ESG lessons from the 2020 Joburg Indaba

Leaders from the mining industry got together for two days to debate all things mining at the 2020 Joburg Indaba. For the first time in its eight year history, the annual event, sponsored by IsoMetrix, was held as an online conference due to the COVID-19 pandemic.

The chairman of the Joburg Indaba, Bernard Swanepoel, kicked-off the conference by welcoming attendees, thanking sponsors and organizers of the online event. In his welcome and introduction, he noted the advantages of hosting an online conference. "We have more international CEOs and investors participating than ever before, audience participation is easier via the online platform and the content will be available and accessible long past the event,” he said.

This year’s event was focused on how best to move forward as a country and industry post-pandemic. “The theme for this year’s online Joburg Indaba is: Reset. The world, South Africa and the mining industry are in a very different place compared to a year ago. Different responses, strategies and tactical approaches will be explored,” explained the chairman.

The Joburg Indaba, South Africa’s premier mining event delivered candid, constructive and honest conversations about the challenges and opportunities facing the industry. There was an impressive line-up of more than fifty speakers and nine sessions over two days.

Environmental, Social and Governance (ESG) lessons from the Joburg Indaba

IsoMetrix Premium Sponsor at the Joburg Indaba 2020

In a panel discussion about the responsiveness of the mining industry to an increased focus on environmental, social and corporate governance, panelists shared similar opinions that ESG was not a new concept in the industry and that it should be incorporated into overall strategy. The session was chaired by Nolitha Fakude, Management Board Chairperson at Anglo American in South Africa. Panelists in this session were:

  • Robin Bolton, Sustainability Executive at IsoMetrix
  • Peter Davey, Independent Non-Executive Director at Impala Platinum Holdings
  • Deshnee Naidoo, Mining Executive
  • Claire McMaster, Human Resources Executive Head at Fraser Alexander

“ESG is the topic of the year for 2020, especially with COVID-19 having exposed the inequalities in societies globally,” Nolitha noted the importance of ESG in the mining industry. ESG is increasingly being a value creator by many boards and executives. The increased focus on this concept is a result of the change in definition of what a successful business is. “The tone and the narrative from the top of many companies is definitely changing,” Deshnee explained.

The significance of ESG in the success of an organization cannot be downplayed. In Deshnee’s opinion, “Companies need to co-create and co-develop strategies with the entire stakeholder ecosystem for a more robust framework that covers ESG more holistically. A strong ESG strategy has various benefits including:

  • Higher employee attractiveness
  • High profitability
  • Improved risk management
  • Lower cost of capital
  • Influence on investments
  • Higher market valuation.”

Many industries acknowledge the value that ESG brings to their companies and are looking to fully incorporate it into their company cultures. A fully developed company culture in this regard is a shared responsibility. “ESG has a financial benefit for organizations. To cultivate a culture of ESG, everyone in the company has to understand that it is a shared responsibility not just the responsibility of organizational leaders.”

In addition to the benefits stated above, ESG enables leaders to lower their risk profiles. “There is a range of maturity when it comes to ESG. Companies need to move away from seeing ESG as a reporting and data gathering exercise, to extracting value from it. The ESG components can add value and make a company risk resilient,” emphasized Robin.

ESG is specific to a mine site and cannot be generalized across multiple mine sites. According to Claire, “Not all ESG risks are created equal.” Technology is critical if companies want to tell their ESG story better.

For the industry to really leverage the benefits of ESG; technology, policies, procedures and education need to be employed. Robin says, “There has to be policies and procedures, support from the executive level, the right budgets and awareness training programs for all staff for this concept to be impactful.”

There is an opportunity to change the narrative from the mining industry being the “big bad wolf” that just takes from the environment and society but never gives back. “ESG is a great enabler to show the world the good we can do,” Robin explained.

ESG calls attention to a reevaluation of organizational risk management processes. “There are a lot of physical and transitional risks. What are we exposed to? How should we manage or address those risks? We need to sell our story better and ESG is a great opportunity to do that,” described Robin.

Conclusion

Understanding ESG is, in essence, understanding integrated risk management. There are certainly elements of the ESG story that the industry is improving on. Leaders should embrace ESG, not see it as a disruptor for the concept to be worthwhile. A collective ownership of good ESG management is what the industry requires. Practical steps should be taken to meet this requirement. “Define ESG, get the industry and organizational experts working on this to find for ourselves what good ESG looks like. Then give the world something tangible to measure us against,” concluded Deshnee.

Find out how IsoMetrix can help mining companies implement an integrated risk management solution

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