‘Conscious capitalism’: Impact investing panel debates social role of mining industry at the Global Mining Symposium

The Northern Miner kicked off its inaugural Global Mining Symposium on Tuesday, with mining leaders, influential investment professionals, and forward-thinking innovators from around the world. 

The three-day event includes panel discussions, fireside chats, and company presentations and covers the financial, technological, and operational developments that guide the global mining and mineral exploration industry through these unprecedented times. 

Anthony Vaccaro, group publisher of The Northern Miner and head of global mining for Glacier Resource Innovation Group, noted that the Global Mining Symposium will build on the success of the Canadian Mining Symposium earlier this year, which attracted over 2,000 delegates from over 80 countries and panellists from around the world.  

“We had a lot of fun at the Canadian Mining Symposium back in June,” Vaccaro said. “But the main thing was to bring to you some of the leading lights, best minds, and some great conversations that come from you, our audience.” 

Vaccaro then spoke about some of the developments in the industry since the symposium in June. 

He noted that copper prices had risen to a 26-month high to over US$3 per pound on copper for delivery in December, while gold and silver are going strong. The stock prices of nine presenting companies at the June symposium are up an average of 54%, compared with the junior gold index, which is up 28% over the same period. 

Vaccaro then highlighted some of the top performers who participated in the June event. These included Condor Gold (TSX: COG; LSE: CNR), up 40% since June, Granite Creek Copper (TSXV: GCX) up 60%, and Metallic Minerals (TSX: MMG; US-OTC: MMNGF) up 166%. 

“Let’s hope that some of the companies presenting at this edition of the Global Mining Symposium can have similar market success over the coming months,” he said. 

Vaccaro also noted that Warren Buffett, the American investor and philanthropist, and chairman and CEO of Berkshire Hathaway, had “finally got on the gold train” this summer. 

The symposium then started in earnest with the first panel discussion on the rise of impact investing and what it means for mining companies. The session was moderated by Andrew Cheatle, the non-executive director of Condor Gold (TSX: COG; LSE: CNR) and a director of Troilus Gold (TSX: TLG). 

Cheatle began the discussion by clarifying the term impact investing.    

“It’s a subject that not many of us in the mining industry are familiar with,” he said. “We sometimes think of impact investors as NGOs or environmentalists, but nothing can be further from the truth.” 

He then quoted some numbers. In 2014, approximately US$46 billion was under management at impact investment funds, a figure that has risen to US$715 billion in 2020. If you include sovereign wealth funds, he said, the figure increases to over US$2 trillion, and could rise to US$27 trillion over the next few years. 

“Today, we’ll discuss the generational shift from baby boomers to generation X to millennials and how people invest their money and what they’re looking for,” Cheatle said. 

He then introduced the panel members: Tom Butler, CEO of the International Council on Mining and Metals (ICMM); Elizabeth Freele, founder and principal at 4P Solutions; Christelle Kupa, founder and CEO of Uhusiano Capital; and George Salamis, president and CEO of Integra Resources (TSXV: ITR). 

Cheatle started by asking Tom Butler, who is a former global head of mining at the International Finance Corporation (IFC), his view on impact investments in mining. 

“We used to count ourselves as impact investors at the IFC,” Butler said. “Whenever we had to invest, we looked at both the commercial viability and what the IFC used to call ‘development impact,’ which is pretty similar to the criteria used today by impact investors.” 

He added that the sector needs to address how the industry persuades other impact investors to see things in the same way. 

Cheatle then introduced 4P Solutions’ Elizabeth Freele, who describes herself as a “conscious capitalist.” 

Freele’s work, Cheatle noted, includes supporting juniors and mid-tier producers to develop corporate responsibility and risk management approaches covering the Americas, Africa, Europe and the Middle East. 

She is also a senior associate with venture capital firm Active Impact Investments. Her work involves advancing seed-stage tech companies that demonstrate reductions in greenhouse gas emissions. 

Cheatle asked Freele to describe a ‘conscious capitalist.’ 

