SlideShare a Scribd company logo
May 2018
Petra Daroczi
Thomson Reuters
ESG myth: the mining sector will be
last to embrace ESG.
IN OTHER WORDS, INVESTORS IN MINING COMPANIES ARE MUCH LESS
AFFECTED BY ESG CONSIDERATIONS THAN INVESTORS IN OTHER
SECTORS.
Have you heard of a company called Rio Tinto? Surely. Have you heard of a company called Alcoa? Maybe not. And have you
heard of a company called Apple? I bet you have. How do these three distinct companies come together in the ESG space?
In case you have missed, Reuters breaking news came out on 11
th
May that Rio and Alcoa will launch a joint venture called
“Elysis” to develop and commercialise the world’s first carbon-free aluminum smelting process. If you are no miner like me you
probably didn’t know that 1) aluminum smelting (the process of burning alumina) releases large quantities of greenhouse gas, 2)
aluminum is one of the most important raw material inputs into the fabrication of consumer electronics (amongst other goods).
A quick search using the “Search & Discover” app, which uses artificial intelligence to look for keywords/terms across content
(news, broker research, filings, and transcripts) in just a few seconds, sheds light on the fact that the JV is backed by Apple who
will invest USD 10m. We learn that Apple has been quite resolute to reduce it carbon footprint across the board: only last month
it announced the move to 100% clean energy at its facilities.
So far, so good. Alcoa is partnering with one of the largest mining companies in the world, it is developing a groundbreaking,
environmentally-sustainable process to produce one of the most widely-used metal raw materials, and it has potentially already
secured a large customer who will be incorporating its final produce in its supply chain.
What about its ESG factors? Is Alcoa really living up to its “sustainability” leadership?
ESG MYTHS THOMSON REUTERS
While Thomson Reuters-sourced ESG data on Alcoa is only available from 2016, there is a lot of useful information in this raw
data.
We learn that Alcoa is quite ambitious in the “E” (environmental”) sphere: it has already set specific objectives for resource
reduction, for water and energy efficiency; it is setting an example amongst its peers by generating more than 30% of its total
energy from renewable energy sources; and it has engaged in a number of ‘environmental partnerships’, such as NGOs,
industry organizations, governmental organizations, etc. to improve environmental issues.
An interesting clue to how the company is thinking about ESG and sustainability relates to the metric “Climate change
commercial risks: Is the company aware that climate change can represent commercial risks abd/or opportunities?”: As the
below screenshot indicates, this is mentioned a number of times in its Sustainability Report. The exact source, paragraph, page
number are all indicated to give analysts a peace of mind as to the reliability of the data.
Another interesting find in terms of the “S” (social) relates to injuries, which is quite an important aspect of basic materials
(mining, chemicals, packaging, etc.) companies. The ESG Peer view tool, a visual dashboard enabling the comparison of
sectors/geographies/metrics, helps us understand where Alcoa stands in terms of the Total number of injuries to million hours
(Injuries and fatalities including no-lost-time injuries relative to one million hours worked): out of 76 companies in the basic
materials sector, it ranks number 8 with 10.66 injuries. There is clearly some improvement to make in its safety & work accident
procedures.
ESG MYTHS THOMSON REUTERS
If we were to draw a quick conclusion, we could say that 1) ESG is indeed extremely relevant to the mining sector, 2) ESG and
sustainability issues should indeed be incorporated into the investment analysis and decision-making process since these have
important implications on the long-term performance of the company (think of Alcoa’s sustainable aluminum-making process
and Apple as a long-term customer), 3) mining through (literally) ESG data for a company can reveal a lot of additional insights
as to how the company operates and thinks of its future strategy.

More Related Content

What's hot

Sustainability
SustainabilitySustainability
Sustainability
Sterlite Power
 
Epa co2 emissions
Epa co2 emissionsEpa co2 emissions
Epa co2 emissions
Switch Energy
 
NL Trade Mission Boston CleanTech 2020
NL Trade Mission Boston CleanTech 2020NL Trade Mission Boston CleanTech 2020
NL Trade Mission Boston CleanTech 2020
JudithvanVoorstVader
 
Clean Energy Investment Specifics: Battery Production
Clean Energy Investment Specifics: Battery ProductionClean Energy Investment Specifics: Battery Production
Clean Energy Investment Specifics: Battery Production
InvestingTips
 
