“Since the launch of the LMEpassport, CoA documentation accompanying metal is now digitised by LME warehouses using the LMEpassport platform, therefore solving the issues of losing the paper CoA in transit or the paper CoA document degrading over time,” Hugo Brodie, Head of Product Development & Innovation, LME

Hugo is Head of Product Development & Innovation at the London Metal Exchange. He is responsible for identifying, designing, and launching new products and services at the Exchange, including partnering with industry players to drive innovation across the metals industry. Prior to this, he was Vice President for Sustainability, focused on designing and implementing the LME’s responsible sourcing and broader sustainability goals. Hugo joined the LME in September 2015, having previously worked in Integrated Supply & Trading at BP.

AL Cirlce: Please brief us on LMEpassport and its role as a central registry for sustainability credentials in the metals and mining industry.

Hugo Brodie: Metals are an essential enabler of a sustainable future. As global demand for metals increases, so will the expectations of sustainable standards. At the London Metal Exchange (LME) - the world centre for trading industrial metals - we believe we have a collective responsibility as an industry to drive meaningful change in this space. In 2021, we launched LMEpassport, a centralised, free-to-view digital register that allows producers of the metals traded on the LME to share and highlight a broad range of sustainability credentials and metrics associated with their metals – with the associated evidence so the data can be trusted. There is a wide range of approved ESG disclosures which can be uploaded into the LMEpassport system, making this important information more visible, comparable, and accessible.

As of November 2023, 230 brands (approximately half of the brands of LME metal that can be traded on the LME) have listed 515 sustainability disclosures on LMEpassport.

LMEpassport is also the platform to store and maintain essential provenance and chemical analysis documents for traded metal - Certificates of Analysis (CoAs). The CoA is the key quality assurance document that must accompany all shipments of LME aluminium into and out of LME warehouses. All aluminium smelters that produce LME-branded material must also provide a CoA to the LME for their brand (demonstrating that the metal meets the LME’s metallurgical thresholds) to be initially registered. They show the metal’s origin, LME brand name, and associated chemical analysis.

It also already holds over two-and-a-half million digital CoA records on the platform, mostly representing existing stocks in the LME warehouse network. Many consumers and traders of aluminium are already using this platform to receive digitised CoA information related to the metal they receive when they take delivery from an LME warehouse.

AL Circle: What are the benefits of using LMEpassport? Does this platform help the global aluminium industry lay hands on more genuine and sustainable metal?

Hugo Brodie: The platform allows for LME-listed metals producers - of which there are currently 442 brands - to showcase a broad range of environmental, social and governance (ESG) certifications, metrics, and standards. The broader aim of the platform is to encourage increased transparency. All sustainability data that is uploaded is required to have a proof point – often a third-party verification. The LME has also designed a clear process for adding new sustainability certifications, metrics and standards to the platform to ensure that all data that is entered is useful and accurate. Once verified by the LME, all sustainability data uploaded on to LMEpassport can be publicly accessed by any user or interested party for free.

LMEpassport is becoming a one-stop-shop for users across the supply chain to provide and access sustainability data at the mining and smelter level and certainly has the potential to influence end consumers’ buying decisions.

In addition, in the physical aluminium market, inefficiencies resulting from outdated, paper-based trading processes are widely understood. Particularly, the burden of paper-based processes has been keenly felt around CoAs. There is a growing demand for provenance information from aluminium consumers globally and a demand for greater certainty that the data on the CoA is directly coming from the point of production.

Furthermore, provenance information and sustainability disclosures made by aluminium producers can be centralised and distributed to market participants globally immediately in electronic form by LMEpassport, greatly promoting user choice and transparency.

AL Circle: Does this platform provide effortless access to data and ease the process of metal shipments in and out of LME-approved warehouses?

Hugo Brodie: Previously, a paper CoA document accompanied metal shipments and was checked by the warehouse company before the metal could be considered deliverable into the LME warehouse network. Similarly, before LME-warranted metal could be delivered out of the warehouse, the same CoA paper document had to accompany the shipment.

