Sustainability reports have become an essential part of the public image for companies in resource-intensive industries, like mining. For many organisations, especially smaller mining companies in the exploration phase, sustainability reporting has become the latest way to express commitment to environmental, social and governance (ESG) standards. However, after reviewing a recent sustainability report from a $1.5bn gold exploration company, it’s clear that these reports often fall short of their stated purpose, providing little of substance for investors, community leaders, or regulators.
The Problem of Sustainability Reporting: A Case Study in Intentions vs. Impact
This company’s report undoubtedly reflects considerable effort and dedication, with a clear intent to meet industry best practices. It showcases the company’s commitment to sustainability and presents the building blocks of what could become a valuable long-term strategy. Yet, despite these well-meaning efforts, the report seems to serve more as an internal marketing document than a resource for stakeholders. And this problem isn’t isolated—many smaller mining companies are producing similarly limited, non-comparable reports.
Key Issues With Sustainability Reports in Small and Mid-Sized Mining Companies
1. Lack of Standardisation
As is common in the industry, this report was individualistic, shaped entirely by the company’s own narrative and metrics, without standardised benchmarks to facilitate meaningful comparisons. Without adoption of a standardised means of disclosure each report is unique, preventing stakeholders from assessing one company against another. Investors, regulators, and community leaders are left trying to compare apples with oranges, which dilutes any meaningful insights the report could otherwise provide.
2. Vague Key Performance Indicators (KPIs)
The report referenced sustainability KPIs, yet failed to provide specifics on what these KPIs entailed or how they had been met in previous years. There was no sense of performance improvement or accountability, only abstract statements. A commitment to KPIs, without transparency into actual results or specific data, is effectively an empty promise. For stakeholders, this means there is little foundation on which to trust the company’s progress or hold it accountable.
3. Unbalanced Reporting
The report highlighted achievements but overlooked areas of struggle, risk or lessons learned. This lack of balance creates an overly positive narrative, one that reads more like a PR piece than a balanced assessment of the company’s operations. Without acknowledging challenges and areas for improvement, the report misses an opportunity to build trust through transparency—a quality that would resonate with its readership if the goal were truly stakeholder engagement.
4. Self-Marking
This report, like many in the industry, essentially “self-marks,” with the company evaluating its own sustainability progress without third-party verification or impartial oversight. This approach fails to address one of the sector’s primary issues: a lack of trust. Without an external perspective, the company misses the chance to reveal potential internal biases or adopt industry best practices that come with third-party scrutiny. By opting for self-assessment, the report closes the door on credibility, transparency and accountability—qualities that could enhance its value to stakeholders.
5. Absence of Defined Future Ambitions
A key component missing from the report was a set of specific, measurable goals and ambitions for the future. For a sustainability report to be meaningful, it must include defined targets and timelines, so stakeholders can track the company’s progress and hold its management accountable. Without these forward-looking goals, the report is simply a static document that fails to provide any actionable information for monitoring or engagement.
In addressing these issues, companies can create reports that are not just self-referential documents but genuine assets that drive transparency, trust and best practices in sustainability reporting.
Who Is This Report Really For?
Ultimately, this report seems to be intended more for the team that prepared it than for its supposed stakeholders. It’s likely to be read by only a handful of individuals and provides neither value as a tool for board-level decision-making nor as a comparative document for potential investors. In its current state, this document cannot support a more secure social license to operate, inspire confidence from investors or drive risk mitigation.
To transform the sustainability report into a valuable asset, companies must begin by asking fundamental questions: “What is the purpose of this report?” “Who is it designed for?” and “How will it create value?”
A Better Path Forward: Transparency, Accountability, and Purpose
For a sustainability report to have a meaningful impact, it must instill confidence and trust among stakeholders—whether that’s by helping to fast-track permitting, attracting investors, or strengthening community relationships. To achieve this, companies should prioritise transparency, accountability and balance. A truly effective report should:
1. Set Transparent Goals
The company should outline measurable goals across the full spectrum of sustainability, from environmental impacts and social engagement to governance standards, complete with clear timelines. By defining these goals and updating stakeholders on their progress, the report can evolve into a genuine tool for accountability.
2. Balance Achievements With Challenges
Balanced reporting includes successes and challenges. Transparency around what went wrong or what needs improvement gives the report credibility and builds trust. Only by showing a willingness to learn and adapt can the company demonstrate a genuine commitment to sustainable growth.
3. Encourage Comparability and Benchmarking
Adopting more standardised reporting frameworks would allow the company to present data in a way that is easily comparable to its peers. This would enable investors, regulators and other stakeholders to assess performance meaningfully and evaluate the company’s sustainability journey relative to others in the industry.
A Call to the Mining Industry: Time to Raise the Bar
For the mining sector, the benefits of a well-constructed sustainability report extend far beyond good public relations. Transparency and accountability can improve enterprise value by reducing risk and building confidence among stakeholders. This is an opportunity for the industry to reverse the current tide of capital away from mining, inspire investor confidence, and attract new talent to the field. Leading examples from companies like Agnico Eagle and Lundin Mining, which have achieved premium valuations, should serve as a clue to others in the industry. Their transparency, goal-setting, and balanced disclosures underscore a forward-thinking approach to sustainability, one that differentiates them and enhances their market standing.
It’s time for new leaders in the mining industry to step up and distinguish themselves by breaking from the crowd on this topic. Many companies continue to issue sustainability reports that, despite good intentions, end up destroying value through superficial or one-sided narratives. Rather than following the same well-trodden path, which has left many reports ineffective, new leaders can set a different course. By prioritizing transparent disclosure, meeting clearly defined targets, and developing sustainability strategies that are right-sized and relevant to their company’s scale, they can unlock significant benefits and drive shareholder value.
A forward-looking, authentic sustainability strategy not only benefits individual companies but also helps elevate the entire industry. By setting appropriate goals and remaining accountable to them, mining companies can raise confidence, reduce risk, and ultimately enhance the sector’s reputation and appeal to stakeholders. With thoughtful, differentiated approaches to sustainability, the mining industry can position itself as a viable and responsible sector, building long-term value for shareholders, communities, and the environment alike.