Smart expo slideshare v001
Smart expo slideshare v001Smart expo slideshare v001
Smart expo slideshare v001
2degrees Network
 
Whats up with Oil| World | February 2019
Whats up with Oil| World |   February 2019Whats up with Oil| World |   February 2019
Whats up with Oil| World | February 2019
paul young cpa, cga
 
EPS expertise
EPS  expertiseEPS  expertise
Sustainability transmission
Sustainability transmissionSustainability transmission
Sustainability transmission
Sterlite Power
 
[Economics for Managers] Natural Monopoly
[Economics for Managers] Natural Monopoly[Economics for Managers] Natural Monopoly
[Economics for Managers] Natural Monopoly
Andy Woojin Kim
 
Solar yp
Solar ypSolar yp
Solar yp
solaryp
 
The Role of Business Extends Beyond Profit
The Role of Business Extends Beyond ProfitThe Role of Business Extends Beyond Profit
The Role of Business Extends Beyond Profit
Renoir Consulting
 
Energy Management with Fiber Networks
Energy Management with Fiber NetworksEnergy Management with Fiber Networks
Energy Management with Fiber Networks
BroadbandProperties
 

What's hot (12)

Sustainability
SustainabilitySustainability
Sustainability
 
Epa co2 emissions
Epa co2 emissionsEpa co2 emissions
Epa co2 emissions
 
NL Trade Mission Boston CleanTech 2020
NL Trade Mission Boston CleanTech 2020NL Trade Mission Boston CleanTech 2020
NL Trade Mission Boston CleanTech 2020
 
Clean Energy Investment Specifics: Battery Production
Clean Energy Investment Specifics: Battery ProductionClean Energy Investment Specifics: Battery Production
Clean Energy Investment Specifics: Battery Production
 
Smart expo slideshare v001
Smart expo slideshare v001Smart expo slideshare v001
Smart expo slideshare v001
 
Whats up with Oil| World | February 2019
Whats up with Oil| World |   February 2019Whats up with Oil| World |   February 2019
Whats up with Oil| World | February 2019
 
EPS expertise
EPS  expertiseEPS  expertise
EPS expertise
 
Sustainability transmission
Sustainability transmissionSustainability transmission
Sustainability transmission
 
[Economics for Managers] Natural Monopoly
[Economics for Managers] Natural Monopoly[Economics for Managers] Natural Monopoly
[Economics for Managers] Natural Monopoly
 
Solar yp
Solar ypSolar yp
Solar yp
 
The Role of Business Extends Beyond Profit
The Role of Business Extends Beyond ProfitThe Role of Business Extends Beyond Profit
The Role of Business Extends Beyond Profit
 
Energy Management with Fiber Networks
Energy Management with Fiber NetworksEnergy Management with Fiber Networks
Energy Management with Fiber Networks
 

Similar to Esg myth mining companies will be last to embrace esg may2018

This final paper should be between 8 to 10 pages for the content, no.docx
This final paper should be between 8 to 10 pages for the content, no.docxThis final paper should be between 8 to 10 pages for the content, no.docx
This final paper should be between 8 to 10 pages for the content, no.docx
abhi353063
 
Guerin 2020-perceptions-of-supplier-impacts
Guerin 2020-perceptions-of-supplier-impactsGuerin 2020-perceptions-of-supplier-impacts
Guerin 2020-perceptions-of-supplier-impacts
Turlough Guerin GAICD FGIA
 
WM-doubles
WM-doublesWM-doubles
WM-doubles
David Kells
 
Climate Change: Current Policy Landscape and Implications for U.S. Industry
Climate Change: Current Policy Landscape and Implications for U.S. IndustryClimate Change: Current Policy Landscape and Implications for U.S. Industry
Climate Change: Current Policy Landscape and Implications for U.S. Industry
edf_innovex
 
Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...
Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...
Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...
Stephan Bogner
 
INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...
INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...
INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...
ijitcs
 
Corporate action 1
Corporate action 1Corporate action 1
Corporate action 1
Henri Kuogopa
 
Competition Monitor issue 3 january 2018
Competition Monitor issue 3 january 2018Competition Monitor issue 3 january 2018
Competition Monitor issue 3 january 2018
Eric Wigart
 
