PwC Says Higher ESG Scores Correlate with Superior
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Posted On: 08/10/2021 5:05:35 PM
PwC Says Higher ESG Scores Correlate with Superior Mining Stocks Performance
Earlier in June, Andries Rossouw of PwC Africa Mining released a statement noting that during the peak of the coronavirus pandemic, mining companies with higher environmental, social and governance (“ESG”) ratings surpassed the broader market to deliver a 34% average total shareholder return, which is 10 points higher than the general market index. Companies with higher ESG ratings are showing stronger long-term performance in market and shareholder value, as they continue to attract premiums on low-carbon inputs and benefit from capital access at lower interest rates.
This data was obtained from the annual review of the top-40 mining companies compiled by PwC, which examines the global trends in the mining industry. The review includes companies such as Gold Fields, AngloGold Ashanti, Impala Platinum, Sibanye Stillwater and Anglo American.
In the presentation, Rossouw also revealed that market capitalization rose by almost two-thirds to $1.46 trillion, while cash on hand increased by 40% and net profit in the sector grew by 15%.
Copper was found to be the exceptional performer in the metals group, as it contributed about $120 billion to group revenue. The average price of copper is expected to grow by 40% this year, based on consensus data. Additionally, the demand for iron ore is expected to grow, aided by national infrastructure initiatives whose objective is to help economies recover from the impact of the coronavirus.
Forecasts also indicate that the top-40 firms will report the second-highest net profit and record-high earnings and revenue before amortization, depreciation and taxes. This is in addition to showing that the demand for the minerals used in clean-energy technologies will increase sixfold in the next 20 years. In his conclusion, Rossouw notes that it is clear that investors focused on the sector will continue to be drawn to firms that actively embrace ESG policies.
The same can be said for tax transparency, which is an important ESG metric. It affords mining companies the chance to call attention to their significant financial contributions to their communities and the improvements in quality of life, infrastructure and education. Suppliers, governments, communities, employees and customers all expect companies to create sustainable value, which is why mining organizations should embrace tax transparency as part of their ESG strategy. This approach will help support the mining sector and encourage it to be more transparent about the rents and taxes they pay as well as the social benefits their contributions deliver.
For companies such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) that are operating in the global uranium extraction segment, adherence to ESG standards is even more important given the specialized applications in which uranium is put to use.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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 in June, Andries Rossouw of PwC Africa Mining released a statement noting that during the peak of the coronavirus pandemic, mining companies with higher environmental, social and governance (“ESG”) ratings surpassed the broader market to deliver a 34% average total shareholder return, which is 10 points higher than the general market index. Companies with higher ESG ratings are showing stronger long-term performance in market and shareholder value, as they continue to attract premiums on low-carbon inputs and benefit from capital access at lower interest rates.
This data was obtained from the annual review of the top-40 mining companies compiled by PwC, which examines the global trends in the mining industry. The review includes companies such as Gold Fields, AngloGold Ashanti, Impala Platinum, Sibanye Stillwater and Anglo American.
In the presentation, Rossouw also revealed that market capitalization rose by almost two-thirds to $1.46 trillion, while cash on hand increased by 40% and net profit in the sector grew by 15%.
Copper was found to be the exceptional performer in the metals group, as it contributed about $120 billion to group revenue. The average price of copper is expected to grow by 40% this year, based on consensus data. Additionally, the demand for iron ore is expected to grow, aided by national infrastructure initiatives whose objective is to help economies recover from the impact of the coronavirus.
Forecasts also indicate that the top-40 firms will report the second-highest net profit and record-high earnings and revenue before amortization, depreciation and taxes. This is in addition to showing that the demand for the minerals used in clean-energy technologies will increase sixfold in the next 20 years. In his conclusion, Rossouw notes that it is clear that investors focused on the sector will continue to be drawn to firms that actively embrace ESG policies.
The same can be said for tax transparency, which is an important ESG metric. It affords mining companies the chance to call attention to their significant financial contributions to their communities and the improvements in quality of life, infrastructure and education. Suppliers, governments, communities, employees and customers all expect companies to create sustainable value, which is why mining organizations should embrace tax transparency as part of their ESG strategy. This approach will help support the mining sector and encourage it to be more transparent about the rents and taxes they pay as well as the social benefits their contributions deliver.
For companies such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) that are operating in the global uranium extraction segment, adherence to ESG standards is even more important given the specialized applications in which uranium is put to use.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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
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