Environmental, Social and Governance (ESG) criteria refers to a set of standards for a company’s operations that socially conscious investors use to screen potential investments. These criteria consider how a company performs as a steward of nature, it examines how a company manages its relationships with employees, suppliers, customers and the community and lastly, investigates how the company is governed, taking into account such factors as the company’s leadership, executive pay, audits, internal controls and shareholder rights. ESG reporting goes above the normal financial and sustainability reporting and reflects the businesses objectives and how it aligns with its vision, mission, and values.
ESG reporting has grown considerably in its importance to the investor community, among global calls for reducing carbon footprints, combating poverty, promoting healthy and safe labour parties and environments, and tightening corporate governance. This indicates the growing conscience of the investor and indicates the importance of developers and existing developments to openly and truthfully disclose its ESG information. This considerable interest in information relating to corporate sustainability and how companies are addressing and approaching relevant ESG topics is continually increasing.
ESG criteria help investors find companies with values that match their own. The importance of indicating intent as a developer must start as early as possible. This will help match the company’s ideals with suitable investors as well as help ensure that the developing company can keep on the right moral and ethical path before development occurs. This will set in place the required environmental, social and governance requirements, policies and plans to ensure that all activities can occur in a manner that is safe, fair, and equitable.
ESG reporting is an excellent tool to use to help identify possible risks and address them accordingly and creates a brilliant opportunity to illustrate how risks are identified, managed, mitigated, and resolved. Additionally, access to finance to help ensure the development of any large-scale long-term development from large international lenders (like the World Bank, IFC etc), are ever more dependent on ethical and transparent ESG expectations and actions. These expectations are not only gaining importance in influencing long-term decision making by financial analyst but are also extremely important for site and asset allocation. This generates the opportunity to help identify possible positive and negative impacts, as well as ensuring that the negatives are mitigated and managed and that the positives are promoted. This will help the growing number of ESG conscious investors make the right choice.
This then clearly highlights the important role and relevance of ESG activities and reporting during the exploration phase of a mining project. This will help ensure suitable, ethical, and reliable investment, as well as help ensure that the required risk and impact management measures are appropriate, efficient and operational. By ensuring the correct implementation of ESG policies and plans, as well as the transparent disclosure of information from this early stage of the project, the developers and investors can be sure that the project can occur in an environmentally friendly, socially inclusive and transparent manner.