Mining steps up on ESG

Companies that are on board with environmental, social, and governance principles will benefit
Mining steps up on ESG

ESG (environmental, social, and governance) considerations have been with the mining industry for decades. Mining companies have long been aware of how their operations affect external stakeholders and how that can impact their business in the longer term.  

While ESG as a concept has not changed, its implementation on the ground has evolved tremendously.  

“We’re seeing that the focus of mining companies has adapted from simply meeting environmental standards to looking at broader matters of environmental stewardship,” says Robin Longe at Dentons Canada LLP.  

And it is not just environmental concerns that keep mining executives up at night. Partnering with Indigenous peoples and new business models are also top of mind, according to an EY (Ernst & Young) survey of mining executives. 

Yet this same survey also found a perception of “more opportunities than risks for miners willing to make the transformational changes that can drive long-term value for organizations and the communities they serve.”  

One major shift is ensuring ESG concerns are more than just superficial commitments. “There is going to be a move away from boilerplate language,” says Jen Hansen at Cassels Brock and Blackwell LLP. “It won’t be enough for regulators and stakeholders alike.”   

“ESG has gone from a ‘nice to have’ element of corporate strategy to a ‘must have,’” says Andrew McLaughlin at Major Drilling, “as investors, customers, and those in the company’s supply chain demand more from mining companies.”  

Enhanced ESG disclosure can also create opportunities for companies to attract investors and lenders have publicly committed to these issues when making investment decisions. 

Some see the mining industry as a contributor to ESG problems, especially environmental issues. Yet, the move away from fossil fuels has also put the mining industry at the centre of some solutions.  

The rise of electric car technology and interest in driving electric cars has meant that critical minerals such as lithium and copper – components in making batteries – have become an essential part of sustainability, says Ravipal Bains at McMillan LLP

As the legal experts in this Special Edition will attest, ESG considerations will continue to evolve and deepen. The mining companies that are on board, and their external stakeholders, only stand to benefit.