Just “do the right thing” Ross Beaty says at Remote Roundup

Mining companies must be able to “walk the talk” on Environmental, Social and Governance (ESG), mining entrepreneur and company founder Ross Beaty said during a fireside chat at the Association for Mineral Exploration’s Remote Roundup.

Beaty, chairman of Equinox Gold (TSX: EQX; NYSE: EQX) and founder and chairman of Pan American Silver (TSX: PAAS; NASDAQ: PAAS) admitted that when he set up Pan American Silver in 1994, “we didn’t even know these words.”

“At the time, nobody in the industry, including investors, cared about it,” he said. “But fast forward to today, and it’s a critical issue that comes up at every single meeting you have with investors and is often the number one topic.”

Companies have to be completely transparent as every spill or accident is “instantaneously up on the web, and so everybody knows about it,” he said, and the only way for mining companies to deal with such failures when they happen, he said, is through robust ESG programs.

Miners should ensure that they publish what they are doing through a sustainability report as Pan American currently does, he said, and as Equinox plans to do. 

“These companies are doing ESG because they have to do it and because investors now demand it,” Beaty said. “But, most importantly, they’re doing it because it’s the right thing to do.”

Whether it’s called ESG or “social licence,” he continued, “what they all mean is doing the right thing, and that’s not rocket science. It’s really pretty basic.” 

“It means looking after your workforce, by making sure they go home every day healthy; it means looking after your communities, the people who drive your business, which includes employees, the service providers, and contractors. It means working with them to build value for the long-term; and it means looking after the countries you operate in by working with the national governments and paying responsible amounts of taxes and royalties,” he said.

Mines, Beaty said, are engines of value for the countries in which they operate and in the local communities where they can provide employment, generate wealth, and improve the standard of living.

“A good mine, well run for a long time, will create a massive amount of value for a community,” he said. “Modern mine management and the companies that do it well, the ones that look at all the issues around ESG, they will make more money. It’s a straight line to the bottom line.”

Those companies that look after their workers, that don’t get fined or lose productivity because of accidents, that look after their communities and don’t have roadblocks, and the strife, and chaos that come with them, it’s these companies, he emphasized, that won’t experience slowdowns, which directly impact the bottom line.

Beatty noted that well-governed companies that are more inclusive and have greater diversity and take care of their employees, communities, and the environment around them, have superior financial performance.

“Generally speaking, the public companies that are vetted every day by international investors have to follow one standard, and they do a pretty good job,” he said.

For companies operating in less developed countries, where governments often don’t have the enforcement capacity or the resources to ensure that mines and mining projects are operating under good governance regimes, and often don’t have such practices themselves, it’s up to the mining company to make sure they get it right.

“In these circumstances, companies have to rise above the local standards in those countries and operate using one standard that is world-class,” he said. “There is only one way that an exploration or mining company should operate today, no matter where they operate, and that is to operate with the very highest standards of ESG and sustainability in mind.”