IN FOCUS6-8 min read

Q&A: How we’re helping companies in high-emitting industries decarbonise

Throughout 2022 we engaged with metals and mining companies to encourage them to develop robust climate transition plans.

High emitting industry


Kimberley Lewis
Head of Active Ownership
Carol Storey
Climate Engagement Lead

Mining is currently responsible for 4-7% of greenhouse gas emissions globally, according to research from McKinsey & Co.

Other negative effects of the mining industry include deforestation, contamination of soil, streams and wetlands, significant use of water resources and health risks and other social and community impacts.

However, at the same time, minerals including lithium, cobalt, nickel and copper are essential to delivering a transition to net zero. This is because they are components in many emerging clean energy solutions, including wind turbines and electrical vehicle batteries.

In this Q&A, we discuss risks and opportunities in the metals and mining sector in the race to net zero and how we engage with high emitting holdings like these.

Should we still invest in mining even though it is a significant greenhouse gas emitter?

Kimberley Lewis: “Divestment vs engagement was a very popular argument a few years ago: the truth is that we have moved on from binary debate. We believe by remaining invested and actively engaging we can drive sustainable change and enhance the value of the companies we invest in. We have a responsibility to take an active approach to our investments to seek to ensure our clients’ capital is protected and used responsibly.”

What sort of challenges do metals and mining companies face in decarbonising?

Carol Storey (CS): “Over the past year we have engaged with a number of priority companies on the topic of climate change. At the time of our engagement with one company in particular, it had identified a number of operations that it was finding challenging to decarbonise.

“For example, the company’s aluminium production activities were reliant on the generation of very high temperatures, which is extremely energy-intensive. Some of these activities are currently taking place in locations that do not have access to renewable energy infrastructure. The company was also mining the type of coal needed to produce steel (metallurgical coal).”

What sort of opportunities are there in this sector?

CS: “At the same time, this company also had incredible opportunities in transition metals like copper, nickel and silver – used to make things like wind turbines, solar panels and electric motors and batteries.

“We didn’t want to see the company simply sell off parts of its business to meet net zero goals. This is unlikely to result in real world emissions reductions. We also wanted to see the company support workers and local communities that could be impacted by its transition to net zero.

What was your approach to engagement in 2022?

CS: “Our focus was to support the company with its plans to decarbonise the most difficult parts of its business. As investors we must recognise this will take time.”

“Throughout 2022 we engaged with the company a number of times in advance of a Say on Climate vote on its transition plan. These are votes where management of a company asks shareholders to back their climate transition plan.

“We engaged with different company representatives, including the chair and CEO as well as sustainability teams and investor relations.

“Climate disclosure was already quite good relative to peers but, because it is in a harder-to-abate sector, we wanted to see a ‘best-in-class’ transition plan that would address the company’s key challenges and demonstrate it was doing everything it could to decarbonise.

“In the run up to the vote, we provided detailed feedback reflecting our views of good practice for transition plans, and highlighted areas where the company could strengthen its net zero ambition. We were keen to understand further the company’s capital expenditure plans, goals relating to Scope 3 (value chain) emissions, and how the company was interacting with governments and business partners to secure access to renewables and low-carbon fuels.

What was the result?

CS: “Shortly before the vote, the company released its full transition plan. We were pleased to see the company enhance its disclosures along the lines we had discussed, and strengthen its net zero goals to cover Scope 3 emissions. It also went further than expected by making a commitment not to develop or invest in greenfield metallurgical coal projects. We supported management’s Say on Climate resolution.

“Throughout our engagement dialogue, the company’s leadership has demonstrated that climate risk is incorporated into strategic decision-making at the highest levels of the company.

“What we found particularly impressive about this company was the way scenario analysis has been used to identify high-risk business operations, which in turn informs the company’s just transition plans, developed to reduce the potential impact of the transition on workers and local communities.”

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.



Kimberley Lewis
Head of Active Ownership
Carol Storey
Climate Engagement Lead


Active Ownership
Net Zero

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

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