‘Pressure on ESG measurement intensifying’, IMARC hears

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IGO chair, Michael Nossal (left) and Newcrest's Tzila Katzel speak at IMARC 2022

Rising ESG risks and transparency pressures were, not surprisingly, key themes at this year’s IMARC event in Australia, with the urgency around framing credible reporting metrics continuing to rise, according to IGO chairman Michael Nossal.

“The pressure on measurement is only just starting and it’s going to get much more intense,” he said at the forum in Sydney, New South Wales.

“Certainly what I’m hearing from investors is, no more nice stories in your sustainability report, thanks. What we want are hard targets, where you are [positioned against] the targets, and when you’re going to get to the targets you’ve set for yourself.

“Measurement is really key.”

A challenge with measurement and credible reporting is of course finding common ground, and language, to ensure appropriate standards and guidelines underpin the targets being set by companies. Group manager sustainability and social performance at gold major Newcrest Mining, Tzila Katzel said at the conference that task – for the moment at least – wasn’t getting any simpler.

“I was at an ICMM [International Council on Mining and Metals] meeting last week and in one of the sessions somebody put out a slide with all the voluntary and mandatory disclosures required around climate,” she said.

“It was astronomical … how much was there, how much was duplicative. And yet if you’re an international company you have to kind of tick the box on all of these things. [Different boxes for the] US, the EU, TCFD [Task Force on Climate-related Financial Disclosures], GRI [Global Reporting Initiative], etc. I think it was really a great visual to really show us how these standards are not always talking to each other [and] are duplicative.

“The sooner we can get some kind of cohesion … which I know the ICMM is trying to do, the better for the industry.

“Standards definitely have a role to play. I think where there is difficulty is when it overtakes action. What you actually want a standard to do is drive positive action. When you have duplicates of standards or you have standards … that don’t necessarily talk to each other, you create constraints; you don’t actually create progress.

“I think we just need to be very careful about making sure these things work towards the absolute purpose of our organisations, which is to progress action on the ground. But what I fear about some of these standards is that we spend all our time trying to meet them, and disclose against standards, and only a small amount of our time actually effecting change within the organisation.”

Katzel suggested the industry was “struggling” with the lack of certainty around decarbonisation reporting standards and rules at present, “but we’ve got some [more] big headwinds coming our way”.

“You’ve got all the disclosures around nature, [there are] things coming specifically in the water area … [and] around human rights disclosure. There’s a lot of conversation around that at the moment.

“Technical measuring is a whole other Pandora’s box because there are some things that are really easy to measure and some things that will be difficult to measure.

“And how we then use those metrics to tell the story of a business becomes a whole other story, too.

“[But] once we understand what the strategy is, once we understand how we’re going to measure performance, what are the pieces that are critical for us, what is the purpose of our business, then [we can] have the stakeholder conversation, to make sure that we’re considering the value that our external stakeholders and internal stakeholders [put on ESG elements].”

 

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