The Financial Times has a useful article on ESG (Environment, Social, Governance) issues for the extractive industries. “Fatal environmental disasters, corruption and bribery allegations, polluting fossil fuels production …[are] making the industry increasingly uninvestable at a time when demand for socially responsible investments is booming”, it says. The recent Vale dam disaster is a very visible and public example of problems in the industry. But the problems of Glencore in the DRC, Nigeria and other places are also well known. The rise in ESG investing has created the need for indices to allow large investors such as the Church of England pension fund, CalPERS the California Public Employees’ Retirement System, to judge the risks facing companies they might wish to invest in.
A further article notes that BHP has been advocating that tailings dams should have “nuclear levels” of safety measures and that there should be a move within the industry to insist on independent third-party monitoring of the safety of tailings dams around the world.