Climate change and ESG transforming mining risk

Climate change and Environmental Social Governance (ESG) will transform the energy industry risk landscape, according to Willis Towers Watson in its annual Mining Risk Review. This transformation is taking place against the backdrop of the impact of both the COVID-19 pandemic and a rapidly hardening global insurance marketplace.

ESG forms the key theme of the report, highlighting that the transition to a low carbon economy requires a fundamental reappraisal of mining company climate risk.

The review shows that achieving a satisfactory ESG rating will be critical in enabling mining companies to attract and maintain the support of key stakeholders in the future.

Graham Knight, head of Global Natural Resources, Willis Towers Watson, said: “In these unprecedented times, the mining industry finds itself beset by challenges from all sides, as COVID-19 tightens its stranglehold on the global economy and insurance market conditions harden.

”However, it is the issue of climate risk and ESG that will have a more significant impact on the future shape of the industry. Mining companies must incorporate ESG, above all climate change into their risk mitigation strategies in order to survive in the future.”

He added: “Mining companies need to know how the energy transition is going to affect their industry, why climate change is already transforming their industry risk landscape, how they can play a strategic role in developing their response to this transition and which ESG pressures are going to affect the industry in the future.”