Jumana Saleheen, chief economist at CRU Group, also spoke about how the global COVID-19 recovery is impacting the commodities sector.
Environmental, social and governance (ESG) factors are becoming increasingly important in the mining industry, but most companies still have a lot of work to do.
Speaking to the Investing News Network, Jumana Saleheen, chief economist at CRU Group, said miners have been focusing on ESG concerns for decades, but the situation is now changing.
“I guess what’s different now in terms of the focus is that it’s become a more worldwide demonstration, if you like,” she explained in a conversation following her presentation at this year’s PDAC convention.
“So it’s not just the local community that you have to convince. You have to convince the people who buy your product, and not just the initial person you sell to, but the person that it ultimately goes to down the whole supply chain to the consumer — because the consumer wants to look at a product and say, ‘This has been made with ESG compliance throughout its value chain.'”
What does that mean for mining companies? Saleheen said that the result is that they are now having to put more effort into demonstrating their ESG compliance.
“I’m afraid they have to work much harder, and I’m afraid they have to jump through more hoops — data and data disclosure on emissions, on (the) carbon footprint of a company and across the value chain is becoming increasingly important. So I think that’s where the focus will have to be.”
Aside from ESG, Saleheen also spoke about the global recovery from COVID-19, saying that while she expects a strong rebound in global output this year, different regions are moving at different speeds — for example, China is further ahead in its recovery since it was hit with the virus first.
She also noted that many areas of the world are emphasizing a “green” recovery as they come out of the pandemic. That is likely to be beneficial for some commodities and harmful for others.
“Commodities such as copper, aluminum and nickel, which are often labeled as ‘green’ commodities, are the commodities we need to build the infrastructure that will support a low-carbon economy,” she said. Conversely, fossil fuel commodities like coal, oil and gas may fall out of favor.
Watch the interview above for more from Saleheen on how factors like COVID-19 and ESG could affect the resource sector moving forward.
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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.