Abstract
Across the world, social pressures and coordinated activism are demanding more from businesses of all kinds. Whereas environmental, sustainability, and governance (ESG) considerations were once primarily oriented around environmental issues, a broader range of considerations pertaining to society and governance are increasingly relevant to transactions in the mining and metals industries. Investors increasingly demand and expect tangible action, rather than a simple articulation of vision. This is informing strategy and capital allocation as companies grapple with issues such as protests against particular investment choices, to long term societal movements chipping away against social license of operate through online activism, to fast-building popular movements shaking political stability and local security environments.
COVID-19 has exacerbated the underlying grievances already driving protest activity worldwide and has emphasized the significance of social and governance issues for operators and investors. ESG due diligence cannot be a simple check-the-box exercise, but is increasingly an essential requisite for operational success owing to the fact that unless issues have been identified, they can’t be addressed. A strategic approach to social issues, stakeholder management, and community engagement is critical for successful project execution and for unlocking value.
John Seddon, Principal at Control Risks, provides 3 tips for effective social risk diligence, and discusses how companies in the mining and metals industry can successfully manage the reputational and operational risks they face globally.