This caused some physical trading inefficiencies for the LME’s market, as these documents were sometimes lost or degraded, particularly if the metal had been stored in the warehouse for a long time.

However, since the launch of the LMEpassport, CoA documentation accompanying metal is now digitised by LME warehouses using the LMEpassport platform, therefore solving the issues of losing the paper CoA in transit or the paper CoA document degrading over time.

Aluminium smelters that produce LME brands are integrating their processes with LMEpassport this year to provide greater confidence in their chain of custody. Once aluminium smelters are fully integrated into the platform by the end of 2024, consumers of metal from the LME’s warehouse network will be able to automatically receive, via the LMEpassport platform, digitised CoAs, removing the demand for paper-based CoAs in the industry.

By digitising these crucial trading documents, the LME aims to ease the administrative burden on different entities throughout the aluminium value chain, from producers to warehouses, financers, asset managers and traders to consumers.

AL Circle: Does this platform allow buyers to compare metal credentials and prices?

Hugo Brodie: The additional role of LMEpassport is to encourage producers to be transparent. By voluntarily publishing the data, metal producers are being open about their methodologies, their strengths, and the work still to be done. In working through the imperfections openly, both the upstream and downstream can contribute solutions in the transition to a more sustainable future.

AL Circle: What are the eligibility criteria to store and maintain certificates of analysis (COAs) and sustainability credentials in LMEpassport?

Hugo Brodie: All LME-listed brands are required to store and maintain CoAs on LMEpassport and are also eligible to upload sustainability credentials to the platform.

The next stage of LMEpassport’s evolution is to fully integrate aluminium smelters that produce LME brands. CoA (and, in some cases, sustainability) data can either be manually updated by the smelter or, more often, automatically updated via API integration to the LMEpassport platform.

Once the producer’s team establishes the API connection, the producer can continue to use their normal CoA creation processes (provided their CoAs meet a minimum quality threshold), while the data required for LMEpassport is automatically updated to the platform.

From October 2024, over 70 aluminium smelters globally (including many in North America) will digitally upload their CoA information to LMEpassport (before the metal leaves the site of production), further protecting downstream users from fraudulent paper CoAs and giving greater certainty to the downstream of the chain of custody of that aluminium.

AL Circle: What new features do you contemplate to add on LMEpassport?

Hugo Brodie: The LME is collaborating with producers and standards bodies around the world to enrich LMEpassport’s capabilities. The platform now lists a total of 466 ESG-related disclosures from 219 brands (compared to just 22 when launched in 2021), with 54 available certifications, standards and metrics across the ESG spectrum. Additionally, producers are now able to show a broad range of sustainability-related targets and commitments such as and, importantly, track their progress against them. In response to increasing engagement and data, a new side-by-side viewing functionality has been introduced on LMEpassport, enabling users to compare up to five producers’ ESG disclosures simultaneously.

Looking ahead to 2024, we are adding Net Zero targets to the targets, goals and commitments tab alongside customised targets. This gives producers and users alike a sense of how ambitious companies’ sustainability targets are.

AL Circle: What is the response from worldwide aluminium companies to LMEpassport? How many registered users do you have till now?

Hugo Brodie: Since its inception, the number of users on the platform has grown exponentially, with over half of the brands listed on the LME uploading their sustainability data. For aluminium specifically, as of November 2023, 81 aluminium brands have listed 152 disclosures on LMEpassport.

The aluminium industry’s engagement with LMEpassport has encouraged the development of more comparable carbon footprint methodologies. For emissions in the aluminium industry, the International Aluminium Institute publishes recommendations on calculating carbon footprints with a comprehensive measurement methodology. Comparable carbon footprints can now be disclosed by producers on LMEpassport and viewed by anyone with internet access.

The LME has had great engagement with the global aluminium industry – we’re looking to get the first producer live on LMEpassport on the CoA side by Q1 2024. The most active participants we’ve seen so far are from Gulf countries and North America.