Commentary: Despite increasing regulation, mining companies are still slow to seeking legal advice on social and environmental governance
Author: Fieldfisher, Mining.com, Published on: 20 May 2019
"Mining companies need to start thinking seriously about ESG - opinion", 12 May 2019.
The introduction of new, tougher standards together with recent case law, point to a harsher, less forgiving approach to enforcement and larger fines for regulatory non-compliance and failings in relation to environmental and social governance. European law firm Fieldfisher has observed a notable uptick in enquiries from mining clients on how to comply with increasingly strict standards on environmental and social governance (ESG). However, many companies still fail to obtain legal advice on their obligations...Activist shareholders staging protests at AGMs and other company meetings has also become a real concern for mining businesses...anecdotal evidence suggests the number of London-listed mining clients seeking legal advice has increased, but not commensurately with the volume of new regulations and guidelines that have been introduced...
Commenting on this trend towards more robust ESG in the mining sector, Fieldfisher’s head of mining, Jonathan Brooks, said: “While in the past, ESG was seen as a concern reserved for mid-to-large cap mining companies, there has been a noticeable trickle-down effect in the last two years to the small-cap and junior end of the market. These companies need to sit up and take notice, not just to be compliant, but to unlock the benefits that come from implementing ethical and sustainable business practices....Demonstrating good ESG is increasingly seen as vital to securing investment in mining projects – particularly traditional equity financing from public markets and alternative financing from offtakers, private equity and multilateral and bilateral financial institutions and contractors."