4 minute read
There’s no avoiding ESG – so let’s not make it so exhaustive
We live in strange times, and global warming and climate change have finally gained broad acceptance.
The extreme weather being experienced everywhere makes it pretty difficult to deny; and therefore, decreasing carbon levels is necessary and being taken seriously.
However, there’s a huge challenge, including how to mine the necessary minerals to achieve the products that will decrease dependency on the world’s present emission-laden products. Extracting these minerals will increase emissions, so therefore, how does one achieve lower emission levels? It’s a paradox to be sure. Then of course, the war in the Ukraine has increased the need for energy – and it’s become more political than ever (not to mention it’s now a weapon of war).
ESG is exhausting. While many companies have made significant strides, ESG, including the acronym, has become politicized to the point where many don’t see the benefits, whilst doing their level best to comply with all that is required.
With over 32 standards and frameworks worldwide, it’s no wonder companies are experiencing ESG fatigue. However, tools like the Onyen ESG reporting software are available to finally tackle the requirement to measure performance, which sets the bar even higher. Next? The TCFD (Task Force on Climate-related Financial Disclosures). The TCFD is most likely to become mandated in many jurisdictions – including Canada and the UK – and will impact not only mining, but finance, banks, fund managers, insurance companies… You name it, it’s going to impact it.
This means they will need to have data. Lots and lots and lots of data. So where
will they get it?
The ISSB was established out of COP26
in Glasgow 2021 to develop a global set of disclosures for the capital markets. With the extractives industry literally going bonkers trying to follow over
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32 separate standards (including the new ones coming out of the ICMM), depending on where you are in the world, the TCFD will be mandatory and it’s supposed to make life a little easier. The World Gold Council, the G7, and the G20 have confirmed it. Certainly, the institutional investors and financial sector is pushing it as well to manage their risks and to administer their investments on behalf of their customers.
One of the areas where the ISSB will have
a huge impact is on water measurements and their definitions. What does this mean? More confusion. Why? Presently the two main standards founded to the TCFD are SASB and the CDSB. Now that
they’ve amalgamated, we have the IFRS S2 standards. While mostly focused on GHG, the areas of how those emissions affect water isn’t really being understood.
Some creative responses have occurred in meeting this gap – take BHP’s Blue Carbon Breakthrough Grant project. It’s helping towards the development of “biodiversity credits” along the lines of “carbon credits”. We hope this initiative goes well as these credits can result in funding communities and Indigenous peoples who take stewardship of their ecosystems seriously.
The Onyen system includes TCFD and also meets the XBRL (eXtensible Business Reporting Language) requirement for outputting all ESG reporting to regulators and a plethora of financial stakeholders in the investment community for which the extractives industry relies on to thrive.
While many companies are solely focused on GHG – the fact is, water,
energy, and social risks are the areas that many capital markets stakeholders will focus on, and as the TCFD mandate
becomes a reality, the only way out of this morass of standards is technology and understanding what is really needed. It doesn’t matter how politics twists the facts. Money will always be the driver when it comes to good corporate governance and measuring sound corporate performance. And the extractives community understands that in spades. 7
ANNOUNCEMENT
ESG reporting made easy.
Onyen Corporation is pleased to announce that it has been selected as 2021’s Best ESG Reporting Solution and Best RegTech Startup of the Year by the Canadian RegTech Association/Association Canadienne de la technologie réglementaire.
Onyen provides a data collection system enabling companies to compile information on their Environmental, Social and Governance performance and practices, measure their performance against multiple international standards and prepare reports for internal tracking and external publishing. Aurania Resources Ltd., one of many Onyen customers who provided a supporting reference letter to the nominations, said:
“We found the Onyen platform to be cost-effective and very user friendly. As a junior company with limited funds and resources, this was a great fit for us. It took complicated information and broke it down into manageable sections. We are always striving to do the right thing from an ESG standpoint and we welcome input on what we can do better – the Onyen platform highlighted what we have been doing right and helped us look at the areas in which we can improve going forward. “
This is the inaugural year of the awards, sponsored by Ernst & Young Canada. The winners were selected by a panel of leading industry judges. Onyen commends the Association and Ernst & Young Canada for their initiative in supporting and recognizing the work of Canadian RegTech firms and is proud to accept these two prestigious awards.
