Adam Matthews’ Post

Is mining or the act of extraction beautiful? Is it art? Whilst no doubt there is art in the perfection of the skills deployed by miners, is the outcome worthy of art? Can it be when the act itself is inherently one that changes the landscape where it occurs or when in pursuit of extraction it leads to conflict and environmental damage? These were some of the questions swirling in my mind as I visited the Saatchi Gallery in London for the Canadian photo artist Ed Burtynsky exhibition displaying 40 years of his work chronicling the impact of human industry on the world. (open to the 6th May). I had not heard of the exhibition and it was thanks to a recommendation from Rohitesh Dhawan that I should see this that led me to take two of my children over Easter. I am extremely grateful both for the recommendation and for the time I spent there as simply, it was superb. When visiting mines one of the issues I have always found when explaining what mining is like to those that are not involved, but yet may be intimately connected be that through investment in mining or as my kids are, as we all are, by benefitting from what mining produces, is the sheer scale of mining. It is hard to bring to life the magnitude of the human undertaking. This exhibition to some extent enables the viewer to grasp scale but combines it with impact. It does not condemn or promote but holds up a mirror to impact and leaves it to you to judge. We all shape the land around us and we have grown skills to do this well and can also do it badly. To what extent the footprint we leave is justifiable, legitimate or acceptable are all questions in continuous tension both today and as we look at future demand for more #mining to meet global #climate #transition needs. I recognise art is personal, but I found a beauty in many of the images, the contrasts of colours and shapes, but also in the patterns that industrial activity creates perhaps unwittingly in its efficiency. The beauty of the marks created by mechanical extraction underground or the colour of the exposed rock. The melting colours of #tailings dams managing water flows or the contrast of effluent against its environment. There is also challenge. The one that struck me most was the enlarged image that from a distance looked like a sun burnt landscape of semi organised holes all broadly similar in size and distance from each other. But as you get closer you see the harsh reality for artisanal miners in Madagascar's #gem #extraction. Likewise when you view some of the more mechanised images of factories or greenhouses. If you have time when in London, I would highly recommend visiting this exhibition. I would love to host a meeting of the Global Investor Commission on Mining 2030 at it or see it at the Principles for Responsible Investment annual in person summit...this year to be held in the home country of the artist.

A significant appointment by the President of the Democratic Republic of Congo.

How important is mining to a country's economy? The below table taken from a report by the ICMM provides a very powerful visualisation of this. As with the relevance to the transition and the many other sectors we are invested in - mining has enormous importance and requires much greater attention from investors. After having considered the future demand for minerals the Global Investor Commission on Mining 2030 has been looking at the relevance of mining through various lens such as the contribution to a national economy, but also the presence of artisanal mining and the relationship with various social issues that can challenge the sector. Further work is underway on this social pillar whilst next week the Commission will be considering the role of the circular economy in various forecasts on demand as well as company business models. We will be drawing from the insights of some of the latest work from the UN Environment Programme presented at the recent United Nations Environment Assembly in Nairobi, as well as considering the business model of a mining company that today is largely focussed on underground mining but increasingly sees a future in reprocessing tailings waste and ultimately in recycling. The Commission has an enormous amount of work to do and will be moving after this phase into deeper dives into the role of investors and finance more generally and whether the way we invest drives or incentivises the right behaviours and responses from companies and the sector, the role of Standards - considering the future landscape of consolidation and what investors need to be able to align behind best practice and whether this can flow through the value chain (much of which we are also exposed to as asset owners). We will be looking at key issues like legacy and mine closure, artisanal mining, the future workforce, the relationship with First Nation communities and indigenous communities as well as water and biodiversity. A key focus will also be on the role of investors related to conflict and extraction. We will be holding a series of more public engagements with the Commission later this year through Roundtables on different issues as we approach a key milestone at the Principles for Responsible Investment in Person conference in Canada in October when we plan to have some first outputs from the Commission. In all these areas the Commission Secretariat is seeking to draw from the wisdom of our Commissioners, the Commission Technical Advisory Group as well as through our public consultations. Please do get in touch with us if you have particular contributions in any of these areas. If you are an asset owner, fund manager, bank or insurer exposed to the mining sector (which you will be whether you invest in mining companies directly or not) please do get in touch. We will be announcing further members of the Commission Investor Supporters Group shortly.

There are conflicts that attract enormous media attention and others that occur remote from western media reporting. This reporting though from the Financial Times is extremely welcome on the growing conflict and potential for a regional war unfolding in the eastern province of Northern Kivu in the Democratic Republic of Congo (DRC). The situation is deeply concerning and the city of Goma appears from latest reports to be largely surrounded by the M23 rebels (a rebel group the US Government have accused Rwanda of supporting). I have pasted below an extract from an update that the Anglican Bishop of Goma, Bishop Martin Gordon, posted in his recent newsletter about two Archdeacons [Priests that have responsibility for churches in a particular area] that had travelled from an area just outside Goma to his Church service on Sunday. If you have a moment it is worth reading. There is also an excellent short video update on the context of what is happening from the Red Cross (a link in the comments below). 'They shared in church on Sunday how a bag of salt has risen from 700 Congolese francs to 2400 and how they have to walk 4 hours to get mobile phone reception as the power lines have been cut. Many in their area don’t move about much as every few hundred metres there is another rebel group on the road demanding a road tax.   The archdeacons were in Goma for our Diocesan Council where we also heard from another archdeacon how his cow and 4 goats had been stolen by rebels last week and the shepherd is nowhere to be found. He told us of the way in which the war is taking a chilling turn where he lives with verified accounts of M23 atrocities of summary executions and people being buried alive or burned in their homes.    In every area of our diocese people are either fleeing or welcoming those who are fleeing. The population of Goma is swelling daily with noticeably more children on the streets. Not to mention the numbers in the camps on the edges of the city. Some estimates put the rebel-controlled area of the Province of North Kivu at around 40%. As one resident said this week, “To live in Goma is to understand that at any time you can go to sleep with no hope of waking up in the morning. In the day we live in heaven. At night we are in hell.” The International Red Cross gives a brief update here.   We heard of the dire situation in our 109 church schools. More than 50 have not opened their doors this academic year. And of those that have the teachers are starting to leave as they receive no salary at all. Two of our schools have been hit by bombs and dozens are used as IDP shelters during the nights with desks as firewood, and makeshift classrooms during the day.' It must be terrifying to think what it is like to be in Goma and how a different path for peace can be re-established.

