ESG: Good for the Environment, Good for Business Investment
By Mark A. Smith, P.E., Esq.
CEO and Executive Chairman
NioCorp Developments Ltd.
Environmental, social, and governance (ESG) factors can and should play a major role in any business, particularly those involved in natural resource development. For NioCorp, these factors are part of our Company’s core values. Doing right by the environment while we serve the needs of our customers – as well as serving our society’s need for critical minerals – are central to the mission of the NioCorp team.
While most companies that focus on implementing ESG strategies are those already in production, NioCorp has made an early commitment to implementing several important ESG principles into our operations as we progress toward advancing the Elk Creek Superalloy Materials Project to commercial reality. You can see information on some of the early ESG accomplishments we have made in this animated presentation. A print-ready version of this information can be downloaded here.
Our early commitment to ESG principles and our ESG accomplishments have already placed the Elk Creek Project in compliance with the Equator Principles (http://www.equator-principles.com).
The key ESG principles that NioCorp intends to integrate into our business and the Elk Creek Project as we proceed toward commercial operation are these:
- Environmental Stewardship: seek improvement in environmental performance quality, such as water stewardship, energy use, and air where technically and economically feasible.
- Sustainability: integrate sustainable development principles into Company policies and practices where technically and economically feasible.
- Governance: apply ethical business practices and sound systems of corporate governance and transparency.
- Risk Management: identify, assess, and seek to manage significant social, health, safety, environmental and economic impacts.
- Health & Safety: develop systems that seek to improve the health and safety of employees, contractors, and people in the communities where we operate.
- Engagement: proactively engage key stakeholders on sustainable development challenges and opportunities in an open and transparent manner.
GLOBAL TRENDS ARE INCREASINGLY SHIFTING TOWARD SUSTAINABLE INVESTMENT STRATEGIES
Increasingly, a company’s ESG performance can be a critical factor in whether or not it attracts investment and capital from globally-minded investors.
For example, as the Global Sustainable Investment Alliance (“GSIA”) has reported, sustainable investing strategies now represent more than 60% of professionally managed assets for investors in the European Union. More than $60 trillion in assets is now managed by investment firms that are signatories to the United Nations-supported Principles for Responsible Investment. That number is up from $22 trillion in assets in 2010.
Among the leading sustainable investment strategies used by investors globally, ESG integration is increasingly important. In fact, according to GSIA, investments made in companies that integrated ESG practices comprised $17.5 trillion in assets in 2018. And, that number has grown by 69 percent over the past two years, GSIA reports. The chart below, from GSIA’s 2018 Global Sustainable Investment Review, shows relevant trends.
GLOBAL GROWTH OF SUSTAINABLE INVESTING STRATEGIES 2016–2018
GSIA Global Sustainable Investment Review 2018
Implementing the proper ESG culture in a business is not only good for the environment; it is also good for business. For example, the NioCorp team’s work to (1) reduce potential air emissions, (2) operate the Elk Creek facility as a zero-process-liquid discharge facility, (3) reduce waste production through recycling, (4) use mine tailings as structural underground backfill; (5) and minimize the Project’s operational footprint have both improved the projected economics of our Project and have reduced regulatory and permitting risk.
As our early experience with ESG strategies has shown, a commitment to environmental, social, and good governance values can pay off for owners and for the planet at large.