A very simplistic summary of the LME's approach to responsible sourcing is that it uses the Organization for Economic Co-operation & Development(OECD) red flag scheme and a phased introduction of transparency, but Matthew Chamberlain is keen to explain the "two big philosophical pillars behind it."
The first is about establishing the LME's role in delivering responsible sourcing. "There are some in the market who say that the LME should have nothing to do with this, that responsible sourcing is a matter for government or legislation or even individual consumers," the London Metal Exchange chief executive officer told Fastmarkets in an interview for the Metal Market Magazine in September.Chamberlain consequently said that the biggest challenge the exchange had with the project was answering the question as to why the LME is getting so involved. He explained that the answer to that is two-fold."First, it's a commercial driver, because we did see with our cobalt contract that the presence of brands where there were questions about responsible sourcing provenance did have an effect on price and that had an effect on...