Our team at YellowYellow attended the recent PDAC Conference (Prospectors & Developers Association of Canada) in Toronto where ESG was at the forefront of discussions. Thanks to everyone who shared a coffee with us or spoke candidly about their first-hand experiences. We generated terrific and meaningful connections and are looking forward to continuing the conversation in the coming weeks and months.
PDAC Top Four Takeaways
YellowYellow’s PDAC experience was fruitful. We learned an abundance from networking, talks, and the overall conference. We thought best to share our insights across YellowYellow internally, and with our community externally in a blog post.
The conference brought together mining leaders and experts to address the question “Is ESG outdated?”
Here are our top four (4) takeaways:
1. Changes in Mining Regulation and Permitting
In the past 40 years, regulation and permitting have shifted from federal to local levels. This reversal gives smaller companies more power and helps them compete with larger firms. Companies are also focusing on compliance, designing mines with refurbishment in mind and knowing what it will be turned into after it closes in 20+ years.
To say that ESG and Sustainability were hot topics at PDAC would be an understatement. ESG was everywhere. Keynotes, sessions, and surrounding events addressed environmental, social and governance issues impacting mining companies and investors. Topics ranged from impacts on Indigenous communities to sector ratings. Notably, Miller Thomson hosted an ESG & Mining breakfast, and Dentons ran an ESG & Mining breakout session. YellowYellow team members were on-site learning and discussing these real changes and impacts for the mining industry for our present and future mining clients.
We also took a pulse. How does the mining sector feel about ESG? We found that PDAC attendees know they must pay attention to ESG. Generally speaking, those who we spoke to find ESG important, but they are uncertain and frustrated with how to comply. For example, applying for and permitting a mine is a long and winding process, made “worse” by sustainability politics and regulations locally and nationally in all parts of the world. Transparency is needed. It is clear that while sustainability progress can be a complicated journey in the mining sector, the drive to be more sustainable is stronger than ever, and YellowYellow is here to help make this transition smoother.
2. ESG Has Become a Business Imperative
Data shows that companies pushing for ESG have not experienced negative share prices, and public opinion is strong on greener technologies. This rings true in the mining sector. Shareholders are less likely to invest unless companies have laid out an ESG framework in recent years. Commonly, mining companies examine economic benefits, protecting health and safety, Indigenous land rights, human rights, and the environment when looking towards new projects and potential mining locations.
We collected further “feet on the streets” intel. Why is the mining sector pushing for ESG policies and programs? It comes down to increasing profitability and reducing risk. Anecdotally, several mining companies told us that, “We need an ESG policy to win new bids for business.” ESG commitments must be tight and transparent. Sustainability plans and reports are commonly the job of a generalist project leader. These plans and commitments live on a mining company’s website, and as part of their pitch to investors and lenders.
The case is clear for sustainability. But, what to disclose and track? Knowing which ESG and sustainability metrics and frameworks to use is muddy. We heard, “Our investors want us to have ESG KPIs, so we came up with a list (from thin air) and agreed on them together. Now we track our performance on these KPIs.” The mining sector will greatly benefit from using a universal standard or framework to increase transparency, improve decisions-usefulness of the data, and encourage comparability across mines. For example, the International Sustainability Standards Board (ISSB) is producing a global baseline for sustainability disclosure. Its goal is to eliminate the fragmented nature of sustainability data and context today. This will make clear what data is financially material for the benefit of all.
3. Automation of Sustainability Data
With the surge of pressure to create sustainability goals and measure progress, companies that can pull disparate data together are in a great spot to grow their user base. Data required for a sustainability report is both structured and unstructured in nature. Some data lives in PDFs, in accounting and ERP systems, and others are anecdotal evidence in emails. Multiple departments are called upon for their input when compiling a full sustainability report. HR, Marketing, Finance, Risk, Communications, Engineering, and other departments all must provide their input to properly disclose a firm’s environmental, social and governance impacts and practices.
Financial reporting has long been automated. Sustainability reporting – which is arguably more complex – is finally now receiving the same treatment. Software platforms integrating, reviewing, and communicating this data will serve as a game-changer for reporting companies. We also learned about the need for IoT (Internet of Things) sensors within the mining operations. Having real-time data, which connects to sustainability platforms, can expose efficiencies. Even Artificial Intelligence (AI) plays an important role. Based on targets and norms, AI within this sustainability technology can eliminate lower value work – paving the way for more strategic business planning.
4. Next Generation's View on ESG and Mining
The next generation is more aware and educated on ESG than the mining industry. ESG should be more regulated than voluntary. Everyone benefits from a holistic view of ESG. At PDAC and beyond, YellowYellow saw a significant push towards sustainable mining practices (remediation efforts, mine repurposing, meeting GHG targets, etc). Mining companies need to recognize that it’s not just about profit, but the right choice to make.
The decision to open a mine in a community should not be taken lightly. We heard it first hand in a session at PDAC. “Opening a mine is a 20+ year relationship with that environment, and that community.” The mines, their investors, and surrounding businesses that will be around in 5-10 years will be those that see mining and ESG working together. Profits come from being “good.” This message is an important one as YellowYellow left the conference and got back to our important work.
Next Steps: How Can We Help
Overall, PDAC 2023 brought the conversation on ESG practices to the forefront of the mining industry, and YellowYellow is excited to be a part of that conversation.
YellowYellow is a boutique ESG consulting firm. We have 8 team members, all with expert knowledge across sustainability, ESG, mining, geology, carbon capture, CAPEX and OPEX, technology, and beyond. Our Principal, Lisa Annabel Ellis, is a member of Artemis Project and we have proudly worked on several Canadian mining projects over our 3 year tenure.
