Has the global mining sector ever faced such a tipping point as it does now – confronted by continuing market uncertainty due to the ongoing COVID pandemic, as well as the rapid increase in environmental sustainability questions being posed by investors, governments and local communities?
Some in the mining sector might be inclined to ignore these headwinds – arguing that its unique position at the core of global industry will insulate it from the tough decisions many in business now face. We believe that would be a mistake. The current volatile landscape presents an opportunity for genuine, transformational change in the industry and most of the major mining companies are better placed financially than most companies in other fields to pivot towards long-term value and growth. Now is the time for miners to make their low carbon move.
As our recent Mine 2021 report laid out, ESG will provide a working roadmap for building trust and sustainable growth at a time when mining really needs to prove it understands just how quickly the world is changing.
Moving forward, the mining industry will need to demonstrate that they not only understand the risks and opportunities of ESG but are committed to addressing them in everything they do. By doing so, miners can provide long-term value to governments, investors, employees and the communities they work in.
Companies that make this change do better commercially too. Our report found that mining companies with higher ESG ratings outperformed the broader market during the peak of the COVID-19 crisis, delivering 34% average total shareholder return over the past three years — ten percentage points higher than the general market index.