The Environmental, Social and Governance (ESG) factor has become an influential issue in the finance market, which has intensely promoted the principle of sustainable development. Environmental issues have become serious business topics of late and are getting mainstream attention as they affect share price performance. After all, several market participants have also been very proactive in promoting these factors among investors.
Over the past few years, numerous studies have been conducted into ESG in the mining industry, but there is still plenty of information out there that is difficult to acquire.
Today, many national and international regulations are in place to ensure environmental protection and employee rights and prevent conflict minerals from entering the market.
For this reason, major mining companies have already implemented comprehensive sustainability programs. These programs provide clear planning with respect to how the companies will deal with the often overlapping issues of social responsibility, human rights, and environmental protection.
The principle of sustainability is already well-established in the mining industry, but, unfortunately, cannot yet be found in many other industries. This is why you should care about ESG in the mining industry:
ESG Matters to Investors, Customers, & Lenders
The demand for ESG-compliant investment has grown, and in turn, its availability has increased. ESG-based investment is becoming a positive trend for long-term investing as we move toward a low-carbon economy.
Today, very few transactions are done in the absence of an ESG review. Responsible investment and buying are realities. Investors, lenders, and customers want to know that companies take ESG issues into account.
ESG Are Also Being Watched By Governments, NGOs, Regulators, & Communities
A holistic view of the company and its role in the community is increasingly important. It is not only the investors and customers who want to see clear statements of how a company manages its value chain but also governments, NGOs, regulators, and communities.
They are all using ESG factors when making public policy decisions. In the case of publicly listed companies, ESG factors will be increasingly used to measure the sustainability of corporate behaviour, and could affect the share price in the long run.
There Are Many Benefits When You Have a Strong ESG Performance
It is certainly important for companies to be able to prove that they have a clear vision of the future and their role in shaping it. Companies that have a strong ESG performance have the opportunity to illustrate this fact. A strong ESG performance is also a way to set oneself apart from the competition.
Communities, investors and customers alike want to see a clear plan for who the company is and how it will contribute to society.
In the long run, it is a good idea to strive for sustainability as an integral part of the business plan. Companies that begin to see sustainability requirements as a competitive advantage rather than an additional cost are the winners.
The Bottom Line
The mining industry is no stranger to ESG. Mining companies have often been pioneers on this path, especially the more established ones. While the demand for ESG is vitally important, it is also a trend that has favourable effects on the share price performance. This trend is likely to remain in the foreseeable future.
Newfoundland Gold is an alliance of companies focused on the advancement of mineral exploration and mining projects. We can help you with ESG gold mining. Get started now.