Directions 10
Directions 10Directions 10
Directions 10
salterbaxter
 
AcuComm's Competition Monitor | SAMPLE
AcuComm's Competition Monitor | SAMPLEAcuComm's Competition Monitor | SAMPLE
AcuComm's Competition Monitor | SAMPLE
AcuComm
 
This topic dbtopic-889
This topic dbtopic-889This topic dbtopic-889
This topic dbtopic-889
Sat Án
 
Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...
Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...
Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...
Objective Capital Conferences
 
How Artificial Intelligence Can Power Climate Change Strategy
How Artificial Intelligence Can Power Climate Change StrategyHow Artificial Intelligence Can Power Climate Change Strategy
How Artificial Intelligence Can Power Climate Change Strategy
Bernard Marr
 
Corporate Social Responsibility review n.2 (August2015)
Corporate Social Responsibility review n.2 (August2015)Corporate Social Responsibility review n.2 (August2015)
Corporate Social Responsibility review n.2 (August2015)
Snam
 
09-089 May 18, 2009 This case was prepared by Reb.docx
09-089  May 18, 2009 This case was prepared by Reb.docx09-089  May 18, 2009 This case was prepared by Reb.docx
09-089 May 18, 2009 This case was prepared by Reb.docx
tarifarmarie
 
Safety Mining Advertising
Safety Mining AdvertisingSafety Mining Advertising
Safety Mining Advertising
Australian Mine Safety Journal
 
EU Horizon 2020 Funded Project SCRREEN Publishes Final Output Report
EU Horizon 2020 Funded Project SCRREEN Publishes Final Output ReportEU Horizon 2020 Funded Project SCRREEN Publishes Final Output Report
EU Horizon 2020 Funded Project SCRREEN Publishes Final Output Report
KTN
 
Technology Strategy Report - Case UPM Biofuels
Technology Strategy Report - Case UPM BiofuelsTechnology Strategy Report - Case UPM Biofuels
Technology Strategy Report - Case UPM Biofuels
Saad Jamil
 
Rare Earth Elements Markets Worldwide
Rare Earth Elements Markets WorldwideRare Earth Elements Markets Worldwide
Rare Earth Elements Markets Worldwide
MarketResearch.com
 
TACC615 Professional Accounting Capstone.docx
TACC615 Professional Accounting Capstone.docxTACC615 Professional Accounting Capstone.docx
TACC615 Professional Accounting Capstone.docx
4934bk
 

Similar to Esg myth mining companies will be last to embrace esg may2018 (20)

This final paper should be between 8 to 10 pages for the content, no.docx
This final paper should be between 8 to 10 pages for the content, no.docxThis final paper should be between 8 to 10 pages for the content, no.docx
This final paper should be between 8 to 10 pages for the content, no.docx
 
Guerin 2020-perceptions-of-supplier-impacts
Guerin 2020-perceptions-of-supplier-impactsGuerin 2020-perceptions-of-supplier-impacts
Guerin 2020-perceptions-of-supplier-impacts
 
WM-doubles
WM-doublesWM-doubles
WM-doubles
 
Climate Change: Current Policy Landscape and Implications for U.S. Industry
Climate Change: Current Policy Landscape and Implications for U.S. IndustryClimate Change: Current Policy Landscape and Implications for U.S. Industry
Climate Change: Current Policy Landscape and Implications for U.S. Industry
 
Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...
Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...
Zinc8 Energy Solutions: Getting de-risked and raised by a global network of c...
 
INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...
INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...
INDUSTRY 4.0 AS AN OPPORTUNITY TO ACHIEVE ENVIRONMENTAL SUSTAINABILITY: THE D...
 
Corporate action 1
Corporate action 1Corporate action 1
Corporate action 1
 
Competition Monitor issue 3 january 2018
Competition Monitor issue 3 january 2018Competition Monitor issue 3 january 2018
Competition Monitor issue 3 january 2018
 
Directions 10
Directions 10Directions 10
Directions 10
 
AcuComm's Competition Monitor | SAMPLE
AcuComm's Competition Monitor | SAMPLEAcuComm's Competition Monitor | SAMPLE
AcuComm's Competition Monitor | SAMPLE
 
This topic dbtopic-889
This topic dbtopic-889This topic dbtopic-889
This topic dbtopic-889
 
Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...
Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...
Aidan Davy: Sustainable Mining (Day 2 - Session 6: Sustainable Mining & Confl...
 
