The Switzerland-based Responsible Mining Foundation (RMF) published its annual report on Wednesday. This reported on an inspection of 40 large mining companies across 250 mine sites in more than 50 countries. Mines were assessed on several ESG issues, including their engagement with local communities, working conditions, and efforts to minimise environmental impact. The report also looked at how companies balanced gender opportunities and how well they protect human rights on site.
The report begins: “The vast majority of the assessed mine sites cannot demonstrate that they are informing and engaging with host communities and workers on basic risk factors such as environmental impacts, safety issues, or grievances.”
For mining sites that kept adequate ESG data, the report found that no site scored more than 50% on its assessment criteria. Most sites with adequate data fulfilled between 1% and 9% of the report’s ESG criteria, while 16 of the 250 assessed scored 0%.
Anglo-American scored best on most assessed criteria, with AngloGold Ashanti and Newmont also consistently performing better than others. However, in no measure did any company comply with more than 70% of the reports assessment criteria. In most respects, assessed companies averaged 25% compliance with expectations.
Uneven progress in mining ESG issues sees little improvement
In some areas, such as maintaining equal opportunities for all genders, the assessed companies performed noticeable poorer. In this respect, the 40 assessed companies averaged a compliance of approximately 10%. The report stated that: “There is not only a lack of evidence of systematic measures on gender equality, but also very limited evidence of any action on gender, even on an ad-hoc basis.”
Despite recent disclosures by Rio Tinto showing the scale of discrimination within the company, the company performed better than average. The company faired significantly better for its adoption of ethical corporate governance and transparency, complying with almost 60% of the report’s standards.
However, the report praised progress “on a few issues”, including increasing use of a living wages and disclosing the locations of tailings sites. The report found that since its first publication in 2020, companies with terrible ESG assessments had improved faster than those with more mediocre assessments.
The report stated that “formal ESG commitments are becoming the norm” but the gap between stated commitments and actual impacts had not significantly closed in the past year. Report authors also highlighted gaps within companies, writing: “There is little correlation between the existence of corporate systems on specific ESG issues and evidence of mine-site action on these same issues.
“For example, most companies show some level of corporate protocols for their operations to engage with other water users on water management and to engage with worker representatives on occupational health and safety. However, only a minority of the 250 assessed mine sites show any evidence of having implemented these requirements.”
“ESG risk is a low-hanging fruit that is highly preventable”
At a webinar accompanying the release of the report, RMF CEO Hélène Piaget spoke of the importance of encouraging a culture of ESG compliance. She said: “We spoke to one ESG officer who worked to implement a reporting framework at their company. They told us that they could talk to corporate staff, but could not ‘bother’ site workers, because they were busy ‘doing the real work’.”
Luc Zandvliet, lead of social performance practice at ESG consultants Triple R Alliance, agreed: “ESG risk is highly predictable and therefore highly preventable. It’s a low hanging fruit, often overlooked. I’m interested to see that, when asked what keeps them awake at night, CEOs always rate ESG risk in their top three. However, they also let the ESG specialists go, because they haven’t made the connection that these risks can be controlled.
“Collectively, we need to do a better job of showing a link between these changes and risk management.”
Speakers also touched on the lack of standardised reporting methods for ESG factors in mining, which contributes to the lack of data in the RMF study. International Council of Mining and Minerals (ICMM) CEO Rohitesh Dhawan said that all regulators and companies “would be better off if we aligned around a smaller number of standards”.
He also pointed towards the ICMM’s upcoming framework for reporting socio-economic factors, which include reporting standards for incidents of workplace sexual assault. Alongside this, the trade body recently released reporting standards for mining tailings. Dhawan said that regulators “could not afford to shift their eyes off the ball” for standards, which would demonstrate a “need to redefine the social contract for miners, by showing how [standards] can work”.