#DigitalDialogue with Hugo Brodie, Vice President for Sustainability at the London Metal Exchange
In this edition of our #DigitalDialogue series of interviews, we had the pleasure of speaking with Hugo Brodie from the LME.
The London Metal Exchange is the world centre for the trading of industrial metals – the majority of all non-ferrous metal futures business is transacted on the LME platforms. The Exchange provides producers and consumers of metal with a physical market of last resort and, most importantly of all, with the ability to hedge against the risk of rising and falling world metal prices (Source: LME website).
Hugo, please tell us a bit about yourself: how did you get into the metals and mining industry?
I’m currently Head of the CEO office and Sustainability Manager (please excuse the rather long title). My primary focus at the LME is working on providing the metals industry with the option of gaining greater transparency of (and access to) sustainably produced metal. Prior to this, I was helping to drive the launch of new metals derivatives products undertaken by the Exchange.
I actually started my career working in a very different commodity (crude oil) in the Integrated Supply and Trading department at BP, however, following the acquisition of the LME by HKEX, I decided to move over to base metals.
Being responsible for Sustainability at the LME – which initiatives are the LME currently working on in this field?
We began our sustainability journey a few years ago when we started to forge new responsible sourcing requirements based on the OECD conflict minerals framework. Now we’ve embedded these requirements into our standards for “good delivery” metal, we believe that it’s the right time to extend our work in this area to cover a broader range of sustainability considerations, building on the excellent progress the metals and mining industries have already made.
At the heart of our plan is a drive to provide greater transparency around, and access to, sustainably produced metal. Key to this has been the launch of LMEpassport, a centralised digital register that provides visibility of sustainability credentials.
Collaboration with Metalshub, the leading supply chain solution for raw materials
This collaboration focuses on helping promote transparency and increased efficiency in the base metals markets.
How can the metals industry, together with the LMEpassport, incentivize sustainably sourced raw materials?
Related to sustainability disclosure – LMEpassport provides transparency to the metals value chains at corporate entity, smelter/asset level and metal cast reference level on a voluntary basis (for certifications that the LME approves).
Ultimately, our goal is to support producers in disclosing sustainability information around their product and to establish a framework that means consumers can trust the information that is presented to them. Providing this transparency is an essential first step as we forge a more sustainable future for metals and the many technologies that depend on them.
Who is the system of LMEpassport for?
LMEpassport sustainability data is available free of charge to all of our stakeholders on the LME website. So really, the system is for everyone. However, more specifically:
End consumers of refined metal – For end consumers of metal to better understand the sustainability criteria of their mineral supply chains.
Fabricators/rollers – For those who buy LME branded material from LME producers directly, to have a central source of sustainability information.
Miners and refiners – For producers of LME brands to showcase their sustainability credentials.
Asset managers – For those in the buy-side community to make informed investment decisions in respect of sustainability in the metals and mining sector.
How much transparency is needed in order to extract viable data along the supply chain in the metals industry?
We don’t believe that it is the place of the LME, or indeed anyone in the metals industry, to decide unilaterally how much transparency is needed or which sustainability factors are most important, and their relative degree of significance.
That power belongs, in our view, to the end consumers of metal-bearing products. Our role is to give those consumers the supply chain they expect and deserve – namely, a supply chain that transmits the consumer demands all the way back to the mine site and can then give confidence to those consumers that the sustainability factors they think important are being reliably measured, improved and reported.
If there is a significant increase in adoption, would you say the LMEpassport is set to become the industry standard for recording information and sustainability data through the supply chain?
We’re delighted that a number of companies have disclosed sustainability certifications and metrics on LMEpassport, and we look forward to working further with producers of our listed brands on providing more data disclosures. We are also looking to enable LME listed producers to disclose data on more than just LME deliverable metal, which we hope will increase the impact of LMEpassport on the broader metals supply chain.
Where do you see the industry progressing in regards to sustainability data tracking in the next 5 years?
Rare challenges faced during the pandemic have both underscored the urgency of the evolution needed in metals and mining and emboldened us to overcome the ultimate sustainability challenge with a renewed sense of determination.
I believe it likely traceability solutions underpinned by distributed ledger technology could present excellent opportunities to contribute to the tracking and assurance of metals and I’m excited about the possibilities here.
At the moment I’m an avid and interested watcher of innovation in this space and I expect it to develop greatly in the next 5 years.