Abstract

Mining and metals operators are increasingly integrating environmental, social, governance (ESG) into their business strategies. Stakeholder pressure, global uncertainty on financing and operating permits, and the need to secure the critical materials needed for a low-carbon economy are but a few drivers for increased attention to ESG. ESG performance is increasingly viewed as a key part of investment due diligence to boost productivity. ESG is reported to be the number one risk and opportunity faced by the mining sector, according to a recent Ernst and Young survey. The challenge operators face to reduce this risk is to consider ESG in both strategic planning and day to day operations, and to demonstrate how they are accomplishing these goals to their stakeholders. In addition, evolving regulations around ESG disclosure pose new risks. Many countries around the world are implementing ESG regulations that will affect companies’ operations within their jurisdictions. For example, the European Union has implemented a Sustainable Finance Disclosure Regulation (2019) to improve the transparency of sustainability risks and incentivize sustainable investments. This entails comprehensive ESG disclosure requirements for operators who are listed and work in multiple jurisdictions. An ESG lens must be applied in order to implement effective practices, guided by internationally acknowledged frameworks to prioritize and demonstrate their ESG commitment.

By integrating and applying these concepts, miners have the potential to deliver immense value by reducing carbon emissions, preserving nature, increasing biodiversity, and taking a long-term approach to water resources that includes the impacts of climate change. They are also finding value in reducing critical H&S risks and supporting the local communities in which they operate. The framework must demonstrate how these principles can form the steps toward achieving operators’ sustainability goals and be part of sustainable decision making by measuring project alternative impacts against a full range of ESG metrics. Metrics are needed to reflect priority ESG areas, that are based on internationally acknowledged responsible mining frameworks and sustainability standards to measure value. This framework will support the sustainability journey, help out-of-the-box thinking and allow comparison of hard-to-quantify externalities that are important to stakeholders. This presentation will provide case studies on the application of such a framework. We will demonstrate how strong ESG performance across the mining value chain and the life cycle of mining operations can simplify complex guidelines. - In addition, we will demonstrate how increased awareness and understanding of ESG at the site level acts as an added value to reporting companies and avoids superficial tick-box exercises on ESG practices, and most significantly reduces ESG risk.