Responsible investment into the global mining industry – a spatial analysis

Responsible investment, namely the integration of Environmental, Social and Governance data into investment decisions, is now a mainstream practice in the finance sector. However, questions remain on how investors make decisions based on this type of data and whether these decisions lead to improvements in social and environmental outcomes on the ground. This paper analyses investment into the global mining sector through the institutional ownership records of a global dataset of 37,434 mining properties and 9,843 mining companies. The study reveals that 626 “responsible” investors, namely institutional investors that signed the Principles for Responsible Investment, own stakes in 1,247 mining companies and 7,583 mining properties. These investors prefer to invest in companies with higher Environmental, Social and Governance performance scores, with an average score 13% higher than the industry average. Tailings governance, corruption risk, and proximity to protected areas receive consideration from responsible investors, while water scarcity and proximity to Indigenous land do not. Contrary to expectations, responsible investors invest 23% more in coal mining properties than the global average. We surmise that current investment approaches are unlikely to contribute to significant on-the-ground improvement in practice.