Driving ESG Transparency: Meeting Stakeholder Demands for Disclosure in the Aluminium Sector

28 May 2023

During this discussion, the panellists highlighted the need for harmonised standards and rules for data flow to enable effective measurement and communication of impact across different levels, while acknowledging the growing demand for public disclosure of ESG information. Stakeholder expectations were emphasised to go beyond climate change and include areas such as nature, biodiversity, and social impacts. The Task Force for Nature Related Financial Disclosures and its draft Framework were mentioned as developing tools in this area, indicating the increasing complexity of information disclosure demands in relation to nature-related risks along supply chains.

The Disclosure and Data Transparency session, moderated by Chris Bayliss, ASI Director of Standards and featuring panellists Alice Lim, Head of Corporate Sustainability at the London Metal Exchange (LME); Hafren Williams, Senior Technical Specialist, Corporate Sustainability, Fauna & Flora International; Lavan Mahadeva, Research Director, CRU; Linlin Wu, Manager – Statistical Analysis, International Aluminium Institute; Patrick Fitzgerald, Agora Project Lead, Palantir Technologies and Wenjuan Liu, Senior Associate Climate Intelligence, RMI. Photo credit: CRU World Aluminium Conference 2023

While all Disclosure and Data Transparency session panellists recognised increasing demands by stakeholders (customers, lenders, local communities, civil society, governments and consumers among others) for public disclosure of ESG information, a fact reflected in the growth in disclosure related criteria in ASI Performance Standard v3 (30) compared to v2 (8), each expressed a need for harmonised standards and rules for data flow, to enable appropriate measurement and communication of impact at a range of levels – process, asset, location, corporate, supply-chain or product.

Greenhouse gas accounting and climate change criteria dominate the landscape of data transparency methods, platforms and standards, with a number of the panellists’ organisations developing and sharing tools in this area [CRU emissions analysis tool, Palantir and Trafigura announce collaboration, RMI Horizon Zero, ASI’s GHG emissions reduction pathway calculation methodology development], but a key theme of the discussion was that stakeholder expectations are for transparency beyond climate change, or in areas that intersect with climate related risks (e.g. nature, biodiversity and social impacts).  Of the 30 disclosure related criteria in ASI’s Performance Standard v3, only 2 are related to greenhouse gas emissions and energy – all others are scattered across the other 11 ESG Principles.

With respect to nature-related disclosures, Hafren Williams of ASI Member Fauna and Flora International outlined the developing and available tools from the Task Force for Nature Related Financial Disclosures and its draft Framework, currently under development and pilot.  While this is a fast moving space (TNFD has developed much more quickly than the Task Force for Climate Related Financial Disclosures – TCFD, from which it borrows inspiration and approach), companies need to be ready for increasing and increasingly complex demands for information disclosure in this space (including along supply chains) – albeit rooted in the risks at the location or asset level.

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