First International Climate Study on Mining and Metals in Russia, India and South Africa

Leading non-credit rating agencies from the BRICS countries – RAEX, CARE ESG Rating Limited and Risk Insights – have produced a joint study entitled ‘Climate Risks & Opportunities in Mining & Metals Companies (MMC)’ on climate risk management in mining companies in Russia, India and South Africa. It is planned that, in future, the project participants will carry out similar studies for other sectors and sustainability risk factors, with a view to establishing a benchmarking framework for the BRICS countries.

“We recognise that the ESG agenda is international in nature, which is why we value the contribution of foreign partners and Russian companies to the development of such global projects. The climate agenda is of particular importance in this regard, as it affects each and every one of us,” noted RAEX Director Dmitry Grishankov.

As part of the preparation for the study, RAEX analysts reviewed data from 11 mining companies and conducted a survey of a number of industry representatives. Among the Russian companies, representatives from Norilsk Nickel, Polyus, Rusal and Severstal took part in the survey.

Those surveyed highlighted new opportunities arising from stricter climate requirements, but a third of companies do not consider them significant. The list of potential opportunities includes carbon trading, increased investment in low-carbon energy and the development of ‘green’ products.

An analysis of data from mining companies participating in the RAEX ESG ranking has revealed an increase in per-unit greenhouse gas emissions and energy consumption. However, alongside rising energy consumption and increasing carbon dioxide emissions, carbon offset mechanisms are developing in the Russian carbon market, such as the purchase of carbon credits and the generation of renewable energy. Over the past three years, there has been a rise in the use of RES and the purchase of CUs with the aim of reducing companies’ carbon footprints.

An analysis of 12 companies carried out by CareEdge ESG revealed differences in the approaches to climate adaptation adopted by companies involved in the extraction of mineral resources and ferrous metals. For instance, the ferrous metallurgy sector has seen an increase in Scope 1 and 2 emissions, whilst the mining industry (mineral extraction) has recorded a decrease. A similar divergence can be observed in energy intensity metrics. This difference stems from the fundamental characteristics of the decarbonisation processes in these sectors.

An analysis of the key policy and strategic commitments shaping the climate strategies of Indian mining and metallurgical companies reveals that 69 per cent are determined by national legislation, including the Mines and Minerals Act. (Mines and Minerals Act) and the Environment (Protection) Act. (Environmental Protection Act).

"What stands out to us is the momentum already building across India's mining and metals sector," said Nikunj Dube, Chief Rating Officer, CareEdge-ESG (CARE ESG Ratings Limited), — "Leading players like Tata Steel and JSW Steel are showing what's possible — investing in renewable power, waste heat recovery, and slag recycling, and in some cases already placing low-carbon steel into European markets. India's mining companies, in particular, have moved quickly on renewable integration, proving that the transition is commercially viable, not just an obligation. With the Carbon Credit Trading Scheme now operational and India's carbon market on track to reach USD 10 billion by 2030, we're seeing the foundations of a credible, home-grown decarbonisation ecosystem take shape. As global frameworks like CBAM raise the bar internationally, we see this as a genuine opportunity for Indian producers to differentiate themselves through cleaner production — and for India to emerge as a leader in sustainable steel and mining, not just a participant in the global supply chain".

Risk Insights analysed the evolution of the climate agenda across five South African gold mining companies assessing corporate climate strategies and the opportunities and risks arising from the transition to a lower-carbon economy within the context of national regulation and international climate and sustainability frameworks.

The South African analysis highlights the particular complexity of decarbonisation in an energy- and emissions-intensive mining economy. The findings point to the importance of aligning corporate transition strategies with energy-system transformation, credible emissions-reduction pathways, evolving carbon-market mechanisms and an enabling regulatory environment. They further demonstrate that effective climate-risk management in emerging markets requires coordinated action across government, companies, investors and the wider financial system.

"Climate risk in the African mining sector can no longer be viewed solely as an environmental or disclosure issue. It is increasingly connected to energy security, operational resilience, competitiveness and access to capital. South Africa demonstrates both the challenges and the opportunities of transition in an emerging-market mining economy. Our research reinforces the need for credible, locally relevant transition pathways that combine corporate action, appropriate regulation, market mechanisms and investment in cleaner and more resilient energy systems," commented Dr Anushka Bogdanov, Founder and Executive Chair of Risk Insights.

Taken together, these studies provide a comparative overview of how major mining economies in emerging markets are responding to the pressures associated with the climate transition, under different regulatory, energy and market conditions.

The full reports and comparative company data for Russia, India and South Africa are available in the Researches section.