A lot has happened since 2012, the US re-elected Barrack Obama as President, London, not Paris hosted the Olympics, and Aussie artist Gotye topped the global billboard with “Somebody that I used to know”. It was also the year that Australia’s three levels of government agreed on the Roles and Responsibilities for Climate Change Adaptation in Australia.
Fast forward 14 years. Donald Trump is on the cusp of his second term in the White House, Sabrina Carpenter’s equally annoying Espresso is at number one on the billboards, and Australia has just made climate reporting mandatory from 1 Jan 2025.
It’s also 14 years since the Joint Ore Reserve Committee (JORC) Code was updated – and the next iteration will require companies to include report on modifying factors to address ESG Environmental, Social, and Governance (ESG) concerns.
Read more:
-
If it’s material it can’t be invisible – what the JORC does that mean?
- Index shake-ups don’t paint a pretty picture – unless you’re in copper, gold
- MinRes receives FIRB approval for $1.3b haul road stake sale, provides business update
- FBR’s Hadrian X® completes first home in US demonstration program
- How Investor Insight can amplify your story
Jeremy Peters, Director, Burnt Shirt at the Association of Mining and Exploration Companies’s (AMEC) JORC Forum this week said there was a lot lacking in the proposed updates.
“One of the key differences between the old JORC and the new JORC is that it introduces reporting on ESG,” he said.
ESG has become an increasing priority for resources sector. Australia has typically been a laggard in this space, but we are quickly catching up.
It’s important to remember that ESG is a risk framework, and the opportunities and risks facing mining and energy companies are well understood. Industry, regulatory and public expectations have shifted significantly since the Code was last updated, placing greater pressure on improved transparency and disclosure on around environment, social and governance factors.
Now, 92% of global GDP and 88% of global emissions are under a net zero pledge, and 75% of ASX200 already voluntary report on climate.
The Committee has taken changing expectations on board and included ESG reporting requirements across14 key areas – ranging from water, air, health and safety, through to heritage, human rights and ethics.
It will also cover reporting on climate, in particular greenhouse gas emissions, access to renewable energy, energy sources and scope 1, 2 and 3 emissions, as well as vulnerability to physical climate risks.
Given the plethora of established ESG reporting frameworks, and no agreed global standard, the committee would not align the Code to one particular framework.
“There is something like 90 ESG systems and frameworks that we looked at before we stopped counting, and that was in 2022,” Mr Jeffress said.
“We couldn’t identify one that we should mirror as there is clearly a Darwinian struggle going on to determine which framework becomes the global standard.”
However, the proposed changes and reporting requirements map very closely to some of the existing frameworks. Without the methodologies specified in the updated Code, it is likely more work is needed to ensure investors can easily compare ESG factors between each company.
The JORC Code is about setting in place principles, not telling companies how to do things. It’s seeking to help companies talk to investors about what is material and relevant to their projects, not prescribing which ESG framework to report against.
Equally, ESG disclosures would only need to be made on what information is available and material data only. Much of this information is already included in the existing code, and the ASX requires disclosure of any material risks – whether they are financial or ESG.
According to panellists, the heightened focus on sustainability and ESG disclosures at the board level has led to directors stepping away from ESG disclosures due to perceived greenwashing risks.
Steve Morgan, Automic Group summed it up nicely, “The world has changed. There are some challenges, especially for junior end of the market, to begin reporting on ESG. However, the mining, energy and metals industries are reliant on capital. If you look to the future behaviour of investors, ESG will continue to factor into investment decision making.”
Having a clear message is important. Getting it out there is just as important. Contact the Investor Insight team to make sure your message is heard by your target audience.