“A term that most people will be familiar with today is ‘stakeholder capitalism,’ which has become a popular phrase in recent years,” Freele explained. “’Conscious capitalism’ emerged a little earlier and, I believe, was coined by the founder and CEO of Whole Foods.” 

The term refers to a socially responsible, economic, and political philosophy based on the belief that businesses should operate ethically and serve all stakeholders’ interests while making a profit. 

“This is bringing about a shift from stakeholder supremacy to thinking about all the stakeholders who are impacted by the businesses’ activities,” Freele said. “And how we can service those stakeholders in an ethically, socially, and environmentally conscious way.” 

Cheatle then asked Freele about the younger generation’s attitude to investing. 

“The next generation is more diverse, and they are a lot more dissatisfied than their predecessors,” she said. “They no longer buy into shareholder supremacy but are seeking authenticity and alignment of values, are more engaged with environmental and social justice, and want a happy, healthy planet in which to start families in.” 

However, she continued, they see a “world on fire” with growing social inequality and unrest and financial systems that reward infinite resource consumption on a finite planet. 

Freele noted that companies like Tesla and Apple are raising the bar for the mining industry in terms of managing their upstream supply chains. Putting more pressure on responsible sourcing, she added, directly results from changing customer and employee expectations around sustainability performance. 

“This is the same demographic that will be controlling the capital of the future,” Freele said. “This presents a huge opportunity for impact investors and may even be a call for traditional investors to make changes if they want to secure capital in the future.” 

Cheatle then turned to Integra Resources’ George Salamis and asked him to comment on the role ESG plays in mining companies. 

“ESG is a concept that when I started in the junior mining sector didn’t really exist,” Salamis said. “It’s come a long way, but there still aren’t that many guidelines that come down to the level of juniors.” 

He noted that the juniors are taking guidelines that work for larger companies and making them fit their own needs in the absence of guidelines. 

“As the junior mining companies are the first boots on the ground, the execution of social benefit starts from the first days of exploration,” he explained. 

Cheatle then turned to Uhusiano Capital’s Christelle Kupa for her take on impact investing. 

“First, impacting investing is a for-profit business,” Kupa noted. “As a group, impacting investment attempts to make investments that make a positive social and environmental impact alongside a financial return.” 

After working in investment banking, Kupa founded Uhusiano Capital in 2016. The company acts as a catalyst for better businesses in Africa, focusing on women’s agriculture and economic empowerment. 

Cheatle asked Kupa about the absence of impact investors in the mining industry. 

Kupa said that it was difficult to see the positive impact from extracting material from the ground. 

As a junior company, Salamis noted that Integra would welcome investors asking them to show how they can positively impact the communities surrounding their projects. 

Returning the discussion to standards, Cheatle turned to ICMM’s Butler and asked how his work on performance standards for the IFC and the recently published Global Industry Standard on Tailings Management could work for juniors. 

“Before addressing that, it’s worth noting when impact investors are looking for positive impacts on the ground, they are looking for job creation — is the company thinking hard about procuring locally, or providing training for skills transfer to local people,” Butler said. 

The primary benefit that juniors can create, he added, is to make sure that they manage the ESG risks and to provide good project stewardship. 

Butler also mentioned several management standards that could be adapted for use by junior mining companies. These include the performance expectations around respecting human rights, including respecting Indigenous peoples’ rights, paying a living wage, and not using child labour. 

These are the criteria that anybody looking to acquire a junior mining company should be considering, he said. 

The conversation then shifted to transparency and the view held by many that the mining industry is opaque. 

“Mining has a legacy and is still associated today with many difficult social and environmental impacts,” Freele noted. “These include issues such as unethical practices, debt-bonded labour, water usage, health and safety risk, and human rights especially.” 

Transparency, she added, is vital for the industry and its ability to attract impact investment and believes that the demands for transparency will not go away. 

“When we avoid transparency, it sends the message that we have something to hide,” Freele said.