COP29 has highlighted the mining sector’s essential contribution to the low-carbon energy transition. But the sector faces multiple and, at times, conflicting pressures. These include the disclosure of climate-related financial risks, addressing environmental, social, and governance issues, and aligning operations with international climate commitments—all while meeting surging demands for minerals as physical climate change risks manifest and the transition advances. There is a critical need for transformation and action. This means moving away from a business-as-usual capital allocation approach to expand mining, and towards a strategy that boosts mining’s climate resilience thereby reducing its climate-related financial risks.
Yet, for many mining companies and investors, identifying the issues and building the case for faster action is challenging. As a result, a new collaboration between the International Finance Corporation (IFC) and ERM aims to develop thought-leading guidance on how to bridge the gap between business-as-usual mine design and operation, and climate-resilient transformation.
Spearheading this new knowledge project is the joint IFC-World Bank Climate-Smart Mining Initiative, which supports the sustainable extraction, processing, and recycling of critical minerals by creating shared value and delivering social, economic, and environmental benefits in developing and emerging economies. The collaboration with ERM brings to the table ERM’s decades of experience in helping mining clients to derisk and develop resilient, socially responsible operations that embed sustainability across all aspects of the mining value chain and lifecycle.
This framework for climate-resilient mining will offer guidance and tools to help mining stakeholders assess and valuate climate risks and make the business case for climate-resilience solutions. It will show the financial benefits of climate resilience by demonstrating how approaches that include efforts both inside and outside the mine fence can have a positive effect on mining financial performance and economics—and inform access to tailored finance for accelerated climate action. In addition, the new framework will highlight ways to measure, guide, and communicate the long-term value of climate-resilient mining. It also will provide recommendations on enabling policies so that host countries can realize the benefits of a climate-resilient mining sector.
Through this framework, mining companies will be able to access resources to support their climate change-related transition and physical risk assessments, connect climate risk management processes with financial considerations, and enhance the quality and substance of climate-action disclosure.
Investors and financiers will benefit from insights into mining company practices that embody effective climate risk management. These insights can help guide their investment due diligence and valuation processes, and financing decisions, at both asset and company level, and encourage investment in climate-resilient operations and solutions.
The initiative will also engage governments and civil society organizations, helping articulate the inter-dependencies between mining and the policy landscape that impact the implementation of climate-resilient solutions. A summary note outlining the benefits of climate-resilient mining for the public sector will accompany the framework.
