The London Metal Exchange (LME) has announced a significant step towards recognizing and incentivizing sustainable metal production, as it is currently engaging closely with physical market stakeholders on its proposals for four key metals:

• aluminium
• copper
• nickel
• zinc

The move would have the potential to support a market for sustainably produced metals.

The LME’s proposal, now under consultation, builds on its 2024 partnership with Metalshub, a digital platform that already facilitates price discovery for low-carbon nickel. The new plan would extend this approach to aluminium, copper, nickel, and zinc, using a more comprehensive set of sustainability criteria.

Key features include:

• robust criteria: each metal would be assessed using both a metal-specific carbon footprint methodology and third-party sustainability assurance.
  
  For example, copper would require compliance with the International Copper Association’s methodology and The Copper Mark assurance, while aluminium would follow the International Aluminium Institute’s methodology and the Aluminium Stewardship Initiative standard
• LMEpassport integration: metal brands would submit their sustainability credentials via LMEpassport, ensuring transparency and comparability across the market
• independent price administration: ehe LME proposes appointing a pricing administrator to publish the sustainability premia based on Metalshub trading data and expert judgement. Market participants would be able to engage directly with the administrator to raise issues or provide additional data

“Our conversations with stakeholders have shown that there is support for establishing a way to reflect an LME brand’s sustainability in its price. There is a growing sophistication in industry sustainability standards and accreditation programmes that cover broad criteria for different metals markets”

— Matthew Chamberlain, LME CEO

The move is widely seen as a critical development for the metals and mining sector, especially as end-users and investors increasingly seek to support lower-carbon, responsibly sourced materials — and governments look to secure supply outside of cheaper minerals produced by China.

Nick Stansbury, Head of Climate Solutions at L&G Asset Management, welcomed the proposal, saying, ““Transparent pricing of sustainable materials is critical to incentivising investment into transition technologies in the mining industry and we look forward to the outcome of this market engagement process.”

Dr Frank Jackel, Co-Founder and Managing Director of Metalshub, added, “By integrating sustainability data into trading processes, we enable participants to make informed decisions, ensuring that responsible metals receive fair market valuation. Providing the technological foundation for price discovery will help to drive the industry towards a greener and more responsible future.”

The LME is currently engaging with a broad range of market stakeholders and will provide further updates as the proposal develops. If implemented, the sustainable metal premia could become a key tool in driving investment into greener supply chains and supporting the global critical minerals agenda46.

For the mining and investment community, the LME’s move signals a new era where sustainability is not just a reporting metric, but a marketable asset with tangible economic value.

The LME’s proposed sustainability criteria would incorporate both carbon footprint thresholds, calculated with a metal-specific carbon footprint methodology, and a third-party sustainability assurance. The criteria for each metal would be as follows:  

Sustainable nickel 

• carbon footprint: Nickel Institute methodology
• future third-party sustainability assurance: the LME plans to add the requirement for assurance by The Nickel Mark in the future, but because the existing LME/Metalshub offering is gaining traction as a low-carbon product, it is considered appropriate to respect the original specification, until the industry is ready to embed The Nickel Mark assurance

Sustainable copper

• carbon footprint: International Copper Association methodology
• third-party sustainability assurance: The Copper Mark  

Sustainable aluminium

• carbon footprint: International Aluminium Institute methodology
• third-party sustainability assurance: Aluminium Stewardship Initiative Performance Standard

Sustainable zinc

• carbon footprint: International Zinc Association methodology
• third-party sustainability assurance: The Zinc Mark

Our analysis on the challenges and opportunities in the bifucration of prices in the critical minerals market:

Turning critical minerals into free range eggs