How Artificial Intelligence Can Power Climate Change Strategy
How Artificial Intelligence Can Power Climate Change StrategyHow Artificial Intelligence Can Power Climate Change Strategy
How Artificial Intelligence Can Power Climate Change Strategy
 
Corporate Social Responsibility review n.2 (August2015)
Corporate Social Responsibility review n.2 (August2015)Corporate Social Responsibility review n.2 (August2015)
Corporate Social Responsibility review n.2 (August2015)
 
09-089 May 18, 2009 This case was prepared by Reb.docx
09-089  May 18, 2009 This case was prepared by Reb.docx09-089  May 18, 2009 This case was prepared by Reb.docx
09-089 May 18, 2009 This case was prepared by Reb.docx
 
Safety Mining Advertising
Safety Mining AdvertisingSafety Mining Advertising
Safety Mining Advertising
 
EU Horizon 2020 Funded Project SCRREEN Publishes Final Output Report
EU Horizon 2020 Funded Project SCRREEN Publishes Final Output ReportEU Horizon 2020 Funded Project SCRREEN Publishes Final Output Report
EU Horizon 2020 Funded Project SCRREEN Publishes Final Output Report
 
Technology Strategy Report - Case UPM Biofuels
Technology Strategy Report - Case UPM BiofuelsTechnology Strategy Report - Case UPM Biofuels
Technology Strategy Report - Case UPM Biofuels
 
Rare Earth Elements Markets Worldwide
Rare Earth Elements Markets WorldwideRare Earth Elements Markets Worldwide
Rare Earth Elements Markets Worldwide
 
TACC615 Professional Accounting Capstone.docx
TACC615 Professional Accounting Capstone.docxTACC615 Professional Accounting Capstone.docx
TACC615 Professional Accounting Capstone.docx
 

Recently uploaded

2024-6-01-IMPACTSilver-Corp-Presentation.pdf
2024-6-01-IMPACTSilver-Corp-Presentation.pdf2024-6-01-IMPACTSilver-Corp-Presentation.pdf
2024-6-01-IMPACTSilver-Corp-Presentation.pdf
hartfordclub1
 
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challenges
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesEvent Report - SAP Sapphire 2024 Orlando - lots of innovation and old challenges
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challenges
Holger Mueller
 
Business storytelling: key ingredients to a story
Business storytelling: key ingredients to a storyBusiness storytelling: key ingredients to a story
Business storytelling: key ingredients to a story
Alexandra Fulford
 
BeMetals Investor Presentation_June 1, 2024.pdf
BeMetals Investor Presentation_June 1, 2024.pdfBeMetals Investor Presentation_June 1, 2024.pdf
BeMetals Investor Presentation_June 1, 2024.pdf
DerekIwanaka1
 
Company Valuation webinar series - Tuesday, 4 June 2024
Company Valuation webinar series - Tuesday, 4 June 2024Company Valuation webinar series - Tuesday, 4 June 2024
Company Valuation webinar series - Tuesday, 4 June 2024
FelixPerez547899
 
Creative Web Design Company in Singapore
Creative Web Design Company in SingaporeCreative Web Design Company in Singapore
Creative Web Design Company in Singapore
techboxsqauremedia
 
Building Your Employer Brand with Social Media
Building Your Employer Brand with Social MediaBuilding Your Employer Brand with Social Media
Building Your Employer Brand with Social Media
LuanWise
 
Part 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 SlowdownPart 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 Slowdown
jeffkluth1
 
How MJ Global Leads the Packaging Industry.pdf
How MJ Global Leads the Packaging Industry.pdfHow MJ Global Leads the Packaging Industry.pdf
How MJ Global Leads the Packaging Industry.pdf
MJ Global
 
Industrial Tech SW: Category Renewal and Creation
Industrial Tech SW:  Category Renewal and CreationIndustrial Tech SW:  Category Renewal and Creation
Industrial Tech SW: Category Renewal and Creation
Christian Dahlen
 
Understanding User Needs and Satisfying Them
Understanding User Needs and Satisfying ThemUnderstanding User Needs and Satisfying Them
Understanding User Needs and Satisfying Them
Aggregage
 
