Stewardship in the Critical Minerals Value Chain: Assessing Sustainability Performance and Risks in Asia

A collaboration between ISS STOXX and the Asia Investor Group on Climate Change (AIGCC), the leading network of investors in Asia focusing on risks and opportunities in climate and nature, Stewardship in the Critical Minerals Value Chain provides investors with a structured assessment of risks and stewardship priorities as demand for these materials accelerates in support of the global energy transition.

Key Takeaways:

• Critical minerals are essential to the global energy transition. However, mining activities can pose significant sustainability and financial risks for investors.
• An assessment based on the Initiative for Responsible Mining Assurance (IRMA) standard using ISS STOXX Corporate Rating indicators shows that companies have strong policy adoption but weak implementation. While most companies have human rights, labour, and environmental policies, fewer demonstrate robust human rights due diligence, credible targets, or consistent operational practices.
• A nature impact and dependency assessment on a mining operator’s universe based in Asia indicated that mining operators depended heavily on water‑related ecosystem services. They simultaneously drive negative environmental impacts related to land‑use change, pollution, and climate change.
• The physical climate risks to mining assets are set to intensify under high-emissions scenarios. According to ISS STOXX models, water-stress and heatwave exposure across Asian mine assets will increase significantly over the next 15–30 years, threatening operational continuity and cost structures.
• Engagement remains an investor tool to assess and manage portfolio companies’ risks related to pollution, Indigenous rights, community consultation, and climate-related governance.
• In addition, investors can enhance portfolio resilience by tilting towards issuers with a stronger sustainability profile (leaders), while engaging with industry laggards to close implementation gaps. Investors can also start to embed nature- and climate‑risk analytics in investment processes.