Metals and minerals will play a vital role in the global transition to a greener future, and mining executives now have a choice: let environmental, social and governance (ESG) issues run them out of business or use it as an opportunity to become leaders, GlobalData says in its latest report, ESG in Mining.
The data and analytics company says companies need to act quickly and decisively to become leader in ESG, including outlining a comprehensive ESG action plan and creating a dedicated sustainability team to deliver the outcomes.
GlobalData outlined an ESG framework in the report, asserting that companies must take a holistic approach to sustainability that addresses all three of its major aspects.
“ESG issues are the most important of this decade – with citizens, governments, regulators and the media demanding action from corporations to address these challenges,” says GlobalData analyst Luke Gowland.
Mining companies must perform well in all of the 12 aspects of GlobalData’s ESG framework: being a laggard in any one of these will hurt brand reputation and, ultimately, profits,” Gowland says.
Gowand says it is easy to find examples of lackluster governance in mining but much harder to find exemplary case studies.
“Companies that perform poorly in environmental and social issues likely do so due to poor governance,” he says. “In the wake of covid -19, corporate boards need to ensure their company performs financially while keeping ESG at the top of the agenda. Corporate boards must have diverse representation to achieve this or risk facing voting action from their shareholders. By appointing a more diverse range of directors to a board and empowering them, a company is more likely to be in tune with its employee base, a broad range of stakeholders, and society.”
GlobalData notes that early engagement with all stakeholders, including employees, shareholders and local communities is key for mining companies to excel at ESG.
Read the full report here.