3 Simple Steps To Buy Verified Payoneer Account In 2024
3 Simple Steps To Buy Verified Payoneer Account In 20243 Simple Steps To Buy Verified Payoneer Account In 2024
3 Simple Steps To Buy Verified Payoneer Account In 2024
SEOSMMEARTH
 
Chapter 7 Final business management sciences .ppt
Chapter 7 Final business management sciences .pptChapter 7 Final business management sciences .ppt
Chapter 7 Final business management sciences .ppt
ssuser567e2d
 
ikea_woodgreen_petscharity_cat-alogue_digital.pdf
ikea_woodgreen_petscharity_cat-alogue_digital.pdfikea_woodgreen_petscharity_cat-alogue_digital.pdf
ikea_woodgreen_petscharity_cat-alogue_digital.pdf
agatadrynko
 
Structural Design Process: Step-by-Step Guide for Buildings
Structural Design Process: Step-by-Step Guide for BuildingsStructural Design Process: Step-by-Step Guide for Buildings
Structural Design Process: Step-by-Step Guide for Buildings
Chandresh Chudasama
 
LA HUG - Video Testimonials with Chynna Morgan - June 2024
LA HUG - Video Testimonials with Chynna Morgan - June 2024LA HUG - Video Testimonials with Chynna Morgan - June 2024
LA HUG - Video Testimonials with Chynna Morgan - June 2024
Lital Barkan
 
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
taqyea
 
Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024
Adnet Communications
 
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.
AnnySerafinaLove
 
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta MatkaDpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
➒➌➎➏➑➐➋➑➐➐Dpboss Matka Guessing Satta Matka Kalyan Chart Indian Matka
 

Recently uploaded (20)

2024-6-01-IMPACTSilver-Corp-Presentation.pdf
2024-6-01-IMPACTSilver-Corp-Presentation.pdf2024-6-01-IMPACTSilver-Corp-Presentation.pdf
2024-6-01-IMPACTSilver-Corp-Presentation.pdf
 
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challenges
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesEvent Report - SAP Sapphire 2024 Orlando - lots of innovation and old challenges
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challenges
 
Business storytelling: key ingredients to a story
Business storytelling: key ingredients to a storyBusiness storytelling: key ingredients to a story
Business storytelling: key ingredients to a story
 
BeMetals Investor Presentation_June 1, 2024.pdf
BeMetals Investor Presentation_June 1, 2024.pdfBeMetals Investor Presentation_June 1, 2024.pdf
BeMetals Investor Presentation_June 1, 2024.pdf
 
Company Valuation webinar series - Tuesday, 4 June 2024
Company Valuation webinar series - Tuesday, 4 June 2024Company Valuation webinar series - Tuesday, 4 June 2024
Company Valuation webinar series - Tuesday, 4 June 2024
 
Creative Web Design Company in Singapore
Creative Web Design Company in SingaporeCreative Web Design Company in Singapore
Creative Web Design Company in Singapore
 
Building Your Employer Brand with Social Media
Building Your Employer Brand with Social MediaBuilding Your Employer Brand with Social Media
Building Your Employer Brand with Social Media
 
Part 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 SlowdownPart 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 Slowdown
 
How MJ Global Leads the Packaging Industry.pdf
How MJ Global Leads the Packaging Industry.pdfHow MJ Global Leads the Packaging Industry.pdf
How MJ Global Leads the Packaging Industry.pdf
 
Industrial Tech SW: Category Renewal and Creation
Industrial Tech SW:  Category Renewal and CreationIndustrial Tech SW:  Category Renewal and Creation
Industrial Tech SW: Category Renewal and Creation
 
Understanding User Needs and Satisfying Them
Understanding User Needs and Satisfying ThemUnderstanding User Needs and Satisfying Them
Understanding User Needs and Satisfying Them
 
3 Simple Steps To Buy Verified Payoneer Account In 2024
3 Simple Steps To Buy Verified Payoneer Account In 20243 Simple Steps To Buy Verified Payoneer Account In 2024
3 Simple Steps To Buy Verified Payoneer Account In 2024
 
Chapter 7 Final business management sciences .ppt
Chapter 7 Final business management sciences .pptChapter 7 Final business management sciences .ppt
Chapter 7 Final business management sciences .ppt
 
ikea_woodgreen_petscharity_cat-alogue_digital.pdf
ikea_woodgreen_petscharity_cat-alogue_digital.pdfikea_woodgreen_petscharity_cat-alogue_digital.pdf
ikea_woodgreen_petscharity_cat-alogue_digital.pdf
 
