ANGLO American said it would assess its operations against “rigorous third party certification processes” in terms of its membership of ResponsibleSteel, an programme that encourages “responsible mining and the ethical sourcing of raw materials,” the UK-listed group said in an announcement.
ResponsibleSteelTM is the steel industry’s first global, multi-stakeholder standard and certification programme, the group said. It covers the steel supply chain, from raw material supply through steel processing to use, reuse and recycling.
“Society is increasingly and rightly demanding products made from metals and minerals that are responsibly and sustainably sourced – and that includes steel, a material that forms the very backbone of our world’s modern infrastructure,” said Seamus French, CEO of the group’s bulk commodities. The aim was to have all Anglo American sites recognised for responsible mining by 2025.
The ability of the world’s mining sector to offer a credible investment option was hampered by risks associated with its environmental, social and governance (ESG) standards, according to Reuters in a report in May this year.
“All the large mining companies are trading on high free cash flow yields relative to the broader market when you adjust for capital spending on growth projects,” Nick Stansbury, head of commodity research at Legal & General Investment Management, told Reuters.
“This is indicative of the market’s scepticism about the sustainability of those cash flows, the robustness of capital allocation by management and the sector’s challenges around ESG issues,” he said.
ESG concerns were increasingly influencing asset managers in their stock pics, said Bloomberg in July citing a report by Canada’s Canaccord which concluded that “… two-thirds of asset managers now employ one form of ESG investing over a portion of their investment mandates”.
Canaccord listed 16 top Canadian ESG picks in a research note to clients this week that included B2Gold that was “… committed to ESG principles and has published an annual Responsible Mining Report outlining the company’s economic, environmental, and social performance since 2016”.
“With Canadian ESG assets under management growing over 20% in the last two years, we believe momentum continues to build within the ESG investment landscape,” Canaccord’s Canadian equity research team added in its note.