Last week, SOOP Strategies’ Sabrina Dias and Avi Inbar headed to Colorado Springs to deliver their Keynote Presentation at the 35th Gold Forum Americas. The Denver Gold Group (that hosts the Forums) commissioned SOOP to undertake an ESG Needs Assessment to identify key areas that would benefit from a focus on ESG. Sabrina provided an overview of the results to the participants at the Forum.
ESG/sustainability is now mainstream
If you’re a company in the extractives sector, you likely realize by now that ESG/sustainability is no longer a “nice-to-have” tool in your toolbelt. Instead, it has become vital for your company’s long-term sustainability and profitability. As Sabrina often says, sustainable development is a nebulous territory, and navigating it can be complex and overwhelming if you don’t have a solid understanding of the many components contained within it.
What exactly is an ESG Assessment, and is it different from an ESG Needs Assessment?
Yes, these are two different evaluations. To get a better understanding, we’ll start with the beginning of the process – an assessment to see where your company stands regarding its involvement with ESG.
An ESG Assessment
An ESG Assessment, also referred to as the “Current State”, is a first step in broadly evaluating how your company is measuring up in the three categories of Environmental, Social, and Governance. By understanding your current ESG footprint, you can then identify areas of potential financial, reputational or regulatory risk.
There is a benefit in doing this and thereby establishing your commitment to ESG. You are enhancing your company’s reputation amongst stakeholders, including investors and local communities. Investors take ESG into account now as one of the factors when deciding whether to invest in a company – or not.
An ESG Needs Assessment
An ESG Needs Assessment is about identifying gaps and potential areas for improvement in your ESG approach when looking at the industry and the global picture. This specialized assessment pinpoints areas for improvement and identifies specific actions you can take to achieve them.
This approach is beneficial as it tailors the actions specifically to your company’s unique needs, enabling you to meet the standards required but also to make meaningful change in line with your specific vision for the company. Being a leader in specific areas important to you allows you to stand out and gives you a competitive edge.
An ESG Materiality Assessment
There is also another type of assessment, that being an ESG Materiality Assessment. This focuses on areas of material value to your stakeholders that will have the most impact on your business. An output of this is determining what goals to set and focusing on those as a priority.
It allows you to evaluate where you want to concentrate your preliminary efforts so they deliver maximum benefit to you as a company. So, instead of applying your efforts across all areas of ESG, you know where to allocate your time and resources for maximum benefit.
This type of assessment ensures you’re aligning your ESG strategy with your business goals, stakeholder expectations and sector-specific challenges.
Why integrate an ESG Assessment into your planning from the start?
Given the potential impact on the environment and communities affected by mine sites, the extractives sector can particularly benefit from incorporating ESG into their planning right from the preliminary stages of a project.
Economic benefits
As outlined in Sabrina Dias’ book, Integrating Sustainability Into Major Projects, doing so not only provides positive impacts on environmental, social, and governance factors but also economically for the company. Projects that incorporate ESG right from the start are more likely to enjoy cost savings through more efficient operations, less disruption from local communities, and greater profits as a result. Which then leads to increased investor interest.
Permitting benefits
Good ESG practices can often make the permitting process easier with less pushback from government authorities who may otherwise be reluctant to issue approvals to companies making profit from their lands.
Better prepared for future challenges
We’re experiencing a rapidly changing world, especially with climate change and the global challenges it represents environmentally and socially. A proactive stance towards ESG positions a company to better handle whatever challenges may lie ahead.
ESG and future-proofing your business
Think of ESG as future-proofing your business. By undertaking the ESG Assessments outlined above, you’re not only identifying areas where you can mitigate risks, but also proactively finding areas of opportunity to forge ahead as leaders in the industry in an ever-evolving global landscape.
Incorporate ESG into your business model and you’ll not only be embracing sustainability, but also taking concrete steps to thrive in a rapidly changing business world.
SOOP Strategies Inc. specializes in providing sustainability services to the extractives sector. If you would like to find out more about how we can help you with an ESG Assessment, ESG Needs Assessment, or an ESG Materiality Assessment, please contact us at info@soopstrategies.com or at (416) 669-8436.