Investors Turning Their Backs on Mining Firms with Questionable Human Rights Records
Earlier this year, the Capital Markets Modernization Taskforce in the Ontario government gave a few recommendations for improving Ontario’s investment environment. In part, the body advocated for compulsory climate change-related disclosure and recognized that Environmental, Social and Governance standards played a huge role in the market and could impact a company’s financial performance. However, the body proposed a reporting standard that did not account for the social effects and risks of investing and failed to address Indigenous concerns and human rights.
Conversely, the internationally recognized UN Guiding Principles Reporting Framework requires that firms disclose any human rights issues.
Prior to this, the Justice and Corporate Accountability Project (“JCAP”) had made six complaints to security regulators in Canada about failures to consult Indigenous communities and human rights abuses and pursued the outcomes.
Research conducted by JCAP found that disclosure mattered to investors. The organization discovered that failures to consult Indigenous communities and violations of human rights affected a company’s share prices. The group also found that once any complaints by the body were made public, a decline of share prices, which ranged from 11% to 22%, followed. JCAP also found that investors considered any conflict with local communities a risk to their investment and preferred those conflicts to be disclosed.
An example of this happening in the real world would be Tahoe Resources’ failure to disclose key information about social conflicts. After news about the company’s failure to disclose the opposition it faced from Indigenous communities was publicized, a few class-action lawsuits were launched against the company, paid for by funds that had invested in the mining company divesting from the mining company on account of the human rights concerns.
While the six complaints filed by the JCAP are only part of a small sample, the impact of social conflicts on a company’s share prices can be established by a larger study that focused on the assassinations of 354 civil society activists who were linked to mining projects over the past two decades.
The study found that investors reacted negatively to any assassination event, adding that the market capitalization suffered a cumulative median loss of over $100 million in the 10 days after an assassination.
A lot of research conducted suggests that investors do care about consultation with Indigenous communities and how human rights are affected. Investors consider these factors important to the value of their investments, and for investors to make informed decisions on their investments, they need full disclosure of information.
It is therefore imperative that mining firms pay extreme attention to these issues if their projects are to enjoy sustained investor interest.
In addition to respecting human rights, investors are attracted to mining companies with steady growth in their production and revenues. One such company is Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2). The company has projects in Idaho, Mexico and Germany. All indicators point to the possibility of high yields and production potential over a long term.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Earlier this year, the Capital Markets Modernization Taskforce in the Ontario government gave a few recommendations for improving Ontario’s investment environment. In part, the body advocated for compulsory climate change-related disclosure and recognized that Environmental, Social and Governance standards played a huge role in the market and could impact a company’s financial performance. However, the body proposed a reporting standard that did not account for the social effects and risks of investing and failed to address Indigenous concerns and human rights.
Conversely, the internationally recognized UN Guiding Principles Reporting Framework requires that firms disclose any human rights issues.
Prior to this, the Justice and Corporate Accountability Project (“JCAP”) had made six complaints to security regulators in Canada about failures to consult Indigenous communities and human rights abuses and pursued the outcomes.
Research conducted by JCAP found that disclosure mattered to investors. The organization discovered that failures to consult Indigenous communities and violations of human rights affected a company’s share prices. The group also found that once any complaints by the body were made public, a decline of share prices, which ranged from 11% to 22%, followed. JCAP also found that investors considered any conflict with local communities a risk to their investment and preferred those conflicts to be disclosed.
An example of this happening in the real world would be Tahoe Resources’ failure to disclose key information about social conflicts. After news about the company’s failure to disclose the opposition it faced from Indigenous communities was publicized, a few class-action lawsuits were launched against the company, paid for by funds that had invested in the mining company divesting from the mining company on account of the human rights concerns.
While the six complaints filed by the JCAP are only part of a small sample, the impact of social conflicts on a company’s share prices can be established by a larger study that focused on the assassinations of 354 civil society activists who were linked to mining projects over the past two decades.
The study found that investors reacted negatively to any assassination event, adding that the market capitalization suffered a cumulative median loss of over $100 million in the 10 days after an assassination.
A lot of research conducted suggests that investors do care about consultation with Indigenous communities and how human rights are affected. Investors consider these factors important to the value of their investments, and for investors to make informed decisions on their investments, they need full disclosure of information.
It is therefore imperative that mining firms pay extreme attention to these issues if their projects are to enjoy sustained investor interest.
In addition to respecting human rights, investors are attracted to mining companies with steady growth in their production and revenues. One such company is Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2). The company has projects in Idaho, Mexico and Germany. All indicators point to the possibility of high yields and production potential over a long term.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
