External Environment, Social and Governance (ESG) reviews can happen for a number of reasons. It may be part of a multidisciplinary study aiming to raise finance from lenders or private investors, it may be part of a resource/reserve reporting statement, or it may just be to inform internal decision making. The guidance below aims to help you, the reviewee, to be prepared so the process is streamlined and effective.
1. Agree the assessment criteria to be used for the review. Assessment will almost certainly need to be done against the host-country regulatory requirements, but external third parties may wish to see consideration of other international good practice guidelines or standards. There are now a plethora of standards, guidelines and assurance frameworks being used by financiers, supply chains and mining companies so it is vital to understand what is going to be used during the review.
2. Establish a well organised, logical and comprehensive data room. In addition to environmental and social impact assessment reports, monitoring reports and environmental and mining permits, it should contain evidence of operational controls, management plans, compliance assessments, stakeholder engagement, management reporting and future planning.
3. Ensure commitment / obligation registers are established, comprehensive and up to date. These should not just indicate if the commitment has been met but provide a linkage to where the evidence in support of this can be found. A robust up to date register is one of the best ways to streamline a review.
4. Have up to date site layout/s available showing project infrastructure (current and planned), monitoring locations, adjacent impact receptors (for example: communities, protected areas, water courses) and surrounding land uses.
5. Give a heads up to your health & safety, procurement, security and human resources departments that they may need to be interviewed. Modern ESG assessments cover a much wider scope than just environment and community.
6. Where the ESG review is part of a multi-disciplinary due diligence, ensure the ESG aspects are not side-lined in favour of geology, mining and processing disciplines, which come easier to most mine managers.
7. Do not limit site visits to the success stories – a thorough reviewer will see through it. If you are open and honest about your challenges, then they can be fairly represented in the review report. If they are hidden or glossed over, then the reviewer will likely be overly conservative and may be suspicious.
8. Talk the language of risk and materiality with the reviewers. They have to input to the modifying factors of a resource/reserve statement and/or a project valuation economic model. Costs and schedule delays arising from a number of factors may well end up being material so the more informed they are the more accurately they can reflect your project.
9. Stand-up for your beliefs. ESG practitioners often have a broad background and may not be familiar with your site-specific context. If they indicate they are not comfortable with something, question why and, if you disagree, explain your reasons for why you do it your way. Remember it is okay to disagree with the reviewer and it is important your perspective is acknowledged.
10. Make the most of having a set of independent eyes on your activities. See the review as an opportunity to help achieve continuous improvement.
