__Mining & Metals
Will COVID-19 slow progress on ESG issues in the mining & metals sector?
Our special midyear survey highlights tensions between imperatives to advance ESG objectives and cut costs
Environmental, social and governance (ESG) policies were top of mind for industry decision-makers who responded to our fourth annual mining & metals survey in fall 2019. More than one quarter (26 percent) said ESG policies would be the mining sector’s main priority in the coming year, making it No. 2 after productivity gains, which 28 percent of the respondents named as the top concern.
The importance of achieving ESG goals was emphasized in February when the International Council on Mining and Metals, an industry body of nearly 30 of the world’s largest miners, introduced Mining Principles focused on various ESG objectives, including pollution, human rights and diversity. Then came COVID-19, which effectively put the world’s economy on ice and sent one-third of the planet’s population into some form of lockdown.
In response to the pandemic’s extraordinary impact, we conducted a special midyear survey in which only 13 percent of respondents named ESG policies as the mining & metals sector’s main priority. The No. 1 concern, according to 27 percent, had become building resilience. And long-term sustainability initiatives were expected to conflict with the need to cut costs, according to 65 percent of the respondents.
The results of the survey reflect an industry wrestling with contradictions. Eighty percent of the respondents expected ESG issues to play a greater part in investors’ decision-making, and almost one-quarter of the respondents indicated ESG would allow the industry to build resilience.
COVID-19 and the growing global focus on social justice have only made customers, suppliers and investors more likely to insist that mining operations improve diversity, promote human rights, reduce their carbon footprint and establish stricter measures to protect employees’ health.