As ESG investing gains traction, EY’s Jeff Swinoga believes mining companies that get in early will reap the rewards.
Environmental, social and governance (ESG) investing is quickly gaining steam, and Jeff Swinoga of EY believes it will only draw more attention in the future.
At the Prospectors & Developers Association of Canada (PDAC) convention, Swinoga, who is EY Canada’s national mining and metals co-leader, said it could become a differentiator for mining companies.
“About a year ago I heard there were going to be billions of dollars coming to ESG funds. Now I’m hearing trillions of dollars (are) coming to ESG funds. For mining companies to attract that type of capital they have to look at metrics that are important to them, look at frameworks,” he said at the show.
“My view on that — my personal opinion — is that companies that early adopt ESG policies … they’re going to attract more capital, they’re going to see a premium on their share prices.”
As mentioned, Swinoga believes this could lead to more polarization in the mining sector as it will create another lens for investors to use when examining companies. That means it’s key for companies pursuing ESG policies to make sure that the public understands what they are doing
“I think (companies) need to be more loud and proud about how they’re doing, because the mining sector is doing a lot of great things, but we’re not communicating it as well as we could.”
He also touched on the current gold price situation, saying that interest rate reductions should be beneficial for the yellow metal.
“With low rates and potentially negative rates, and especially with the situation with the virus we’re dealing with now, it just makes it more attractive for gold. Central banks are buying more gold, so we’ve seen gold move down on the back of this virus if you will, but that’s just a temporary movement.”
Watch the video above for more from Swinoga on gold, ESG in the resource sector and Canada’s attractiveness as a mining jurisdiction. You can also click here for our full PDAC playlist.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.