The ESG revolution is well underway, but investors and companies continue to grapple with how to effectively measure the ‘S’ in ESG. We know that gold mining takes place all over the world, often in remote and poorly connected locations. The potential for gold mining to have an impact on social and economic development, especially in these areas, is enormous.
Mining companies invest in local employees and businesses, support host communities and work with governments and civil society to improve transparency and the governance of natural resources. All of this can have outsized impact on local people who otherwise may have limited opportunities. But how can we capture and measure these impacts in a meaningful way, so we can share them with our stakeholders, both local and global?
Back in 2020, the World Gold Council released a series of case studies which provided qualitative evidence of how our Members contribute to advancing the UN Sustainable Development Goals. In 2021, we decided to drill down further and quantify this contribution in a report titled ‘Social and Economic Contribution of Gold Mining’. This report looked at direct payments made by mining companies in their countries of operations as a proxy for how much value is created and retained in that country.
We collected Member data on the direct in-country payments in four main categories: payments to governments (including taxes and royalties), to employees (wages and benefits), local suppliers and contractors and payments to communities. The premise is that these payments circulate in the local economy, further generating economic prosperity and wealth for local workers, business owners and communities in general.
This year we decided to repeat the core data collection exercise and produce a simplified summary report (see here). This briefing note aims to help quantify the size of the direct financial contribution of our 31 member companies in 2021. 2021 data showed that our members contributed a total of $57.5bn to local economies in which they operate. This comprised $35.4bn of payments to in country suppliers, $11.7bn in employee payments, $10.0bn in tax payments to governments and $450m in payments to communities.