FYI Resources Ltd (ASX:FYI) (OTCMKTS:FYIRF) (FSE:SDL) has adopted an environmental, social and governance (ESG) framework in a bid to improve shareholder outcomes from its kaolin and high purity alumina (HPA) assets.
The industrial resources developer’s WA-based operations, including the Cadoux Kaolin Project and a HPA processing centre in Kwinana, will now fall under global ESG reporting standards and an economic overlay.
Overall, the World Economic Forum has created 21 core metrics and disclosure requirements that form the global ESG standards, which FYI will report on and align with as it implements ESG policies within its organisation.
FYI’s latest step comes as it prepares to meet rising demand in the battery materials and electric vehicle (EV) markets, where high-quality, ultra-pure HPA can be used to create effective battery separators.
Focus on “innovation, quality and improvement”
FYI managing director Roland Hill said: “FYI’s whole ethos is focused on innovation, quality and improvement of standards as reflected in the successful development of our high quality, ultra-pure alumina refining process.
“As a company, we seek to adopt leading ESG processes, practices and governance standards in a manner consistent with our developing company status and culture.
“We are making positive moves to transition the company to a sustainable model and assist with our contribution in fundamentally reshaping the global economy with a change to our attitude and mindset via the goal to achieve net-zero carbon emissions.”
Adopting ESG standards
As it takes on the ESG framework, FYI has recognised the environmental, social and governance standards it holds itself to will constantly evolve.
The ASX-lister has committed to its sustainability objectives to manage those changes, which include producing ethically sourced HPA in a low-carbon footprint setting.
FYI will also engage Sustainalytics, a Morningstar branch and ESG ratings service, to provide the company with an ESG rating sometime next week.
Overall, this will establish a reporting baseline and provide a map to guide the company as it looks to improve its ESG rating.
In addition, the adoption of Socialsuite’s ESG reporting platform will help FYI monitor and track its sustainability metrics each quarter, with a baseline report due in the short term.
HPA and the EV market
FYI highlighted the growing need for high-quality, pure HPA in the EV market in its latest investor presentation.
Described as a “hallelujah” material, HPA is the benchmark battery separator in most upcoming high-duty battery concepts. It also has a suite of applications within battery anodes that make it a rising star in the battery materials space.
According to consulting group CRU, global demand for HPA is poised to triple from 30,000 tonnes per annum in 2021 to 104,000 tonnes per annum in 2028.
There’s even more growth forecast for the lithium-ion battery separator market where HPA is key. Valued at US$6.2 billion in 2020, the market is poised to reach US$11.3 billion in value by 2026.
The uptake comes as the electric vehicle market grows in major economies such as the US, UK and China, triggering increased demand for battery metals from producers in Australia.
Simultaneously, FYI believes emerging HPA projects must adopt ESG metrics and focus on sustainability as they garner attention on a global stage.
As it progresses work on its ESG reporting and performance, FYI has vowed to update the market regularly.