Ben Peachey of the International Council on Mining & Metals discusses the importance of transp

1. Mining d
Mi i and sustainability: why
t i bilit h
transparency makes a difference
Ben Peachey / Communications Director
y
Reputation in oil gas and mining / 20 January 2011
www.icmm.com

2. Overview of presentation
p
 ICMM at a glance
t l
 Member commitments
 Public reporting and independent
assurance
 Reputational benefits of transparency
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3. ICMM at a glance
g
Global
Gl b l
CEO led 30
Association
18 member members
companies
p
Over 800 sites in
54 countries
www.icmm.com

4. Where do we come from?
4 regional reports
23 global workshops
175 research projects
50,000
50 000 people involved
www.icmm.com

5. Member commitments
10 Principles
1. Implement ethical business practices and apply good corporate governance
2. Integrate SD in corporate decision-making 3. Uphold fundamental human rights
4. Manage risks based on sound science 5/6. Improve EHS performance
7. Conserve biodiversity & participate in integrated land use planning
8.
8 Encourage life cycle approach to materials management
9. Contribute to community development
10. Publicly report, independently assure and engage openly and transparently
y p p y g g p y p y
6 Position Statements
Mining d Protected A
Mi i and P t t d Areas Mining: P t
Mi i Partnerships f Development
hi for D l t
Climate Change Mining and Indigenous Peoples
Mercury Risk Management Transparency of Mineral Revenues
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6. Delivering on the commitments
g
Robust entry criteria Clear performance Reporting... and
and process expectations redress?
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7. ICMM member performance – 2009 reports
p p
Compliant member
C li t b
Reporting/assurance commitment
companies
Policy li
P li alignment with principles
t ith i i l 15
Assurance of policy alignment 9
10 - advanced
6 - intermediate
G3 application level
1 - beginner
Total: 17
Use of GRI sector supplement 16
Assurance of G3 application level 13
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8. Multi-stakeholder initiatives
A risk assessment framework for relations between EI companies and public and
private security providers to ensure respect for human rights
Multi-
stake-
holder
initiatives Verification/publication of company payments and government revenues from EI
sector. Civil society involvement to increase government accountability
Mandatory principles, reporting and third party assurance
Industry-
led NGO calls to further toughen reporting & governance requirements
initiatives
IFC Performance standards: ‘do no harm’ social and environmental safeguards
Gov’t / European Multi- Equator principles. Financial industry benchmark for social & environmental risk
inter-
i t Stakeholder assessment and management in project fi
t d ti j t financing
i
Forum on CSR
gov’t
initiatives
Dodd-Frank Act. Reporting requirements for companies that source minerals from
US government the DRC h l h and safety performance of coal companies; di l
h DRC; health d f f f l i disclosure of payments
f
to governments

9. Why bother with assurance?
y
Company benefits
• Internal improvements Better
• Trust and credibility reputation with
stakeholders
• M
Meets requirements of SRI/SD i di
i f indices
Main benefits
• Demonstrates organisation’s commitment to SD, as basis for
better stakeholder relationships
• Increases confidence and credibility in the assured SD processes
and information
• Builds and protects market reputation through independent
confirmation of compliance to stated standards/ guidelines Better
decision-making
decision making
• Drives performance improvements and assists future strategic
decision-making
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10. Parties to assurance – company, assurance
p y
provider & intended users
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11. Do sell-side analysts give a XXXX?
y g
 Investigated overall impact of CSR
g p
strategies on securities analysts
recommendations (16yr horizon)
 Examined perceptions of analysts on
value creation (or value destruction)
potential of CSR strategies
 Initially, CSR strategies perceived as
value-destructing. Later, CSR
strengths seen as value-creating: shift
from sell to buy recommendations
 Higher ability analysts more likely to
reward CSR strengths
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12. Licence to operate
p
Rio Tinto - Madagascar
ADD Pics of each operation
Xstrata - Peru
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13. Reputational benefits
“Strongly” + “Tend to Agree ” All Stakeholders, 2007–2010
Strongly Tend Agree, Stakeholders 2007 2010
71
Moving members
Mov ing m e m be rs tow ards 2010
towards higher
highe r standards
standards 76
2007
“Major” + “Medium Contribution,” All Stakeholders, 2007–2010
67
Raising industry
g y
Raising industry sta da ds
a s g dust y standards
2010
standards 61
2007
www.globescan.com www.icmm.com

14. Transition to Sustainable Development
p
“4” + “5 (Excellent) ” All Stakeholders, 2007 2010
4 5 (Excellent), Stakeholders 2007–2010
42
ICMM member companies
38
32
Forest
21
27
Mining
22
20
Electrical utilities 2010
17
19
Packaging
14 2007
15
Chemical
16
14
Oil & Gas
18
ICMM members’ better performance is evidence that the ICMM principles and guidelines have a very positive
effect. In light of the recent oil and gas environmental disasters that have occurred (i.e., the Gulf of Mexico oil
spill), it is perhaps not surprising that stakeholders have given the oil and gas industry the lowest rating of all
industries tested.
2007 Subsample: Those who have heard of ICMM (n=623)
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15. In the end...
Better
reputation
Transparency
and
d
accountability
Better
decision-
making
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16. For further information
please contact:
l t t
Ben Peachey, Communications Director
Ben.peachey@icmm.com
www.icmm.com