In the 12-year history of our global mining risks and opportunities research, 2022 marks quite a moment. Every year, commodities risk has been at the top of the industry’s risk radar. But now, that has been displaced. So, what has overtaken it?
In three letters: E-S-G.
Climate related risks – environmental risks and regulations – have become the new number one concern, and another ESG-related risk – social license to operate – is in third position.
For an industry that inherently operates over the long-term, these shifts in a short space of time are striking. They underline the extent to which climate change related issues and ESG more broadly are reframing corporate priorities in mining, as in almost every business sector.
Our research underlines how much has happened in just one year. The pandemic has disappeared from the top ten. Issues relating to geopolitics – political instability, nationalization, global trade wars – loom large. And with events in Eastern Europe unfolding, they will be even more top of mind now.
It all adds up to a landscape filled with both risk and opportunity. Our report offers deep insight into the views of mining leaders around the world and how they are navigating the challenges while building on outstanding opportunities for growth.
As the world’s supply chains look to meet rising demands, the mining industry finds itself increasingly in the spotlight, being challenged to quickly deliver the materials the world needs in a way that is acceptable to more and more stakeholders. In my view, transparency and high-quality engagement will be critical. For those who get it right, I believe the rewards will be significant!
The survey reveals a resilient sector responding to a rapidly shifting environment of complex and diverse risks.
of respondents expect a disruption in the mining sector due to ESG in the next three years.
agree that success in the long run will become increasingly dependent on defining success in broader than just financial terms
are confident in the growth prospects for their organization over the next 12 months
The stand-out feature is the rise of ESG. With environmental risks and regulations the top industry risk, and social license to operate at number three, it is clear that executives have fully taken on board the importance of addressing climate change and the ESG agenda. Nearly three-quarters of them (72 percent) agree that ESG will be a cause of major disruption in the industry over the coming three years.
But not everything has changed. Commodity price risk remains a key concern and sits at number two, while other perennial issues for the sector such as permitting risk and the ability to access and replace reserves remain in the top ten. Three of the top risks identified (trade war, regulatory shocks, political stability) could be described more broadly as geopolitical risk. Unsurprisingly, businesses are feeling the impact of growing geopolitical volatility in a world of uncertain power dynamics.
These factors are doubtless also contributing to a new entrant in this year’s top ten – supply chain risk. Alongside that, there is a further new entrant, namely the talent crisis. Attracting and retaining the right people is becoming an increasingly live issue for the industry that confronts almost every player.
Inside the minds of mining leaders