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TSF governance solution helping companies with investor sentiment

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Mining & Resources / Tailings Storage Facilities

TSF governance solution helping companies with investor sentiment

Highlights

 

 

Environmental, social and governance (ESG) has firmly established itself in the investor lexicon to describe the three central factors in measuring sustainability and societal impact of an investment in a company or business. Often companies will offer company-specific ESG metrics as a benchmark for investors to analyse the overall quality of their governance and risk management processes and how they position within an industry sector.

This growing interest in ESG from institutional investors reflects increasing pressure from stakeholders to show they are investing ethically, and in solutions not problems. CEOs now realise that often good ESG performance can correlate to their long-term success by exposing them to a larger pool of capital and diversified investor base.

However on the other-hand, in the mining industry recent catastrophes, such as the devastating collapse of a tailings dam near the town of Brumadinho, Brazil, in January 2019, served to highlight the critical importance of getting ESG right if companies are to attract investment and retain their social Licence to Operate (LTO).

Just days after the devastating tailings failure which resulted in the loss of 270 lives, countless livelihoods and the significant environmental damage that comes from 12 million cubic metres of toxic tailings being released, a group of investors from the Church of England Pensions Board and the Swedish Council of Ethics of AP Funds co-led the Investor Mining and Tailings Safety Initiative.

The Initiative is convened by institutional investors active in extractice industries including major asset owners and asset managers, and together represent USD$14 trillion in assets under management.

Through the initiative, they staged several global interventions including making a call for a global industry standard, and requesting 727 extractive mining companies to make disclosures about their tailings storage facilities to form an independent global database, and provide the industry with a new level of transparency.

“How companies react this year will determine our actions in 2021: while our approach has always been driven by engagement over divestment, we will consider shifting capital away from non-responsive companies.

David Cumming, Chief Investment Officer for Equities, Aviva Investors

 

The mining industry’s response to the  investors’ demand was strong with:

  • 340 responding (representing 47% of the companies contacted)
    • 187 confirmed they did not have tailings facilities (representing 26%)
    • 153 confirmed they did have tailings facilities
  • 45 out of the top 50 largest mining companies in the world responded
  • 86% of the industry by market capitalisation responded
  • 65% of the industry by market capitalisation fully and publicly disclosed
  • 23 out of 23 publicly listed members of the International Council of Mining & Metals responded and publicly disclosed.

 

The Initiative served to highlight just how powerful investors are placed to address systemic and ESG related-issues, and that through collaboration with both ‘top down’ (co-convening a global standard) and ‘bottom up’ (request for detailed information on TSFs) methods, investors are uniquely placed to initiate a step-change in the industry.

See what score you get for your TSF management

 

How to utilise technology to improve investor sentiment

Mining companies are required to move beyond compliance and to demonstrate to investors that they are adopting ‘good practice’ such as ICMM’s ten mining principles which encourages greater risk management and continuous engagement with third-party stakeholders including NGOs, local or indigenous communities, community and political leaders.

After hearing the industry’s challenges, Decipher and K2Fly have come together to combine their complementary technology strengths to create a solution to help tier 1 and 2 mining companies address the key elements of tailings management, governance, monitoring and disclosure. Armed with the solution, mining companies can visually demonstrate their commitment to ESG and good governance, and thus improve investor sentiment and confidence.  

The partnership, and the software solution provided, offers a direct response to a recently published report by KPMG which recognised tailings management as one of the top 10 risks to the global mining industry.

Decipher Chief Executive, Anthony Walker said:

“The resources industry needs a solution that is cost effective, comprehensive and accessible – and we can deliver on that.”

A large number of K2fly’s Mineral Inventory Governance and Reporting clients have drawn a direct link between Resource Governance and Tailings Governance. With the broader importance of ESG, this is a positive step forward in how these issues need to be framed, considered and responded to.

Drawing on this experience, the detailed Governance and Monitoring solution is designed to bring a variety of tailings data such as IoT devices, LiDAR, radar, CCTV, drones, inspections and remote sensing into one central location, as a way of monitoring potential failure modes. Reporting from the solution ensures that key personnel (site and corporate) are regularly informed of the facility’s performance and notified of customer defined exceedances. The solution has also been designed to provide independent users (investors, auditors, ITRB, insurance companies) with a quick and effective knowledge management tool so that you can visually demonstrate good governance, enable better understanding of the facility and as a result, reduce insurance premiums or improve investor sentiment.  

Our new integrated governance dam and tailings software solution will help mining companies ensure TSFs are designed, constructed, monitored, managed, and overseen in accordance to the GTS.

The solution will provide:

  • Management and governance around key stakeholders in Tailings Facility lifecycle
  • Workflows and audit tracking for transparency in reporting
  • Capturing/sourcing and searching documentation
  • Controlling the functioning of the Independent Tailings Review Board
  • Advanced monitoring tools such as earth observations (NDVI, NDRE, NDWI, MSAVI), InSAR, IoT and LiDAR, Landform & Erosion, Environmental Monitoring & Sampling to monitor performance and potential risks
  • Tools to manage obligations, actions and stakeholders
  • The ability to visually demonstrate commitment to ESG and good governance

Contact us to discuss our Governance and Monitoring solution, and your company specific requirements. 

Learn more or request a demo

 

 


Effectively monitor your tailings storage facility with Decipher

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