The responsible investment approach taken by Ethore SA in the mining sector aims to provide analysis and relevant advices to enhance investment decisions in companies that have ethical and responsible development approach and act in a proactive way in regards of sustainability aspects.
The responsibility of an investment in mining stocks may have a significant impact on the adoption of best practices and standards. We know that the mining sector is marred by severe accidents due to risk management negligence, to unsatisfactory working conditions or inadequate technical procedures. This state of business is unsustainable and we can participate to its improvement.
The raw materials extracted by mining companies feed a growing world population. The dependence on new materials and other technologies go hand in hand with the increase in purchasing power of the middle class. These extracted materials currently supporting about 45% of economic activity in the world. In addition, the modern industry requires rare and minor metals, whose concentrates’ specificities must meet very high quality standards imposed by OEM's (Original Equipment Manufacturers).
We believe ESG factors have to be implemented since the start of an exploration projet as it can impact the long-term risk and return profile of a company or a portfolios.
In order to enhance the interaction between Investors and companies, the eRR rating is completed by the transmission of a form dealing with SDG’s targets sent to companies. The question sheet collects the actions that have been taken and the assessment of these measures by management. This proactive approach aims to initiate monitoring of ESG factors within company management.
ETHORE team analyse 228 indicators, including 122 relating to ESG (Environmental, Social and Governance) criterias; where 88 risks relate to GRI (Global Reporting Initiative) and 62 to SDG (Sustainable Development Goals).
We focus on one industry: the mining industry which comprises exploration companies or Junior's. We cover these Junior's while the major's are following up by the main ESG rating agencies. To better appreciate these external ratings, a consensus analysis is required.
The eRR rating model seeks to answer four key questions about companies:
• What are the most significant ESG risks facing a company ? • How exposed is the company to those key risks ? • How well is the company managing key risks and opportunities? • How the company address and manage SDGs?
ETHORE risk analysis considers 228 indicators, including 122 relating to ESG (Environmental, Social and Governance) criterias; where 88 risks relate to GRI (Global Reporting Initiative) and 62 to SDG (Sustainable Development Goals).
Risk indicators are classified in 5 main categories or pilars (Environment; Governance; Social; Technical and Value) and 66 subcategories (ESG: 46).