be holding companies accountable on their commitments.”