Getting ESG right is good for you

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Next week’s Mining Indaba in Cape Town will be an opportunity for miners to share best practice and news of corporate progress. I hope these conversations take note and reflect the interesting reports on the positive impact strong ESG practices are having on operational and stock performance.  

This weekend the Mining Journal highlighted these trends in their article Good ESG practices lead to better operational, stock performance

  • According to the biannual authorized sustainability reporting survey conducted by the global accounting firm KPMG, about half of all companies now report climate risk in their financial reporting. This risk has increased significantly, especially in the last two years.
  • In a study conducted by global asset management firm Arabesque in conjunction with the University of Oxford, 88% of the 200 studies analysed showed that good ESG practices lead to better operational performance. In comparison, 80% showed that positive sustainability practices improve stock price performance.
  • To reach net zero globally by 2050 means that up to six times more minerals will be needed in 2040 than today for a faster transition to these technologies, which will require lithium, nickel, cobalt, graphite, copper, aluminium, and rare earths.
  • Mineral requirements are expected to quadruple for clean energy technologies, which will require far more minerals than their counterparts by 2040 to meet the targets of the Paris Agreement.
  • Companies that do not take ESG factors into account or do not take the necessary precautions are at a higher risk and may lose the investment, have difficulty in obtaining a social license for the sites they operate in, experience supply shortages, be directly exposed to climate risks in water-stressed areas, and experience difficulties associated with conflict-affected or high-risk areas.

As the report concludes, “As a result, for the development of societies/sectors according to the highest possible ESG standards, it is vital for individuals and stakeholder-centred companies to change their behaviours, raise their awareness, and cause the formation of governance resources to support them in this regard.”

TCCS specialises in community communications training and consultancy. We build our clients internal capabilities, so everyone is better placed to oversee and deliver programmes with social impact, providing assurance around the S of ESG. Find out more about how we can help you improve your operational and stock performance, get in touch.

Giles Bancroft
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