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MacCormick International Mining Consultancy | 1


MacCormick IMC is a management consultancy dedicated to social governance, assurance and

performance in the mining sector

WHO WE ARE

q Social Management Systems (SMS)

q Social Audit

q Social Reporting

q Training & Development


TOOLS, RESOURCES AND

EXPERIENCE Established in 2009


Social Responsibility Index TSX.V

OUR INDEX


TOPIC:

Social Responsibility and Mining in the current context of SRI and ESG.

A prac''oner’s perspec've on what’s missing and

how it impacts CSR on implementa'on.


SRI TRENDING GLOBAL Facts & !Figures

Principals for Responsible Investment has more than 1,000 signatory firms

with assets over 30 T - this is estimated to be 20% of total of global

capital markets Community Investing Institutions

(CIIs) is one of the fastest growing segments in SRI)

1 out of every $9 USD under professional management is invested

according to strategies of SRI Of the 3.3T in ESG Assets under

Management btw 2007-2011

1:9


GLOBAL FIGURES

Investments according to PRI (Principles of Responsible investments)

Facts & !Figures


GLOBAL :BY REGION

Global Sustainable Investing by Region (%) Relative proportion of ESG assets in total assets under management by region

Facts & !Figures


ESG Funds 1996-‐2012 in the U.S.



GLOBAL FIGURES

SRI Strategies -‐ EuropeCAGR

(2005-‐2011)Sustainability Themed Investments 38.2%Best-‐in-‐class Investments 30.3%*Norms-‐based Screening Investments 54.0%Exclusion Investments 50.0%ESG Integration in Europe 30.8%Engagement and Voting Strategies 17.8%* CAGR is for 2009-‐2011

Total Canadian assets invested according to socially responsible guidelines

Facts & !Figures


Types of Assets and Investment Vehicles incorporaMng ESG criteria in 2012

Facts & !Figures SRI TRENDING GLOBAL


SRI TRENDING GLOBAL

Trend Drivers

§  Client demand and values – cited by 72% of surveyed money managers

§  Firms that have not historically identified themselves as SRI are adopting SRI strategies in decision-making; no ‘typical’ type of firm anymore; paradigm shift

§  Increased investment tied to impact, ‘mission’; investors tying investment to environmental, social challenge reduction.

§  Emergence of specialized stock exchanges with requirement for sustainability data disclosure

§  U.S. Reporting structures: SASB (Sustainability Accounting Standards Board), shift to ‘integrated’ reporting

§  Need for comparable standards of reporting = fundamental shift in corporate reporting structure

§  Governance criteria incorporation as leading ESG issue §  Consumer demand and campaigns; this influence also

seen in a 73% increase in community development bank assets (2010 to 2012); and 54% asset growth for community development credit unions.


INDICATOR ANALYSIS Current Market Environmental Social Governance (ESG) Rating Tools *Used by Financial Institutions (FI)

Roughly 200 Indices !used to govern ESG

90% of current tools govern environmental indices' vs. social

aspects of projects

10% of current social Indicators generally rely on impact studies or

SIA (or components of ESIA) or philanthropic activity

SIA can be done desktop with high-level statistics on estimations or averages of

total population in the permit area - which does not qualify prior consent or

relationships with communities

Community involvement and consent is at the forefront of risk

mitigation in the sector

Each FI has their own custom system and set of priorities

Facts & !Figures


Types of InsMtuMonal Investors: ESG Assets 2012 in U.S.



ESG Criteria Incorporated by Institutional Investors

Social issues affect the largest proportion of ESG assets owned by the greatest number of institutional investors- with an emphasis on fair employment practice, labor policies, community issues such as microfinance, affordable housing, and economic development of disadvantaged people and places. Increasingly, shareholders are asking for sustainability reporting to include not only environmental impact, but also how firms deal with labor and community issues.

INDICATOR ANALYSIS Facts & !Figures


Leading Governance Criteria for Investment Vehicles 2012

With a total of 346 vehicles with $643 billion in assets under management- corporate governance has become an increasingly important arena of ESG investment and decision making. Most prevalent issues include: executive pay, board issues, political spend, broader corporate governance.



Leading Environmental Criteria for Investment Vehicles 2012

•  Environmental factors are among the most frequently incorporated criteria among money managers (551 funds with $240B in assets).

•  Increased prominence of environmental issues (mainly climate change and carbon emissions)

is a driver in the 23% increase in institutional asset owners in U.S. who consider ESG.



Leading Social Criteria for Investment Vehicles 2012

•  Consumer activism (social) boost deposits in community-oriented banks and credit unions. •  From 2010-12, “pronounced upward trend” in support on environmental and social issues.

In asset adjusted terms, social criteria affect more ESG assets under management by money managers than any other broad category- with over $1.2 trillion in assets.



MINING INDUSTRY SOCIAL GOVERNANCE ACTORS

Each of these actors have their own set of tools and rankings for measurement of performance and frameworks for compliance


CONCLUSION


Contact Us MacCormick IMC Toronto, CANADA

Bonnie Lyn de Bartok, CEO [email protected]

maccormickimc.com | @MacCormick_IMC

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