Column: Global miners rank ESG as their top concern. Really ? : Russell

LAUNCESTON, Australia, April 27 (Reuters) – Environmental, social and governance (ESG) issues are the top concern of global miners, eliminating commodity price risk for the first time, according to a new survey.

KPMG said it was a “significant milestone” as ESG topped the list of industry risks for the first time in its 12-year-old Global Mining Outlook.

While commodity price risk fell to second place, another closely related ESG issue, namely community relations and social license to operate, came in third place.

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Rounding out the top five risks, political instability and nationalization rank fourth, and global trade disputes fifth.

The top five risks for global miners neatly encapsulate the short-term issues as well as the overriding long-term factor in the fight against climate change and decarbonization.

The question leaders should answer is how they prepare their companies to deal with longer-term risks.

KPMG stresses that overcoming challenges provides opportunities “to invest in innovative ways and to adapt at a faster pace.”

The survey, released on Tuesday, shows that 72% of mining executives agree or strongly agree that “ESG will be a major cause of disruption in the industry over the next three years” .

If mining executives really believe this, it seems somewhat odd that they haven’t yet revamped and refocused their management structures and efforts to reflect this view.

None of the largest publicly traded Western mining companies has an executive with an ESG director title, and only one has someone with a somewhat similar title.

Although some companies have executives responsible for ESG, they also tend to have several other responsibilities, which raises the question of how much time and effort is spent on ESG.

For example, BHP Group (BHP.AX), the world’s largest mining company, listed Caroline Cox on its website as Director of Legal, Governance and External Affairs, a position she held. in November 2020.

Interestingly, his legal role takes precedence over the title, and it’s also worth noting that Cox has what could best be described as a very low profile on social media.

An internet search of his name reveals only a small number of articles, mostly about his nomination and certainly very little about his role in preparing BHP for the ESG challenge.

At Rio Tinto (RIO.AX), it’s much the same story, with the company’s website not listing an executive with specific ESG responsibilities, the closest being Isabelle Deschamps, who is chief legal and business officer. external.

Appointed in November 2021 after Rio’s reputation was hit hard by the destruction of ancient Aboriginal caves in the Western Australian state, Deschamps also has a low profile on social media and the internet.

Glencore (GLEN.L) does not list any executives responsible for ESG in its management team, while Brazil’s Vale (VALE3.SA) appears to share responsibility between two of its executives, although it cites Maria Luiza de Oliveira Pinto e Paiva as Executive Vice President of Sustainability.

Among the top miners, perhaps the most high-profile executive is Anglo American’s (AAL.L) Anik Michaud, Group Director of Corporate Relations and Sustainable Impact.

But while she has a more active presence on social media sites such as Twitter and LinkedIn, she doesn’t appear to be a major contributor to the ESG debate.

Rather, ESG issues at major mining companies are largely left to individual CEOs, such as when several committed their companies to achieving net zero carbon emissions by 2050.

But these commitments are often criticized as being vague and lacking a clear path of firm commitments over specified time periods.

Overall, while the inner workings of individual mining companies differ, it does not appear that the majors have aligned their management structures and efforts with what they have told KPMG as their primary concern.

It’s not that mining companies don’t have good stories to tell. After all, they will be responsible for producing the raw materials, such as copper, nickel and lithium, needed for the global energy transition.

But maybe they should lead the discussion on how to boost production while decarbonizing their operations.

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Editing by Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias by principles of trust.

About Charles D. Goolsby

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