The Lexpert Special Editions profiles selected Lexpert-ranked lawyers whose focus is in Corporate, Infrastructure, Energy and Litigation law and relevant practices. It also includes feature articles on legal aspects of Canadian business issues.
Issue link: https://digital.carswellmedia.com/i/1480531
www.lexpert.ca 5 challenges – and paths to growth – lie. "e climate crisis and rising stakeholder expec- tations are increasingly significant forces of change," the EY survey says. Environment and social concerns took the number one spot in their rankings for the first time, followed by decarbonization and then license to operate, which had held the top position over the past three years. Two new entrants to the ranking – uncertain demand and new business models – highlight the ongoing volatility in a market still impacted by COVID-19. Still, the survey shows "more opportuni- ties than risks for miners willing to make the transformational changes that can drive long-term value for organizations and the communities they serve." Jennifer Wasylyk, a partner and co-chair of the banking and specialty finance and ESG groups at Cassels Brock & Blackwell LLP, says that while ESG issues can apply to any company and its operations, some impact mining companies more than others. "Human rights and security are two big ones," she says. "What security risks is a project exposed to, and how are those risks being managed? Does a company have appropriate policies, struc- tures, and tools to mitigate human rights risks, which will be even more important in regions with weaker human rights protections?" Relationships with Indigenous groups and artisanal miners are also integral ESG concerns for mining companies. "at has always been the case," says Wasylyk, but now there is an emphasis on working with Indigenous groups going far beyond specific laws requiring consultation. Employee health and safety is another big ESG concern that mining companies must focus on, Wasylyk says. So is management and employee diversity, a hybrid of the social and governance concerns. ESG also encompasses concepts such as anti-corruption and anti-bribery efforts. "It's a focus for all companies," says Wasylyk, "but mining companies, in particular, can operate in jurisdictions where these can be big concerns." Wasylyk's colleague Jen Hansen, a partner in the securities group at Cassels and co-chair of the mining group, notes that the role that ESG plays in the operation of companies, including mining companies, has grown. She says there is also an increasing desire for enhanced disclo- sure of ESG practices and strategies. "ere is going to be a move away from boil- erplate language," Hansen says. "It won't be enough for regulators and stakeholders alike." Stakeholders are more engaged these days on ESG issues and are more prepared to chal- lenge companies, including using their voting rights to ensure issuers live up to the principles they say are important. "We're going to see an increased call for real action, real expertise, and better disclosure." But Wasylyk adds that enhanced ESG disclosure can also create opportunities for companies. "Given the number of investors and lenders that have publicly committed to considering ESG issues when making invest- ment decisions, companies can leverage their ESG policies to attract investment," says Wasylyk. Increasing scrutiny and regulation "What companies are starting to understand is that they will be measured on ESG prin- ciples whether they like it or not," says José Ignacio Morán, a partner of the Dentons' office in Santiago, Chile. He is the global mining and natural resources practice leader and a member of the firm's international ESG steering committee. Morán points out that "companies will likely see more ESG regulation within the next two or three years than we probably have seen in the past 20 years." And while there are efforts to try to harmonize those regulations worldwide, the reality is that there will likely be differences between countries and regions. Given this context, Morán says mining companies looking for advice on ESG must first devise a strategy for dealing with the various elements such a plan would encom- pass. He says questions that need to be asked and answered include: "Is the company and its board covered for loss and liabilities related to ESG? How is the company measuring the impact of their ESG strategy? How are they reporting the strategy and the results of that strategy to stakeholders?" "We're seeing that the focus of mining companies has adapted from simply meeting environmental standards to looking at broader matters of environmental stewardship" Robin Longe DENTONS CANADA LLP "Given the number of investors and lenders that have publicly committed to considering ESG issues when making investment decisions, companies can leverage their ESG policies to attract investment" Jennifer Wasylyk CASSELS BROCK & BLACKWELL LLP