Newmont leads global mining sector in ESG rankings
Environmental, social and governance (ESG) issues have moved to the forefront for many of the world’s mining companies. Pressure from investors and regulatory agencies has encouraged mining companies to create policies to improve ESG performance. According to one recent study done by London-based Alva, these efforts are helping to improve the perception of mining with Newmont Corporation leading the way.
Overall, an environmental, social and governance rating of the industry moved into positive territory last quarter from a negative reading in the previous three months, according to London-based Alva, which assigns scores based on publicly available content from social media to NGO research.
Newmont Corp. retained the lead in the 20-company index followed by De Beers, “with these companies’ proactive commitments significantly outweighing sporadic instances of ESG negativity,” according to an Alva presentation.
Rio Tinto Group improved its score but continued to be weighed down by explosions that damaged two Aboriginal Australian sites. Another iron-ore giant, Vale SA, fell to last place as it tries to reach a compensation deal for the Brumadinho dam disaster in Brazil. Community relations remained mining’s most negative topic, while greenhouse gas emissions and energy management scored positively.
The report noted that various companies announced or updated 2030, 2040 and 2050 sustainability goals which was perceived well by stakeholders. Newmont, De Beers and ArcelorMittal scored the best in this area.
“Similar commitments to the Copper Mark standard drove positivity for Freeport-McMoRan, BHP, Antofagasta and Rio Tinto, with this action generally straddling various strands of ESG such as community and environmental impact, helping demonstrate these companies’ holistic approach in this space,” the report stated.
Health and Safety emerged as a leading risk in the Q4. While much of the negativity centered around the long-term legal and community implications of historic dam failures – most notably for Vale and BHP – health or safety incidents involving Anglo American, BHP, Glencore, ArcelorMittal, Rio Tinto and Vale increased the perception of risk for the mining industry on this topic, prompting concern among stakeholders.
“This impression on health and safety presents opportunities for mining companies to demonstrate their commitment to improving material performance moving forward,” Alva reported. “Companies could look to make health and safety commitments central pillars of any long-term commitments they make and utilize technology in the vein of Newmont’s use of Esri’s Site Scan for ArcGIS cloud-based mapping software to challenge this perception in 2021.”
Companies around the world, particularly raw-material producers, are stepping up sustainability efforts amid heightened scrutiny by the general public and investors. ESG and value-focused exchange traded funds recorded net inflows of $89 billion in 2020, almost three times 2019 levels, according to Bloomberg Intelligence.