ESG metrics need reporting standard, says mining CEO

Polymetal CEO Vitaly Nesis has criticized the current methods of ESG scoring, telling the Financial Times that they are often ‘inconsistent, inaccurate and do not always reflect reality.’

According to the executive, there are many cases where investors are led to believe that a certain company is advanced in terms of ESG only to later discover that “it’s not true.”  

“In the cases where you need to measure actual relationships with the workforce or the host communities . . . rating agencies frequently lack a robust analytical framework,” Nesis told the Financial Times.

“They just tick the boxes . . . on whether there is this policy on site, or whether this is this statistic provided.”

The boss of the biggest London-listed gold producer said the ESG investment drive would “benefit hugely” from a common set of rules similar to the International Financial Reporting Standards that allow investors to compare financial statements from companies around the world.

During the last few months, Rio Tinto – which scored highly in metrics used by investors – is facing a crisis after the destruction of two ancient Aboriginal rock shelters in Australia. 

In 2018 Polymetal became the first Russian company to join the Dow Jones Sustainability Index.

Earlier this year, the company signed a refractory gold concentrate offtake agreement with Australian gold miner Blackham Resources to reduce the global environmental footprint of concentrate processing.

“We realised very early on we needed to have constructive and cordial relationships with stakeholders on the ground. Local communities are very worried about environmental issues, first and foremost water quality and availability but then also biodiversity and deforestation,” Nesis told the FT.