Australia’s new draft JORC Code is about to come into public view and, based on industry and media commentary to date, it will confirm the convergence of environment, social and governance (ESG) and mineral resource and reserve reporting that underpins mining company asset valuations.
Leigh Slomp, Chief Advisor professional standards at the AusIMM, told a recent institute conference in Perth, Western Australia, this was a worldwide trend.
The International Council on Mining and Metals (ICMM)-sponsored Committee for Mineral Reserves International Reporting Standards (CRIRSCO) was seeking “better global alignment” of mineral reporting codes, including incorporation of ESG-related modifying factors, across the world’s major resource and financial centres in North America, Australia, Europe and South Africa.
Changes in the draft JORC Code were not aimed at “inventing any new reporting systems”, Slomp said.
“It’s about making sure that there’s transparency within the JORC code and reporting under the JORC code around material issues related to ESG,” he said.
“The consideration of ESG across the lifecycle of a deposit is important.”
At the AusIMM Mineral Resource Estimation Conference held earlier this year in Perth, a technical paper, ESG Considerations in Public Mineral Reporting, was presented by Fiona Cessford of SRK Consulting and co-authored by Australia’s K2fly along with other companies and independent consultants. It was reiterated in the presentation that securities exchanges around the world were making it clear that companies could not afford to omit ESG risks from investor reporting.
The presented technical paper addresses and expands on the 20 core principles for improving ESG transparency in public minerals reporting.
“ESG issues have become a defining feature in the marketplace to differentiate preferred [mining] investments,” the technical paper says.
SRK Consulting’s Fiona Cessford, who delivered the paper, said most companies had strategies encompassing ESG visions and missions, but not all had gone on to ensure underlying elements were “wired to mineral reporting” in a meaningful and understandable way.
“For example, incorporating ESG elements in company capital investment frameworks will enable a culture of excellence based on leading-practice asset and mineral property management,” she said.
“This equates to a better-informed investment decision, minimising and controlling the business risk and maximising return.
“If this can be addressed it should, in time, bring new investors into the market, particularly for those companies with strong, sustainable track records and transparent reporting.”
Cessford said an explosion of ESG disclosure and performance standards, and the emergence of new schemes for validation of performance, was increasing pressure on education, upskilling and accreditation of both ESG experts, in relation to mineral resource and reserve reporting, and competent persons in ESG matters.
A new K2fly whitepaper summarises the technical paper and explains why a “Golden Thread” linking mineral reporting and ESG is vital to competent persons (CPs).
“Competent persons must not only be aware of the Golden Thread running through their organisation, they must also play an active role in development of business strategy, plans and of course public reports,” the whitepaper says.
“This will ensure the public mineral reports have integrity.”
The whitepaper says maintaining the Golden Thread through all phases of mine planning cycles is vital to avoid disconnects between critical resourcing, scheduling and funding needed to deliver ESG outcomes promised to stakeholders.
“Public mineral reporting cannot be effective if ESG is not integrated into the strategy, business model, input assumptions and processes that defines and drives robust public reporting,” it says.
K2fly CEO Nic Pollock says the Golden Thread is a critical reporting nexus that will underpin levels of trust between mining companies and their stakeholders in the years ahead.
“We see and hear regularly now in mining forums and the media about an increasingly complex and changing regulatory and community expectation landscape confronting the industry,” Pollock says.
“With more mining and alternative energy projects needed to support the world’s energy transition, communities and investors will need to trust that the projects can be delivered in a sustainable and ethical way, with high levels of transparency and disclosure.”
K2fly’s enterprise-level resource governance solutions drive towards “net positive impact” ESG compliance, disclosure and technical assurance. Spanning all continents, K2fly’s customer base includes multinational Tier-1 and Tier-2 mining clients operating in 62 countries, across more than 850 sites globally.
Pollock says a modern systems approach to resource governance, combining mineral and ESG information, provides not only reporting and governance capability but also has the potential to predict and prevent ESG incidents.
“Publicly listed companies can face reputational damages, loss of company value and impact to their social licence to operate by failing to report against requirements,” he says.
“Our solution creates stronger resource governance, traceability to the sourced data, and greater efficiency in the annual reporting process.”
For a copy of the K2fly whitepaper, The Golden Thread, click here.
Heath Arvidson, K2fly’s Chief Geoscientist, has also taken some time to break down the technical paper and what it means for the industry. To listen to the podcast, click here.