In the global push to avert catastrophic climate change, investors’ new mantra is ESG – environmental, social and governance – and resource companies are looking for ways to sell, merge and change their businesses to follow the money
The mining industry is embarking on a black-to-green revolution that will almost certainly trigger an unprecedented wave of sales and mergers, reshaping the world’s top companies.
Industry bosses told The Globe and Mail that intense pressure from environmental, social and governance (ESG) investors to meet climate targets will prompt imaginative efforts by big mining companies to dump, or greatly reduce, their exposure to their dirtiest, most carbon-intensive assets – mostly coal, oil and iron ore – commodities that are taking on pariah status after having powered two centuries of industrialization.
“We are about to see a game-changing scenario,” said Mark Cutifani, the CEO of Anglo American , one of the world’s biggest diversified mining companies. “At some point soon, there will be a restructuring of businesses and assets, starting with thermal coal.”
Mr. Cutifani and other industry executives and investors said that informal and highly preliminary talks among the CEOs of the big international mining houses – among them Anglo, BHP , Vale , Glencore and Canada’s Teck Resources – plus those in the tier below them are plotting ways to spin off or sell their high-carbon energy assets.
The idea is to make themselves appealing to the rapidly expanding universe of climate-conscious investors – those who demand high ESG standards.
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