The conference opened on Feb. 27 with a keynote panel discussion on embracing ESG, moderated by Kim Morrison, senior director of global tailings management, technical services at Newmont, and Kelly Ward, vice president of mining, metals and minerals and the U.S. practice leader at risk advisory firm Marsh.

The panellists – Ryan Bond, head of climate and sustainability insurance initiative at Marsh, Aidan Davy, chief operating officer at the International Council on Mining and Metals (ICMM) and Casey Nault, senior vice-president, general counsel and chief ESG officer at Coeur Mining – discussed ESG trends in the mining industry as well as its critical role in risk management and long-term value creation.

There has been a rise in anti-ESG sentiment in the United States. In 2021, Texas became the first U.S. state to pass anti-ESG legislation, and there are several other states proposing or adopting regulations or legislation to restrict ESG activities. However, the panellists emphasized the importance of the long-term outlook.

“Political cycles are extraordinarily short, in the grand scheme,” said Davy. “In terms of the ESG agenda, irrespective of what is going on in any jurisdiction, companies have to take a long-term view.”

However, Nault pointed out that there can be other factors limiting long-term ESG planning, such as life-of-mine. For example, Coeur Mining’s Kensington underground gold mine in Alaska runs on diesel generators. “We would love to have a clean energy solution for that mine,” he said. “We’re actively engaged on the government relations side to try to secure either federal or state funding to help run a power line up to the operation. We have a long track record of replacing depletion, and we’ve operated on the three- to five-year mine life for 13 to 18 years. When you’re talking about a mine life as short as that, it certainly constrains capital allocation decisions.”

Mining companies are also being measured against new standards and frameworks that have been introduced in recent years. Ward noted that biodiversity and natural capital – natural resources that are vital to life, but are not necessarily presented as having economic value – are quickly emerging as key areas for mining investors, insurance carriers and other stakeholders, and highlighted the United Nations Conference of the Parties for biodiversity (COP15) that was held in Montreal in December 2022. She also pointed to the taskforce on nature-related financial disclosures (TNFD) that was introduced in June 2021 to address biodiversity and natural capital by providing a framework for how organizations can report and act on evolving nature-related risks, with the ultimate aim of channelling capital flows into positive action.

According to Davy, ICMM has been on a long journey regarding biodiversity, dating back to its first position statement in 2003, when its members committed not to explore nor mine on world heritage properties. In 2020, it updated its mining principles to include a commitment to the conservation of biodiversity and integrated approaches to land-use planning.

“The tragedy of biodiversity loss is that, while there is some prospect for arresting or mitigating climate change effects in the longer run, once biodiversity is lost it’s lost in perpetuity,” he said. “We have re-prioritized biodiversity in ICMM’s current strategy cycle, which runs from 2022 to 2024. As part of that, we’re looking again to see if that membership commitment is fit for purpose, or if there is more we may need to do.”

Nault told the panel that Coeur Mining is currently developing its own company biodiversity standard. “We’re hearing from stakeholders that we need to address this set of issues holistically,” he said. “This means that we take biodiversity and minimizing impacts into account in mine design, through our concurrent reclamation processes, and also for wildlife protection.”

Coeur Mining was the first mining company to use Nevada’s conservation credit system to protect sage-grouse habitats, buying credits to mitigate and offset environmental impacts related mining operations at its Rochester mine. “It was a positive from a community relations perspective as well, because we bought those credits from a local ranch, so it’s creating more economic benefit for the community at the same time as protecting biodiversity,” he said.

Regarding tailings management, Morrison said that the investment community is seen as a key driver for change, pointing out that the Principles for Responsible Investment was a co-convenor of the Global Industry Standard on Tailings Management (GISTM) alongside the United Nations Environment Programme and ICMM, as well as of the new independent Global Tailings Management Institute that was announced in January.

Related: Four-step framework for mines to ensure conformance to the Global Industry Standard for Tailings Management

Davy agreed that the work that led to the development of the GISTM is a great example of the investment and technical communities working together to develop something of enduring value.

However, he wondered whether investors should be the main drivers behind ESG initiatives. “I think it’s entirely legitimate, indeed it’s logical, that investors can be part of catalyzing these kinds of initiatives,” he said. “But whether the investment community has the legitimacy to take the lead and effectively manage those kinds of processes – I think the jury’s still out.”

The GISTM contains a clause that requires operators to have adequate financial capacity, including insurance, for their tailings facilities. Despite the fact that every tailings failure impacts the entire mining industry and its reputation, Ward noted rumours that some junior mining companies are not insuring their tailings due to the high premiums or their inability to meet the documentation requirements that insurers now require.

“The insurance gap is something that insurance brokers and underwriters are continually trying to fix,” said Bond. “The challenge is that those that need insurance the most are generally the ones that are sadly excluded, and that applies globally. I think the guidelines and standards are excellent, and they create some comfort between the risk bearer and the risk taker around what is expected.”

Davy added: “As the [GISTM] becomes increasingly normative with investors, whether individual companies choose to insure or not becomes moot, because investors will require them to have those provisions in place.”