• Sustainability & ESG Reporting in the Resources Sector
    Sustainability & ESG Reporting in the Resources Sector

    Although it has been 30 years since the 1992 Rio Earth Summit produced a comprehensive plan for sustainable development, most of the same global and local issues still exist at a greater and more urgent scale. For corporations, while 80% of companies worldwide reported on sustainability in 2020, their responses represent a wide range of commitments, actions and impacts.

    Mainsheet recently completed a comprehensive ESG and sustainability benchmarking review for one of our clients in the resources sector. We then worked with the company to agree an ESG Reporting Roadmap for the next 1-3 years and the implementation plan for FY22.

    Why Review your ESG Reporting

    • Financial impacts of ESG are taking a front seat 窶 The group of voices that are demanding action from corporations have changed. Communities and NGOs continue to put pressure on corporations but are now joined by a large and impactful group of stakeholders of Board members, investors and financial institutions. These stakeholders are expecting both evidence of sustainability action and disclosure of the financial impacts of ESG, especially climate change, in order to support companies in the future.
    • The ESG reporting landscape is complex and rapidly changing 窶 The sustainability reporting landscape has become increasingly more complex, in terms of reporting frameworks, metrics, regulators and growing momentum towards global sustainability-related financial reporting standards over the last two years.
    • Focused reporting saves time and money 窶 The sustainability and climate change reports generated by large and mid-tier companies are substantial and represent a significant commitment in terms of both investments and resources. Identifying the material ESG issues for each company窶冱 reporting will both save considerable time and resources as well as ensure the most impactful issues are addressed.
    Key Findings from Our Recent Review

    Findings from our most recent resource sector ESG and sustainability benchmarking review include:

    • Most widely used standards and frameworks 窶 The most widely used reporting standards and frameworks in the resources sector are:
      • The Global Reporting Initiatives (GRI) Standards
      • The Sustainability Accounting Standards Board (SASB) standards
      • UN Sustainability Development Goals SDG
      • The Task Force on Climate Change Related Disclosures (TCFD)
    • Changes in standard setting agencies 窶 Recent consolidation activity led by the new IFRS Foundation窶冱 International Sustainability Standards Board (ISSB) suggests existing frameworks such as SASB and TCFD are likely to continue to form the basis of the financial sustainability metrics and measures. We also anticipate the GRI and SDG frameworks are likely to continue to remain relevant for reporting of non-financial disclosures to a broader group of stakeholders.
    • Changes in investor requirements 窶 Large asset owners and asset managers such as Black Rock, State Street, Goldman Sachs and debt providers are now actively encouraging investee companies to adopt SASB and TCFD as industry-specific, metric-driven frameworks focused on financial materiality.
    • Focus on the reporting effort 窶 Sustainability reporting for many of the larger companies represents a significant commitment in terms of both investment and resources. For mid窶鍍ier companies it is critical that recommendations are focused on the top ESG priorities.
    • Large companies 窶 There is a clear delineation between large/multinational producers, mid-size producers and developers. Large multinationals tend to represent best practice and report across multiple frameworks. The larger companies all have a separate detailed sustainability and climate change reports, report on scope 1, 2 and 3 emissions and have a separate detailed modern slavery statement. In most cases the reports are assured by external parties.
    • Mid-sized companies 窶 Mid- sized mining producers are typically using SASB and GRI for sustainability reporting, and TCFD for climate change reporting. They typically report only on Scope 1 and 2 emissions and have a separate and increasingly more detailed modern slavery statement.  
    • Explorers/Developers 窶 Most mining companies in the developer category are in the process of building their capability and developing their response to the increased market focus on sustainability. Many developers have announced intent to commit to the TCFD sustainability reporting framework and are mapping existing sustainability reporting actions and plans across a subset of the United Nations Sustainability Development Goals or the International Council of Mining and Metals Principles.

    How Mainsheet Can Help

    Mainsheet Capital can work with you to carry out a comprehensive industry sector and sustainability benchmarking review for your company, develop reporting roadmaps and carry out an ESG materiality assessment.

    We also work with executive and management to ensure alignment to any ESG reporting recommendations.

    If you would like to talk to us about our ESG and sustainability reporting and benchmarking , please contact Bill Bent or Stephen D窶僊lessandro.

    Mainsheet Capital has also demonstrated capability in creating value through corporate strategy, whilst understanding that ESG has changed the drivers of value. We also specialise in the development of decarbonisation and power procurement strategy.