ESG
> By Katherine Dawal
ESG What it means for your insurance
IMAGE: KMINGWW/ISTOCK
ESG:
three letters that have been driving the evolution of global decision making. In recent years, we have seen insurance companies making executive level decisions to stop supporting certain industries they feel are not “ESG friendly.” But what does it really mean to have good ESG credentials, and how can mining companies adapt? Mining operations are part of the problem and solution for E (Environmental). The world’s use of non-renewable energy, JUNE/JULY 2022
including coal, natural gas, and petroleum, produce greenhouse gas emissions, which have a negative effect on climate change. The shift from coal power generation has already begun; however, the energy transition will take time especially in developing countries where the capital resources required for cleaner energy are more difficult to obtain. Thermal coal will still be needed during the energy transition if we want to keep our lights on, but some insurers have announced they are phasing out support for this industry. Mining
companies producing thermal coal are forced to find alternative risk transfer solutions, such as captives, increasing retention levels, and using non-conventional insurance markets. Some insurance companies have realized they were too quick to make executive level decisions to stop supporting non-renewable industries after realizing the world cannot quickly move from non-renewable energy sources to 100% renewable energy. The technology for constant reliable renewable energy has yet to be creCONTINUED ON PAGE 36
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