Global Mining Symposium: Companies that don’t embrace ESG will have trouble accessing capital, says Jamie Strauss of Digbee ESG

Companies in the mining industry need to move away from the mindset that environmental, social, and governance disclosure is primarily a compliance issue to a mindset that embeds ESG awareness and permeates it throughout the entire organization.  

That’s the key takeaway from a discussion at the recent Global Mining Symposium, which explored how investors and other stakeholders can better track the ESG performance of mining companies. 

“If you think of the heart of ESG, it’s actually just common sense,” Jamie Strauss, founder, president and CEO of Digbee ESG, an ESG disclosure platform for the mining industry that is currently in development. “The problem, however, is how do companies practically disclose ESG performance when there are over 40 different ESG standards, which is well beyond the resources available for most explorers, developers, and producers to properly and accurately assess and disclose their ESG performance.”

The lack of standardization means there is no meaningful way for fund managers, investors, and stakeholders to assess and compare a company’s ESG performance. “Consequently, the benefits for those companies that properly apply sound ESG principles are lost, leading to a credibility gap for companies that are tracking and reporting on ESG.”

Digbee, Strauss explained, provides the “silver bullet” that the industry has been looking for and will have “a positive impact on the sector as a whole” in terms of local stakeholders, society, and the environment.

“I wanted to develop a platform that takes out the guesswork for companies to track and disclose their ESG footprints,” he said. “Now, they don’t have to compare different [ESG] frameworks or global standards. Everything is all on one platform that allows them to compare performance easily and to track improvement over time.”

Digbee provides a framework that addresses the key questions that companies face when reporting on ESG: What do we disclose? How do we disclose it? And how do we derive value from the disclosure?

“The last point is important because if a company is not going to be rewarded for disclosure, for example, in being able to attract investors, then ESG reporting becomes a compliance function,” said Strauss. 

The platform also provides local stakeholders at the project level with access to this data, allowing the mining company to have meaningful engagement with local communities. 

In terms of efficiency of reporting, the most important thing for companies is knowing what to disclose. 

As an example, Strauss cited a recent conversation he had with a private mining company looking to list on Digbee next year. The company’s permitting specialist was tasked with reporting its ESG performance.

“She’d been given the job of providing content for the ESG section of the company’s annual report and said she had ‘no idea where to begin,’” Strauss recalled. By contrast, “she said that for permitting, there was a ‘prescribed process and we know what to deliver.’” 

Ultimately, companies will need to provide a credible score for their ESG performance, which, over time, should be tracked to make sure things are changing on the ground.

“I’m a huge believer in the industry and know what it can do in helping the world to transition to a sustainable future … and after many years in the industry you get to know all its warts and problems and you know it can do better in so many ways,” said Strauss, who has a background in investment banking with over 30 years of experience building and leading mining finance teams at boutique and global banks, in addition to serving as a director for companies such as Bacanora Minerals (LSE: BCN), Altius Minerals (TSX: ALS; US-OTC: ATUSF), and Gold Standard Ventures (TSX: GSV; NYSE: GSV).

Digbee’s ESG framework for exploration companies is already live, and the technology side of the platform is being beta-tested and should be completed in the next four to five weeks. The developers’ framework, which starts at the prefeasibility study level and goes up to production, is going through final testing and is due for release in early June, and the producers’ framework is slated to go live in September.

Mine developers already see the impact ESG has on the cost of capital, Strauss said. “For exploration companies, it’s probably not an absolute requirement today … but institutional funders now have sustainability criteria as part of their overall funding process, and to some extent, all funds are becoming sustainable in one way or another. In time, you’re simply either not going to be able to raise money, or you’re going to have a smaller pool of capital to access if you’re not embracing ESG.”