Yesterday, the Responsible Mining Foundation released the results of its first Responsible Mining Index (RMI), adding to a long list of existing rankings and indices vying for companies’ attention. This is the first ranking created exclusively for the mining sector. The RMI has ranked the 30 biggest mining companies in the world, both state-owned and publicly listed, on their performance in meeting society’s expectations around environmental, social, economic, and governance issues. The company universe includes well-known mining giants like Anglo American, ArcelorMittal, BHP Billiton, and Rio Tinto, but also includes some less well-known names from Russia to China and India.
How much sway will these results have with investors, governments and companies themselves? It’s probably too soon to say. However the publication sends a clear message about where the Foundation believes mining companies fall short in their performance.
There is no clear ‘winner’ that comes consistently on top across all of RMI’s 6 issue areas. Anglo American ranks 1st in three issue areas, and Newmont ranks 1st in two. When it comes to working conditions, AngloGold Ashanti, Anglo American and CODELCO do best, whilst on the environment, Newmont Mining, Teck Resources, and Anglo American come out top. Many companies do well (within top 10) in a couple of categories, but only a small number of companies perform equally well across a range of important topics. For example, AngloGold Ashanti is 1st in working conditions, but is 10th in business conduct, and doesn’t make the top 10 in economic development.
This suggests that whilst mining companies may have strengthened performance and disclosure on some topics, they fall short in others. This could be due to companies’ material priorities – the unique pressures of the geographies in which they operate – or simply failure to crack disclosure on certain topics effectively. All new indices are something of a learning experience. The RMI highlights monitoring the impacts of mining on children, tracking whether community grievances are being dealt with, and checking that workers’ wages meet or exceed living wage standards as areas that particularly lack action by companies.
The RMI also highlights that whilst most companies have stated their commitment to the most critical issues in the Index, many companies were not able to demonstrate systematic approaches to working to meet these commitments. Going beyond simply stating commitment means putting in place policies, tracking performance, and tweaking practices over time to improve outcomes.
The first release is an opportunity for companies to review how their management practices stack up against those of their peers and to identify any particular weakness areas. By the time companies are invited for the second iteration of RMI, likely in the summer of 2019, we should know much more about the traction of this new Index and the value it is bringing to the mining sector. Watch this space.