Hugely supportive of this research being led by Laura Hillis and encourage anyone in the investment industry with responsibility for developing climate solutions to complete the survey...Laura says it takes 10 minutes....

Important announcement by the South African government to address the rolling blackouts and important context from Ninety One CEO Hendrik du Toit and the CEO of the Minerals Council for South Africa Mzila Mthenjane. As recently highlighted by the ASCOR Initiative assessment by the Transition Pathway Initiative (TPI) South Africa have a relatively ambitious net zero target. As I discussed at The Economist Summit last week in London alongside the CEO of Aviva Investors, Mark Versey and the Executive Director of Green Finance Institute, Ingrid Holmes, there is a real imperative for institutional investors to roll up their sleeves and engage governments to work with them and companies that are significant energy users in country to enable those goals to be reached. That means whole energy system transition and not just the renewables part. Supporting the thermal coal energy system transition in a way that justly supports the workforce and communities and creates the grid upgrade and jobs in the new industries. As a fund we hold South African government debt, we hold equity and debt in listed companies with major business operations in South Africa. As such we have a collective vested interest with those companies seeking to decarbonise as well as diversify their demand from the grid and support the realisation of the South African desire for energy security and its own Nationally Determined Contributions under the Paris Agreement. As a fund we are committed to support this work in South Africa as well as working closely with local asset owners and key managers such as Ninety One. We are also keen to see organisations like Principles for Responsible Investment support such investor engagement so that it is really practically focussed on unlocking international institutional financial flows. Unless pension funds roll up our sleeves and understand the local realities of national transitions and work to create the financing vehicles that can lead to genuine new investment in those countries we will fail to support emerging markets to transition and in turn fail to see an orderly transition.

Following last night's Channel 4 documentary on UK water companies "Joe Lycett versus Sewage" - presented by the UK comedian Joe Lycett - we have published the letter he refers to at the end of the programme. He asked us to join him in selling his personal shares in UK water companies in protest at the sewage that continues to flow into UK waters. The request was made to the Archbishop of Canterbury related to the shares held by the Church of England Pensions Board. Our letter is below.   Joe presented our position fairly in the documentary, and while bringing humour to an important issue, he raised genuinely important issues and concerns that are widely held by the public. As set out in our letter, we are currently seeking to engage with the whole UK water utility sector, as well as with peer pension funds who are similarly invested in the sector. We are particularly keen to determine how the sector can transition from where it is today to one that can not only regains its social licence to operate but can also robustly retain it. The Pensions Board remains deeply concerned by the operation of several companies and the effectiveness of existing and future regulation of the sector.  We are keen to explore ways for investors to better engage with the sector - and to improve it. This is not an easy task but we believe that progress is possible. To this end, the Pensions Board is engaging with a number of companies on their plans to address historic underinvestment in key infrastructure, the burden of future finance on their customers, the resilience of the sector to extreme climate impacts and, ultimately, how individual company Boards can regain the confidence of their customers and the social licence of wider society. We will be holding a high-level Roundtable of UK Asset Owners, companies and other stakeholders in the coming months. If you are an Asset Owner and invested in the sector either through debt or equity please do get in touch. https://lnkd.in/eEqU3zbv

‘The [climate] transition starts with a mine’… great quote from an excellent interview with Fredric Nyström of Sweden’s AP3 Tredje AP-fonden in Net Zero Investor. Worth a read.

In talking with Bloomberg News Alastair Marsh I said it was obviously deeply regrettable that some fund managers have decided to withdraw from CA100. That said I would distinguish Blackrock whilst changing their affiliation have recognised that a significant part of their client base wants them involved and as such have nuanced their membership. I personally think that is also an acknowledgement of the ultimate destination the majority of assets will go over time. It’s a pragmatic work around on their part and Blackrock International are still a member and I welcome that. In broader terms it was always convenient for finance to be projected as the saviour on climate when in reality finance can only go so far if the enabling policy environment is not there. Finance at Glasgow over projected what it could do and you have seen a gradual peeling away of some more flakey members as the penny has dropped that this is much harder than a press release. You actually need to work with companies, sectors and countries to enable the transition to happen. This is about active stewardship as well as understanding the complexity of the transition and providing the patient capital to enable it. If you approach this from a fiduciary perspective an orderly transition is in the long term interests of most asset owners. Unfortunately walking away by some fund managers, although not Blackrock which remain, albeit in a different form, weakens the pursuit of that orderly transition. I wonder if the result of this is that we need clearer asset owner leadership and collaboration that enables asset managers to meet our needs. I know this is something I have long discussed with Faith Ward Michael Marshall Udo Riese and many more.