ESG remains the number one risk and opportunity
While evidence has shown that mining and metals companies are integrating ESG factors into corporate strategies, decision-making and reporting, survey respondents continue to rank ESG issues as the number one risk to their business. business, closely followed by climate change in third place. Respondents cite water management (76%), decarbonization (55%) and green production (35%) as the top issues they believe will be most scrutinized by investors.
“Net zero is always a priority, but mining and metals companies are also mitigating broader physical and transition risks,” Yameogo shares. “Companies must play a role in enabling a just transition – achieving decarbonization goals while considering the long-term impact of mine closures on workers and communities.”
Global uncertainty is mounting the pressure
Respondents rank geopolitics second among business risks, up from fourth last year. Seventy-two percent identify resource nationalism as the top geopolitical factor likely to impact their operations as governments seek to close income gaps after spending throughout the pandemic and capitalize on the upside commodity prices through new or increased mining royalties.
“Global uncertainty is pushing companies to quickly assess the impact of different alliances, trade flows, governments and taxes on business decisions,” Yameogo says. “It also forces companies to define the points of intersection. As the interaction between ESG and geopolitics increases, so does the amount of regulation needed to comply. This changing landscape requires mining and metals companies to pay close attention to how tax and regulatory changes in jurisdictions will impact operations.
Supply chain disruption appears on the radar
Various external and societal factors such as the impact of COVID-19, the war in Ukraine and rising energy prices have amplified the challenges that have been looming for some time. In response, respondents say they are looking to improve end-to-end supply chain visibility, leverage technology to improve operations and performance, and be more strategic when analyzing new technologies and supplier portfolios.
“Major disruption and rapidly changing expectations together can impact the ability of mining and metals companies to create sustainable value,” adds Yameogo. “Mitigation of risk and maximization of opportunity requires companies to make significant changes to their businesses through a proactive and diverse approach integrated with strategy and broader planning.”
Read the report to learn more about the main risks and opportunities for mining and metals companies.