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ESG tops risk rankings

or all the current talk about COP26, has been,” Rundus
F2050 net zero and decarbonisation, told Paydirt. “Compa-
it is the wider suite of ESG issues which nies need to increase
mining sees as the biggest business risk transparency and be
for 2022, according to a new report by EY. consistent across the
ESG ranked as the No.1 risk concern reporting spectrum.”
in the survey of more than 200 global As the report title
mining executives, with decarbonisation suggests, many miners
and licence-to-operate following in sec- are seeing opportunity
ond and third. as well as risk in issues
Discussing the Top 10 Business Risks such as ESG, decar-
and Opportunities for mining and met- bonisation and licence-
als in 2022 report, EY global mining and to-operate.
metals leader Paul Mitchell said the pan- “Companies which
demic had only accelerated progress on demonstrate the best
sustainability. performance on ESG
“Environment and social issues have and other issues will
emerged as a surprise top risk, which have an advantage,”
means miners need to think more broad- Rundus said. “Decar-
ly about which factors they consider; so- bonisation strategies, for instance. De- increased employee awareness about
cial impact, water management and bio- carbonisation is coming at us at pace, the top three risks,” Rundus said. “Min-
diversity came through as strong areas and I think miners who treat it as a strat- ing companies will have an opportunity
of focus for 2022,” Mitchell said. egy rather than simply an issue of com- to engage the workforce and improve
“As stakeholders continue to hold min- pliance will have advantages. the employee value proposition to show
ers accountable for environmental and “Most miners have made commitments good work and good intent in their prac-
social practices; purpose, long-term tices.
value and sustainability are no longer “We are already seeing examples of
add-ons to business as usual – they are employees really buying into the clean
themselves business as usual. In such energy initiatives of their companies and
an uncertain and shifting environment, this will become important in attracting
we are likely to see greater use of data and retaining talent in the future.”
science, scenario planning and data Geopolitical concerns also weighs
modelling to guide more intelligent deci- heavily on miners (No.4) with 77% of re-
sions and create differentiation.” spondents saying geopolitical challeng-
EY Oceania mining leader Mike Run- es were forcing them to alter strategic
dus admitted surprise that it was the investment. Among the factors fuelling
broader issue of ESG which came out these concerns were changing govern-
at No.1, ahead of decarbonisation which ments and social upheaval (including in-
has dominated so many corporate and creased royalties and taxes), trade policy
government conversations in the last Paul Mitchell shifts (particularly the US-China trade
year. He said it was perhaps the den- relationship) and regional investment in
sity of the entire ESG suite which saw it around net zero by 2050, but how many critical minerals.
emerge as the top risk over the specific- have an actual strategy to get there? Cur- Risks around access to capital and
ity of emissions reduction. rently, there is a critical reliance on de- uncertainty of demand came in fifth and
“There is no doubt the whole ESG carbonising their energy requirements, sixth, both of which link back to ESG,
agenda is far more complex than it ever but many haven’t really looked at Scope licence-to-operate and geopolitical is-
3 emissions yet.” sues.
Those companies who find positive Rundus said other risks would likely
decarbonisation strategies will likely find to emerge in 2022 but miners who ap-
benefits beyond avoiding legislative re- proached them strategically and proac-
strictions. tively would succeed.
“There is no doubt we are seeing ESG “We think the next 12 months will see
and decarbonisation affecting invest- issues around water management and
ment decisions by the majors and mid- biodiversity gaining momentum,” he
tiers,” Rundus said. “Capital is being said. “We are seeing mine closure and
deployed on projects which meet ESG rehabilitation, making sure they’re doing
requirements.” the right thing and not just the minimal
It could also ensure miners can attract required.”
and retain the best and brightest young
talent to the sector. – Dominic Piper
Mike Rundas “In the last 12 months, we’ve noticed

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