Environmental, Social and Governance (ESG) in the Mining Sector – A Case in the Changing Nature of Compliance, Due Diligence and Policy Expectations

Mining is an economically profitable yet environmentally destructive and socially disruptive activity. With growing climate consciousness amongst policymakers and investors, mining companies are reinventing themselves to protect their reputations and continue securing investments from global funds. Sustainability reporting is an emerging tool to equip investors with knowledge on potential business risks. It has also become a tool for companies to express their climate-related commitments, that include reporting on emission-reduction, climate adaption efforts and its overall strategy to transition towards a green economy. The Corporate Social Reporting Directive (CSRD) 2023 (operational in 2025) has widened the scope of reporting within Europe, covering categories that conventionally fall outside the remit of most reporting frameworks. The scope of ‘impact materiality’ within the CSRD has sparked a debate, and arguably a divide, amongst those involved in sustainability reporting. Financial materiality is the information that is crucial for making decisions regarding the viability of the business amidst environmental, social and governance challenges, while impact materiality on the other hand, is about disclosing information on the company’s impacts on society and the environment. It has been emphasised in the European context given Europe’s social model of corporate regulation, contrasted by the US’ liberal-utilitarian model. This paper charts out a plethora of sustainability reporting standards, frameworks, and metrics available at the international, regional, and national levels. It explains the different approaches to materiality and what makes the CSRD unique in this context. The paper then uses mining as a case study to show how, notwithstanding the positive bearings of wider materiality approach, companies have a significant room for manoeuvre with their data collection, analyses, and reporting styles. The paper critically investigates the reporting practices of the top 20 mining companies to shed light on which reporting framework(s) they follow, how they define materiality in order to identify what constitutes a material issue and must be reported on, and what can remain confidential. The paper argues that a lot of ambiguity still exists around which specific standards must be observed, leaving sustainability impacts and goal setting to be done, measured, and documented by companies themselves.