Alliance Notes: Lithium mining / Storming the Bastille with the budget / Chewing the cud on deforestation

Monday, August 24, 2020

Alliance Events, 8/24/20

 

Announcements and Upcoming Events

 

Wednesday August 26 at 10am EDT: The ESG Initiative engages global and local institutional asset managers to discuss their approach to integrating Environmental, Social, and Governance factors into their investment frameworks. Asset managers also discuss how they advocate for particular outcomes or best practices with the governments or companies in which they invest. This month our featured speaker is Mike Sell, Head of Asian Investments at Alquity Investment Management.

Register in advance here

After registering, you will receive a confirmation email containing information about joining the webinar. Please note that the calls are exclusive to emerging markets investment professionals.

 

Tuesday September 1 at 9am EDT: The Debt & Fiscal Governance Working Group engages policymakers, independent policy experts, and emerging markets institutional investors to discuss fiscal transparency, accountability, and governance best practices across the public sector balance sheet. This month our featured speaker is Ian Carruthers, Chair of the International Public Sector Accounting Standards Board (IPSASB). Ian will discuss advances in fiscal transparency and public sector accounting in the Covid era.

Register in advance here

After registering, you will receive a confirmation email containing information about joining the webinar. Please note that the calls are exclusive to emerging markets investment professionals.

 

Wednesday September 9 at 1800 BST/ 1pm EDT:  A reminder of the Alliance’s Virtual Back-to-School (“Maybe?”) Event: An Evening of Emerging Markets, ESG and Entertainment on Zoom (“Where Else?”) Enjoy a drink at home while mourning the end of summer but celebrating the importance of ESG in emerging markets.  Learn more about the Alliance’s directors and their work, have a few laughs and reconnect with the emerging market community.  We promise the moderators won’t mute you.  At least not without a warning.  You can register here.

 

Recaps of Recent Events

 

The Perils of Lithium Mining in Northern Chile

 

The Atacama dry lake in Northern Chile. Francesco Mocellin, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

 

On August 6th, the Extractive Industries Working Group hosted a talk on sustainability issues around the mining of lithium in Northern Chile. This continued a theme picked up the previous month when we discussed the battery minerals industry and mining governance in Democratic Republic of Congo with experts from NRGI (who have just published a Resource Governance interim report for DRC). For our latest call, Nikolaus McLachlan of GIZ, the German Development Bank, discussed a recent project that visited Chile's massive Salar de Atacama basin, where SQM and Albemarle have been mining lithium in an area suffering from water stress. Lithium is a critical battery ingredient and key to the energy transition in mining, but there is a lot to learn about the impact of its extraction on the environment and local communities. The project investigated claims of irresponsible production practices and identified potential mitigation options to improve the sustainability of lithium supply. See Nikolaus’s presentation here, and reach out if you would like to see the full transcript of the call on this topical issue.

 

Fiscal Transparency and the French Revolution

 

On August 6 the Debt and Fiscal Governance working group hosted Professor Jacob Soll, a Professor of Philosophy, History, and Accounting from the University of Southern California, to offer a historical perspective into the current crisis. Professor Soll’s historical tale turned on its head the conventional wisdom that accounting is always dry and abstract. Au contraire: his riveting tale took us back to the days of the French Revolution and placed fiscal accounting at its heart, alongside the storming of the Bastille and the guillotine. Fiscal transparency, it turns out, played a critical role in stoking the public’s desire for self-governance. As happened with the Gutenberg bible three centuries earlier, the first printed versions of France’s budget flew off the shelves as academics and regular people finally saw how mismanaged or unequal the system had become and demanded change. The meaning of this parable for modern times is clear: in a time of limited fiscal space, a country’s prioritization of transparency and adaptation of international accounting norms will yield significant future gains. Most importantly, these reforms provide the government, the people and other stakeholders with insights on how best to improve the nation without breaking the bank, central or otherwise. We thank Professor Soll for his historical perspective and look forward to having him again as we know we have just scratched the surface.

 

Chewing the cud on Amazon deforestation

 

On August 14, the Agriculture Working Group convened for an open discussion with our policy partners Pedro Burnier (AdT) and Simon Hall (NWF) as well as guest speaker Daniela Teston (WWF).  Topics of discussion included the complexity of tracing the Brazilian cattle supply chain, tools available to monitor indirect suppliers and new initiatives announced by the Brazilian protein producers.  Burnier kicked off the discussion with the findings of a recent AdT report that looks at performance under the two agreements signed by the Brazilian meatpackers in 2009: the TAC (Terms of Adjustment of Conduct), an initiative of the Federal Prosecution Office and the CPP (Public commitment on Cattle Ranching), a voluntary protocol developed by Greenpeace.  These agreements require companies to not purchase from suppliers who are raising cattle on: i) deforested land, ii) properties embargoed by the state and Federal environmental agencies, ii) indigenous land and/or suppliers who use slave labor. Both agreements require companies to verify compliance through a third party audit, however, the TAC audit is much more robust resulting in more reliable results that show irregularities in instances where a company is shown to comply in the CPP audit.  While both commitments are instrumental in helping to control deforestation, a critical gap remains since meatpackers up to now have only been monitoring their direct suppliers.  

 

The Emerging Markets Investors Alliance is a 501(c)(3) non-profit organization
that enables institutional emerging market investors to support good governance, promote sustainable development, and improve investment performance in the
governments and companies in which they invest.

www.eminvestorsalliance.org