Shaping a Strong ESG Narrative in the Mining Sector

An ongoing conversation with insurers

ESG considerations have always been part of the mining industry, driven by the need to address significant environmental impacts, liaise with local communities, and comply with rigorous governance frameworks. The announcement earlier this year by Zurich Insurance that the company will stop underwriting new oil and gas projects serves as a reminder of the need for ongoing ESG conversations. Whilst Zurich will support existing clients and their existing operational footprint, they are limited in their support for expansions. As 2030 approaches, mining companies need to be prepared to demonstrate a strong and credible ESG narrative to ensure continued support.

Why a strong ESG narrative matters

A well-defined ESG narrative helps mining companies align with stakeholder expectations, mitigate risks, and enhance their social license to operate. It acts as a communication tool, showcasing the company’s dedication to sustainable practices, environmental stewardship, social equity, and robust governance. In an era where ESG-linked capital is becoming the norm, companies that can convincingly demonstrate their commitment to sustainability are better positioned to secure funding and maintain operations.

“The work that we’re doing is really making sure that our clients are drawing out all of the good things that they are doing from an ESG perspective as it becomes more and more of a focus for their insurers. And making sure they’re representing that in the best light.”

– Stacey Lloyd, National Director, Mining

The need to address all components of ESG

While environmental factors are well understood as part of an ESG strategy, being able to develop clear narratives around social and governance issues will also be key to effective commercial outcomes for the sector. As the energy transition accelerates, the mining industry must attract a diverse range of high-potential candidates to address talent shortages, particularly in areas such as cybersecurity, technology, and engineering. An effective ESG narrative highlights the company’s efforts to foster an inclusive and dynamic workforce, positioning it as an attractive employer in a competitive market.

ESG is a top 10 risk for the natural resources industry

What does good look like?

Aon’s Global Risk Management Survey tells us that 62% of respondents stated their organisations have set up plans to respond to risks in the top ten. This is good news but having a plan is just the start when it comes to ESG. By leveraging data, maintaining transparent communication, and continuously updating their ESG strategies, mining companies can build trust, enhance their reputation, and secure the resources needed for sustainable growth.

A data driven approach enhances credibility

By leveraging data effectively, organisations can track their ESG performance providing clear indicators for the ability to meet future commitments and demonstrate accountability. Data can support all aspects of ESG. For example, from an environment standpoint using data to measure emissions, and model impacts on local communities is invaluable. Data can also be used to provide insights on pay equity and provide the analytics needed to address pay gaps and identify the structural changes that will underpin equity going forward.

Communication is key

A credible ESG narrative hinges on consistent, transparent, and engaging communication with all stakeholders, including investors, employees, communities, and regulators. Effective communication builds trust, fosters positive relationships, and enhances a company’s reputation. It’s essential to highlight successes and acknowledge challenges, providing clear steps for improvement. Transparency and accountability are key to maintaining stakeholder confidence and support.

Bringing stakeholders on the journey

Proactive communication involves regularly updating stakeholders on ESG initiatives, progress, and challenges through various channels, including sustainability reports, press releases, social media, and stakeholder meetings. Consistent messaging helps stakeholders stay informed and reinforces the company’s ongoing commitment to ESG principles.

As the industry moves forward, those with strong ESG narratives will be better positioned to thrive in a rapidly changing world.

At Aon, we use global expertise and world-class data and analytics capability to diagnose and address your specific ESG risks and opportunities. To find out more about the tools and capabilities that Aon’s mining team has in place to help advance your ESG strategy, download our ESG Capability Statement here.

If you’d like to speak a specialist in the team, please contact Stacey Lloyd, National Director for Mining at stacey.lloyd@aon.com.