Australian miners: Leading the pack on ESG in Africa
Over the past few months, despite witnessing strained supply chains, some government-mandated shutdowns and huge reduction in international travel, Australian metals and minerals companies operating in Africa have largely escaped the immediate impact of the COVID-19 crisis.
And while financial markets have largely bounced back and the reintroduction international travel will restore both supply chains and the movement of workers, what will stay in place long after the pandemic is eradicated is a shift in global business culture.
The crisis has in many ways highlighted that the world has become much more of an interconnected network, where people, planet and the economy are intrinsically linked.
It has also brought about renewed focus on good governance, as we ask the question: “When times get tough, will companies do the right thing?”
If AAMEG’s members’ response to COVID-19 in Africa is anything to go by, the answer is a resounding yes. A number of explorers and miners have donated millions of dollars to combat the pandemic in West Africa.
Drawing on their vast procurement and logistical expertise, our members have provided both direct financial support and medical supplies, including large tents for testing and treating patients, COVID-19 testing kits, medical masks, gloves and other essential personal protective equipment (PPE), as well as clean water, soap and hand sanitiser stations.
The supplies are being provided to hospitals, medical clinics and communities surrounding the companies’ mining operations, as well as central facilities.
Of course, this isn’t just a one off display of social cohesion, but an ongoing and essential part of their operational strategy and meaningful contribution to civil society in host communities.
Beyond supplying the metals and minerals we all rely on for modern life, the industry is vital for the economic health of resource-rich and resource-dependent countries and also plays an important role in catalysing social development through job creation and community programmes.
The focus on environmental, social and governance (ESG) issues is only likely to intensify in the coming months, as concerns around climate change, wealth inequality and biodiversity are magnified through a post-pandemic lens.
And as the resources sector fires up once again, governments, investors and consumers will be watching to gauge their next move—with a continued focus on changing the energy mix to include new technologies and materials as well as helping eradicate corruption and protect human rights.
What’s more, the measurement and reporting of ESG factors, which help investors, NGOs and government evaluate and compare a company’s environmental, social and governance performance alongside traditional financial metrics, is gaining momentum with investors worldwide.
“Prior to this crisis there was a meaningful and increasing focus on ESG investing,” Goldman Sachs said in a recent note to clients. “And it is likely that this focus will only increase following the coronavirus.”
Indeed, Chicago-based financial services firm Morningstar found that sustainable funds attracted record inflows in the first quarter, even as the pandemic rattled worldwide markets.
This trend is mirrored in Australia, where fund researcher Rainmaker showed sustainable funds have returned on average 1% more than their counterparts during the quarter ended 30 March, and four of the top-five balanced personal options were ESG funds over the last twelve months.
Considering these factors, AAMEG believes now is a more important time than ever to foster a greater understanding of ESG, and as such as we’ve convened a new ESG Forum.
The forum’s mandate is to advise our members on best practice strategies for balancing stakeholder returns with sustainable long-term investment and ESG principles.
We’ve conducted a survey to ascertain the greatest areas of need and interest across the industry, and will be holding regular professional development workshops and talks to guide and equip our members in this regard.
Our second annual AAMEG Africa Awards, taking place in November as part of the Africa Down Under conference in Perth, will again recognise organisations that champion a transparent, equitable and mutually beneficial mineral resources industry in Africa.
We welcome nominations from mining companies who aspire to enable the local communities surrounding their operations to be engaged meaningfully to reach their full potential, as well as contribute more broadly to the host country’s socio-economic development and sustainable growth.
For more information about ESG strategies and the Australian mining sector in Africa, click here