Challenges for metal traders

Tasja Botha, Managing Director, Commodities Portfolio at Brady Technologies (https://www.bradytechnologies.com) looks at the challenges facing metals traders in 2021 and beyond.

“Any organization that has a stake in metal as a resource will face a unique two-pronged challenge to balance economic risk with long-term sustainability.  With climate change, sustainability and the concept of a circular economy so high in the public consciousness, there’s been a seismic shift in the way companies operate.  One revelation is that for a business to have a positive impact on the pursuit of sustainability, it doesn’t necessarily have to forgo profit.  In fact, there are countless businesses around the world that operate in what many would regard as non-green industries, such as oil and non-renewable energy, who are making great strides toward limiting their carbon footprint while still providing a vital service, often on a global scale.”

The UN refers to the next ten years as a ‘decade of change’ in which all businesses, regardless of sector or industry, come together in order to move the needle on climate change and sustainability. The UN Global Compact was set up with this in mind, and has already welcomed more than 12,000 businesses into the fold from a variety of backgrounds to share and collaborate in building a more sustainable future.

One thing gleaned from initiatives like the UN Global Compact is that sustainability is bigger than any one resource or any single organisation. It’s about the data-driven transformation of things like supply chains, logistics and distribution. If a business can tighten up these areas in the interests of profit, it can do the same in the interests of sustainability.”

“Anybody would be forgiven for thinking that metals fall into the same non-green category as the oil or gas industry. But carbon neutrality isn’t a zero-sum game and even the most unlikely of businesses can have a material impact on the journey toward sustainability.  In 2020, the London Metal Exchange announced that it would be launching a separate spot exchange for trading low-carbon metal.  This marks the first time the exchange has ever traded metal based on its environmental footprint in its 140-year history.”

“The ‘greening of metals’ is likely to continue in the coming years, giving metals traders a unique opportunity to contribute to the fight against climate change.  But to do so, they’re going to need to meticulously balance risk and profit with sustainability, and that’s where data comes into play.  Profit and principle can co-exist thanks to data, insight and technology.  By accelerating digital change and arming themselves with trading tools that can provide real-time analysis and aid minute-by-minute decision making, metals traders can safely balance profits with environmental impact.”

The full blog can be found at https://bradytechnologies.com/news/risk-and-sustainability-the-challenges-facing-metals-traders-in-2021-and-beyond/