In my recent discussions leading up to the publication of our new research report, Gold and climate change: the energy transition, a journalist commented that he had once covered the gold sector and, in those years, any reference to climate change was likely to be immediately dismissed by industry leaders. “So, what’s changed?” he asked.
I was tempted to answer “everything,” but instead – perhaps, more accurately – replied, “a lot”.
Certainly, the wider investment – and associated policy - landscape has been transformed beyond recognition over the last decade, and particularly over the last few years. Corporate purpose and performance are now being reframed by wider ESG considerations, and asset selection and investment decisions are being evaluated against ESG performance metrics. And climate change has been a primary driver of this radical shift in perspective and priorities, with the goals and targets of the Paris Agreement as key focal points.
You will doubtless have seen over the last year, month, or even day, announcements from a growing number of companies, cities, and countries publicly committing to a net zero carbon future. But how realistic and practical are these commitments, and how do they translate into demonstrable reductions in greenhouse gas (GHG) emissions?
I think there is, in some quarters, a degree of scepticism regarding the rush to net zero, even if the climate science tells it is vital. Investors, in particular, are very eager to hear more from companies and sectors regarding how they are moving beyond aspirations to implement firm actions and measure progress. Indeed, these requirements are rapidly being embedded in formal principles, guidance, and ratings.
Which brings me back to the question, have things changed in the gold mining sector and, if so, how might gold miners respond to the burgeoning requests for greater clarity on their ability and plans to contribute to emissions reduction? Our new research seeks to address at least some of these issues.