PDAC: Embracing ESG can offer greater access to lower-cost capital, says Sprott’s Daniella Dimitrov

Mineral exploration and mining companies that incorporate environmental, social, and governance (ESG) principles as “true value drivers” as part of their corporate culture will outperform and have greater access to more long-term capital and at lower costs, says Sprott Capital’s Daniella Dimitrov.

The principles of ESG are not new to the mining industry, Dimitrov told the virtual audience at this year’s PDAC. “For many years, the industry has been focused on doing the right thing to obtain and maintain our social license to operate.”

While acknowledging the significant benefits that mining has brought to the communities in which they operate, including job creation and maintaining the environment, the S&P Global Ratings, she said, ranks the metals and mining industry at the bottom (along with the oil and gas industry) for its combined environmental and social risks score. 

The increased frequency of more catastrophic climate events, the Covid-19 pandemic and its impacts, and the increasing social focus on diversity and inclusion means that ESG has grown and will continue to grow in importance, Dimitrov said. “Not just for stakeholders such as the communities around mining operations but also for governments, regulators, and investors.”

Dimitrov then moved onto the changing stakeholder environment driving ESG in response to the increased demand for ESG disclosure. “Regulators around the world are taking note.”

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