In October the London Metal Exchange announced the launch of new responsible sourcing requirements for all brands listed on the exchange. This is a potentially market changing development that will directly affect LME producers and influence action throughout the wider global metals market.
By 2022 producers are expected to have fully engaged with the new LME requirements with full adoption compulsory by 2023.
This leaves impacted companies with a two-year window to ensure their approach to, and reporting on, responsible sourcing is LME compliant.
For producers and intermediaries outside the LME, this window is also potentially critical as the wider metals market is expected to follow the LME’s direction of travel on responsible sourcing.
Over the last few months we have reviewed the new requirements and liaised directly with the LME to establish exactly how the new approach will be applied and how companies can comply.
We have taken that insight and created an easy to use, step-by-step guide to become LME ready.
The guide also takes you through a suite of tailored options RCS Global can provide to your business to make the process quick, comprehensive and cost effective.
To access the full briefing simply email email@example.com
You will be expected to meet baseline standards for due diligence and publicly report on action taken
Producers will have to implement both transparency and minimum [OECD Due Diligence Guidance based] standards on supply chain due diligence globally, allowing consumers to understand what kind of responsible sourcing actions they are taking for each brand wherever they are sourcing from.
The LME’s core standard is the widely recognised OECD Guidance, which is flexible enough to allow companies to apply existing standards that are OECD-aligned when they identify supply chain risks.
Furthermore, producers are required to adopt OHSAS and ISO standards on health and safety, and environmental management.
The requirements cover all brands (metal products) traded on the LME. As such, a brand’s producer (miner), and any other intermediary in a brand’s supply value chain such as a refiner, must comply with the LME requirements.
As with other key responsible sourcing initiatives such as the ICMM’S Performance Expectations or the fledging ICA Copper Mark, the LME’s requirements are founded on the OECD Due Diligence Guidance.
For many LME brands therefore, the building blocks of LME compliance will already be in place. For others, the OECD alignment means that there is already a standardized approach that can be implemented.
However, on the issue of responsible sourcing risks which must be addressed there are additional requirements. Much like the Copper Mark, the LME has gone beyond the OECD Guidance baseline risk areas, expecting companies to also address a range of additional risks covering health and safety and environmental management.
a. Recognised Alignment-Assessment Standard – you can adopt an internal or an external standard aligned with the OECD Guidance when you identify red flags;
Watch a recording of the joint LME and RCS Global webinar on the LME responsible sourcing requirements (in Chinese) on 4 November 2020
Berlin, Goma, London, Kigali, Kolwezi, New York, Shenzhen and Mexico City
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