Keynote features mining experts on environmental, social and governance factors

From left, Kim Morrison, Aidan Davy, Ryan Bond, Casey Nault and Kelly Ward. Below, Steven Schafrik, program chair, chats with Steve Gardner, 2015 SME President. The opening keynote for the MINEXCHANGE 2023 SME Annual Conference & Expo in Denver, CO on Feb. 27 covered a topic that is top of mind for many practitioners of the mining industry today: that of environmental, social and governance (ESG) issues. Although many in the mining industry have embraced these factors in their mine planning and operations for years, if not for their entire existence, the acronym “ESG” has come into prominence in recent years. This is in part a response to climate change and global warming, the 2030 and 2050 emissions reduction goals and commitments made by many nations as well as companies in the mining industry, social unrest and injustice issues worldwide, and the fact that climate change is disproportionately affecting poorer countries and people. An increase in catastrophic surface tailings storage facilities since 2001, and in particular, the 2019 tailings dam failure at the Córrego do Feijão iron ore mine in Brazil thrust ESG to the forefront for the global mining industry. An estimated 270 people died as a result of the failure and the consequences of the failure reshaped the way the industry, investors and insurers view tailings facility safety. Shareholders and stakeholders are now demanding that companies take significant and effective steps to address these topics. ESG is now a topic for many industries, whether the activities surrounding it fall under the name corporate social responsibility (CSR), ESG, or simply having and sharing good old-fashioned effective public and community relations practices, transparency and action is a must for today’s mining companies. The keynote talk, “Embracing ESG to build trust in mining investments” was moderated by Kimberly Morrison, senior director, Global Tailings Management, Technical Services, Newmont and Kelly Ward, vice president of Mining, Metals & Minerals, Marsh. Panelists included Ryan Bond, head of Climate and Sustainability Insurance Initiative, Marsh; Aidan Davy, chief operating officer, International Council on Mining and Metals (ICMM) and Casey Nault, senior vice president, general counsel and chief ESG officer, Coeur Mining. The discussion centered on the fact that institutional investors are demanding increased attention on ESG and looking beyond the financial performance of companies. Insurance companies are also considering ESG factors and performance in their pricing and terms. Bond discussed recent anti-ESG sentiment and challenges around ESG and mining, and questions by the public surrounding whether companies’ efforts in this realm are effective. He explained that in the insurance world, much consideration is being given to the same ESG topics as other sectors of the industry including that of determining value propositions and having ongoing conversations about ESG. “It needs to be debated from an insurance perspective,” said Bond. He explained that although many of the topics related to ESG have become political hot buttons in the United States, insurance considerations are global, and he is not seeing the same political battles surrounding climate change playing out elsewhere in the world. “Delaying progress of applying [ESG] concepts might eventually lead to rushing, and unintended consequences,” Bond said. Davy said that the anti-ESG sentiment has “echoes of 50 years ago” on the social responsibility of corporations and is reminiscent of the findings of Milton Friedman, a 1970s U.S. economist and statistician. Davy believes that the political and practical dimensions of ESG are what is driving this sentiment. A case in point he discussed is that of 19 U.S. attorneys general who in Texas are challenging BlackRock, an American multinational investment company with assets of $10 trillion, stating that it is using state pension fund assets in ESG that force the phase-out of fossil fuels. “Meanwhile, we have city officials saying, ‘You’re not moving fast enough,’” said Davy, in regard to the dichotomy many companies face on addressing ESG topics. There are now ESG rating agencies too, and they are rating mining companies based on their ESG efforts and linking that to the financial health of the company. Nault discussed the investor side of ESG, long-term value and investor management. “These are the priorities of the people who own our company,” he said. Cash flow, reducing costs and ESG are all prominent topics. He said investors are now asking about ESG initiatives, giving encouragement on steps being taken, and sharing their expectation that when they next talk, more will have been done at the corporate level. Kelly Ward asks a question during the keynote address at MINEXCHANGE 2023. According to Nault, Coeur Mining, by embracing diversity, equity and inclusion in its hiring practices, has seen a correlation with lower risk to the company and a widening supply of talent in its hiring pool. “Our stakeholders are also employees and community members,” he said. Davy said that ICMM sees parallels among social performance commitments and risk. “Insurance looks through the lens of opportunities and benefits. There must be clear and specific performance issues and they must be important issues,” he said. Davy encouraged audience members to set short- and mediumterm targets for achieving net-zero emissions as 2050 can seem far away while near-term targets must be addressed. “How are you going to get there?” he asked attendees, encouraging setting these targets along the way for Scope 1, 2 and 3 emissions. Morrison, who is the editor of the Tailings Management Handbook: A Life-Cycle Approach, published by SME in 2022, posed questions for the panelists related to tailings management. “How has the investment and technical community worked (or not) together?” There was discussion about the fact that the mining community effectively came together to create the Global Industry Standard on Tailings Management (GISTM). The power of that process, involving multi-stakeholders from the start, is what led to the establishment of these exacting industry standards. Adapting them can be tough, but doing so is now seen as necessary to being a responsible producer. Bond said that ESG is the framework for sustainability. He discussed the fact that insurance and water are key commodities to operating mines, while Davy said that the ICMM started looking at a comprehensive approach to water management in 2015. “The risks are likely to intensify, not decline, and this involves financial risk too,” said Davy. Ward said that from her experience working in consulting, “Every mine has a water problem: either too much or too little.” There was also discussion among the panelists of biodiversity, wildlife protection, and the social riskmanagement prong of ESG. The moderators posed a question to the panel, “Is it logical for investors to drive technological changes related to ESG?” Nault, in response said, “Governance is the unsung hero of ESG. There is often encouragement there to keep going, and to keep the efforts strong.”

Keynote features mining experts on environmental, social and governance factors

Authored by:
Nancy Profera

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