Ontario has long stood out as a sustainable and relatively clean mining destination. However, maintaining this reputation will only become more challenging as sustainability credentials attract more scrutiny from investors and stakeholders. Unsurprisingly, ESG once again took the top spot on EY’s ‘Top 10 business risks and opportunities for mining and metals in 2024’, with environmental impacts standing out as a particular concern among the respondents who were surveyed for the report.

In the EY survey, tailings and waste management came in second place as the second-most scrutinized ESG factor by investors, with 55% of respondents expecting tailings to receive investor attention, compared with less than 5% the previous year. This jump was likely due to the International Council on Mining and Metals’ (ICMM) members releasing tailings disclosures to demonstrate their ongoing commitment and provide transparency on the Global Industry Standard on Tailings Management (GISTM).

The GISTM, launched in 2020, became the first mining sector global standard and a dam safety global benchmark. Mary-Jane Piggott, vice president, mining environmental group at Klohn Crippen Berger, a consultancy focused on tailing-related designs and assessments, observed that the introduction of the GISTM prompted a change in how mining companies approach tailings management: “Mining companies and consultancies are now placing more importance on creating and maintaining robust documentation and change management practices. This focus is essential for creating transparency and accountability. It allows for future reference, offering insights into why specific decisions were made and providing the basis for various design and governance choices,” shared Piggott.

Beyond non-legally binding standards like the GISTM, Ontario’s miners will likely face more stringent regulations enforced by Canadian authorities such as the Task Force on Climate-Related Financial Disclosures (TCFD). Previously a voluntary initiative, it has now been fully embraced by the International Financial Reporting Standards (IFRS). The IFRS, a mandatory global standard, finalized its rules in June 2023, and the Canadian Securities Administrators has expressed its intention for a Canadian-adapted adoption of the IFRS. “This adoption represents a seismic shift, making it mandatory for publicly traded companies to adhere to these global standards. Notably, IFRS mandates scope 1, 2, and 3 GHG reporting, although its adoption by the US and Canada is yet to be confirmed,” shared Emily Thorn Corthay, founder and CEO, Thorn Associates.

Not relying solely on the stick, Canadian authorities are also using the carrot to incentivize best practices and make the net-zero journey easier. “In general, incentive funding for mining companies has seen a significant increase, with a notable focus on proceeds from various carbon pricing initiatives,” continued Thorn Corthay.

One such example is the Green Industrial Facilities Manufacturing Program (GIFMP), a program that provides financial assistance to support the implementation of energy efficiency and energy management solutions for Canadian industries, including mining.

In addition to adopting industry initiatives and standards, Ontario’s miners are drawing upon First Nations communities for guidance when it comes to ESG. This has been evidenced in recent years, with the Marten Falls and Webequie First Nations leading environmental assessments for the Northern Road Link project, which is hoped will benefit both the First Nations residing there, as well as the prospectors seeking to tap into the rich deposits of critical minerals found in the region. In the case of the fly-in- fly-out Marten Falls community, Chief Bruce Achneepineskum hopes the Northern Road Link project will alleviate transportation costs, improve food security, and bring other benefits.

Chief Achneepineskum stressed the importance of respectful dialogue and fairness when developing on traditional lands like the Ring of Fire: “That is home for us; we do not want to see it destroyed. Through collaboration, we can find a mindful way to mine the area.”

As many of Ontario’s richest deposits lie in traditional First Nation territories, some service providers have stepped up to facilitate communications between miners and Indigenous communities. One such company is FROSKR, born in Sudbury during the Covid pandemic. FROSKR’s president, Kati McCartney, stressed the importance of acknowledging the invasive nature of mining activities and recognizing that each Indigenous community has its own priorities. “We draw inspiration from our First Nations partners, who inform decisions with the future seven generations in mind. Mining is slowly adopting this philosophy,” said McCartney.

At a time when the world desperately needs Ontario’s vast critical mineral deposits to facilitate the energy transition, some have been pushing for regulations to be relaxed to hasten the time it takes to build a mine. The rationale here is that the environmental impact of a hastily built critical mineral mine is far outweighed by the environmental benefits the mine will bring once it is in production – as the minerals mined will go on to be used in wind turbines, EVs, and the like. Louise Pearce, global mining director at ERM, the world’s largest pure-play sustainability consultancy, shared her thoughts: “Achieving a balance is crucial, understanding the needs of all stakeholders is paramount to a project’s success. Instead of trying to bypass regulations, the key is early de-risking of projects, engaging stakeholders, and integrating environmental and social considerations from the start.”

ESG is not just limited to environmental responsibility, social issues are also a crucial component, and there is a good reason both are often grouped as ‘ESG’. Diversity and inclusion comprise the central ‘S’ in ESG. There can be no successful ESG without a honed focus on these issues as well. “Statistically, diversity in C-suite positions increases operating performance and promotes creativity and resilience. Diversity is the key to disrupting sustainability, decarbonization, and safety goals,” said McCartney.

Ontario’s miners and service providers are well-positioned to take advantage of their rich history in gold mining and a rich ecosystem of environmental experts. Taking advantage of technological advancements and an improved understanding of the environment will give Ontario a chance to make its next generation of mines greener from the get-go, considering ESG at all steps of a mine’s life. “The increase in exploration activity for critical minerals has led us to reevaluate and reapply many technologies in our portfolio. We are working closely with clients to maximize resource recovery and provide solutions for a circular economy, addressing both the front-end and end-of-life aspects, including battery recycling,” shared David Oliphant, VP business development – heavy industry, Veolia Water Technologies Canada.

For miners operating in Canada, and other similarly mature mining jurisdictions, strong ESG credentials are no longer merely an extra ‘cherry on top’ for a project, but a necessity. With the impending changes in regulation and increasing investor scrutiny, there is less and less margin for error when it comes to environmental and social responsibility. “Sovereign and retirement funds are now playing a more significant role in financing mining projects, with a strong emphasis on tying capital availability to a company’s ESG performance. This shift underscores a broader trend where sustainable practices are becoming integral to securing financial support for mining endeavors,” said Theo Yameogo, EY Canada & EY Americas mining and metals leader, Ernst & Young.

Source: GBR Ontario Mining 2024