The heads of mining companies named the main risks for business
Geopolitics, the environment and climate change are the top three risks their businesses will face over the next 12 months, according to the company's 2023 Mining and Metals Business Risk and Opportunity Ranking EY.
Over the past year, we have witnessed huge upheavals and changes, namely the war in Ukraine, climate events, new governments in the mining regions and changing attitudes in others - all this together has had a significant impact on the sector, ”explains Theo. Yameogo, America's leader in mining and steel.
“These external factors, combined with inflation, will continue to shift sector risks and opportunities as pressure from stakeholders and capital markets requires leaders to take responsibility on multiple fronts. Companies that can demonstrate their ability to adapt their business models for the future to better cope with disruption and changing commercial relationships will ultimately gain a competitive advantage.”
While data suggests that mining and metals companies are integrating social and ESG governance factors into corporate strategies, decision-making and reporting, survey respondents still rank ESG as the number one risk for their business, and climate change ranks third.
Respondents rated geopolitics as their second business risk - up from fourth last year, with 72% identifying resource nationalism as the top geopolitical factor that could impact their operations as governments seek to fill revenue-after-spending gaps over throughout the pandemic and benefit from higher commodity prices through new or higher mining royalties.
Respondents also cited water sustainability (76%), decarbonization (55%) and green manufacturing (35%) as top issues they thought would receive the most attention from investors.