Structural Design Process: Step-by-Step Guide for Buildings
Structural Design Process: Step-by-Step Guide for BuildingsStructural Design Process: Step-by-Step Guide for Buildings
Structural Design Process: Step-by-Step Guide for Buildings
 
LA HUG - Video Testimonials with Chynna Morgan - June 2024
LA HUG - Video Testimonials with Chynna Morgan - June 2024LA HUG - Video Testimonials with Chynna Morgan - June 2024
LA HUG - Video Testimonials with Chynna Morgan - June 2024
 
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
 
Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024
 
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.
 
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta MatkaDpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
 

Esg myth mining companies will be last to embrace esg may2018

  • 1. May 2018 Petra Daroczi Thomson Reuters ESG myth: the mining sector will be last to embrace ESG. IN OTHER WORDS, INVESTORS IN MINING COMPANIES ARE MUCH LESS AFFECTED BY ESG CONSIDERATIONS THAN INVESTORS IN OTHER SECTORS. Have you heard of a company called Rio Tinto? Surely. Have you heard of a company called Alcoa? Maybe not. And have you heard of a company called Apple? I bet you have. How do these three distinct companies come together in the ESG space? In case you have missed, Reuters breaking news came out on 11 th May that Rio and Alcoa will launch a joint venture called “Elysis” to develop and commercialise the world’s first carbon-free aluminum smelting process. If you are no miner like me you probably didn’t know that 1) aluminum smelting (the process of burning alumina) releases large quantities of greenhouse gas, 2) aluminum is one of the most important raw material inputs into the fabrication of consumer electronics (amongst other goods). A quick search using the “Search & Discover” app, which uses artificial intelligence to look for keywords/terms across content (news, broker research, filings, and transcripts) in just a few seconds, sheds light on the fact that the JV is backed by Apple who will invest USD 10m. We learn that Apple has been quite resolute to reduce it carbon footprint across the board: only last month it announced the move to 100% clean energy at its facilities. So far, so good. Alcoa is partnering with one of the largest mining companies in the world, it is developing a groundbreaking, environmentally-sustainable process to produce one of the most widely-used metal raw materials, and it has potentially already secured a large customer who will be incorporating its final produce in its supply chain. What about its ESG factors? Is Alcoa really living up to its “sustainability” leadership?
  • 2. ESG MYTHS THOMSON REUTERS While Thomson Reuters-sourced ESG data on Alcoa is only available from 2016, there is a lot of useful information in this raw data. We learn that Alcoa is quite ambitious in the “E” (environmental”) sphere: it has already set specific objectives for resource reduction, for water and energy efficiency; it is setting an example amongst its peers by generating more than 30% of its total energy from renewable energy sources; and it has engaged in a number of ‘environmental partnerships’, such as NGOs, industry organizations, governmental organizations, etc. to improve environmental issues. An interesting clue to how the company is thinking about ESG and sustainability relates to the metric “Climate change commercial risks: Is the company aware that climate change can represent commercial risks abd/or opportunities?”: As the below screenshot indicates, this is mentioned a number of times in its Sustainability Report. The exact source, paragraph, page number are all indicated to give analysts a peace of mind as to the reliability of the data. Another interesting find in terms of the “S” (social) relates to injuries, which is quite an important aspect of basic materials (mining, chemicals, packaging, etc.) companies. The ESG Peer view tool, a visual dashboard enabling the comparison of sectors/geographies/metrics, helps us understand where Alcoa stands in terms of the Total number of injuries to million hours (Injuries and fatalities including no-lost-time injuries relative to one million hours worked): out of 76 companies in the basic materials sector, it ranks number 8 with 10.66 injuries. There is clearly some improvement to make in its safety & work accident procedures.
  • 3. ESG MYTHS THOMSON REUTERS If we were to draw a quick conclusion, we could say that 1) ESG is indeed extremely relevant to the mining sector, 2) ESG and sustainability issues should indeed be incorporated into the investment analysis and decision-making process since these have important implications on the long-term performance of the company (think of Alcoa’s sustainable aluminum-making process and Apple as a long-term customer), 3) mining through (literally) ESG data for a company can reveal a lot of additional insights as to how the company operates and thinks of its future strategy.