ESG reporting is a discipline that improves your company’s valuation and provides greater access to capital. Credible metrics play an important role in both informal and formal investor filtering processes.
ACF has created its own ESG rating system for small and mid-cap mining companies on the ASX because 1) the industry is highly scrutinised in relation to sustainability and its carbon footprint, and 2) mining is the largest contributor to the Australian economy (10.4% of GDP, 2019-2020A). The junior mining sector, in particular, is in constant need of capital by definition. We have created a simple ACF Equity Research best-in-class initial ESG filter to help showcase what the Australian mining sector is doing to begin to show it understands the challenge and opportunity.
Emission scopes are highlighted because they measure a company’s entire carbon footprint across the value chain. While it is not mandatory to report on all three scopes, doing so provides the company with an understanding of the full GHG impact of its operations and enables it to adapt accordingly to reduce its footprint. Scope reporting also shows investors that a company is willing to be fully transparent and is taking accountability for the impact of its business activities on the environment.
Definitions of emission scopes
Scope 1 – Direct emissions from the company (e.g. transportation, industrial processes, on-site manufacturing
Scope 2 – Indirect emissions from the company (e.g. emissions produced from purchased electricity, steam, heating, cooling)
Scope 3 – Indirect emissions from the value chain of the company (e.g. upstream and downstream)
*Data as of Feb 2022 and based on a sample of 100 ASX metals & mining
