Global mining executives rank environment, social and governance (ESG), decarbonization and license to operate (LTO) as the top three risks facing their business over the next 12 months, finds the EY Top 10 business risks and opportunities for mining and metals in 2022 report.
“It’s clear that purpose, long-term value and sustainability are no longer add-ons to business as usual — they are business as usual,” explains Theo Yameogo, Americas Mining & Metals Leader. “Companies that can demonstrate they are operating in the best interests of a broad group of stakeholders can maintain their license to operate and gain a competitive edge in the fight for capital and new assets.”
While many conversations in the market currently focus on energy transition and the road to decarbonization, 25% of survey respondents rank environmental and social issues as the number one risk to their business — indicating broadening expectations around issues such as biodiversity, social impact and water management are top-of-mind. In response, miners say they are beginning to integrate ESG factors across corporate strategies, decision-making and stakeholder reporting.
“Navigating ESG is increasingly challenging given the breadth of issues the sector continues to face, coupled with the myriad of reporting standards they need to adhere to,” says Yameogo. “Expected boosts in investment towards digital transformation and innovation will be critical to help companies diversify and differentiate, while allowing them to address emerging risks with a purpose. Possibilities include improving onsite health and safety, helping transition to net zero, producing greener outputs or responding to increasing ESG measures from capital markets.”