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Below are my views of the various presentations heard at CIM2017 in Montreal, during the Technical session towards improving environmental social disclosure NI43-101.
Various talks, from various speakers, who shed some light on this multi-faceted theme were the trigger to this blogpost. Each one came from his or her own line of business and interest, including myself.
There was a broad consensus that risks are not only “technical” matters any more. The scope of risk has significantly broadened to cover environmental, social, governance issues, consequences impacts.
The array of stakeholders has broadened as well including shareholders, communities, society, media, regulators.
In our modern world there is an increasing variety of information pathways going from press releases to disclosure, social media and even applications like Whatsapp. Of course risk is information and information is risk as stated in the first slide of our presentation.
As a matter of fact the “information hourglass model” is still common. In that model the public is in the middle bottleneck, shareholders/interest groups and regulators are on both opposing sides. Gaps occur when we do not meet the needs of any stakeholder and related gaps create “social risks”.
Of course risk is information and information is risk. This includes a much needed discussion on ethics (geo-ethics) as there is a difference between prudent vs. dishonest withholding of information. That is especially true when early information release could create undue alarm because of high potential for misunderstandings. Many noted that in ESG disclosure laws are the lowest standard, then come ethical exigencies that require stronger criteria. Along the same lines speakers noted that respectful relationship and significant participation are key, on top of what is nowadays generally considered sufficient.
Many noted that good practice is not the industry norm also because there is a clear lack of standards relating to ESG. Defining good practice or “best practices” is indeed difficult in the present state of the art.
Many also concurred in saying that it is necessary to study and understand the needs of different stakeholders. And it is necessary to develop adaptive communication. One size does not fit all especially when the need to inform stakeholders that cannot understand is present. The same occurs when stakeholders do not have the necessary knowledge:
Yet, the incentive is there for the industry to get better. As a matter of fact reportedly 25B$ of projects stall because of social resistance.
When discussing shareholders it became apparent that the ranks of responsible investors is growing. These investors integrate ESG in selection and management of investments, want to know about exposures management. Needless to say I had the pleasure of showing how ORE allows to extract, from a single hazards-consequence-risks database all the information such an investor may need, monitor it in time and have the information available without having to “read” thousands of pages of EIA and other reports. ORE also offers the capability of comparing information among potential investments and to look at material sustainability topics.
The need to suppress the silo culture was stressed by many, especially when dealing with indigenous populations and communities which have a holistic view, making it difficult for them to focus, for example on one specific issue such as, for example, the environment. We could not agree more as Riskope has always championed this type of holistic view of risks and their consequences, talking about multi-dimensional consequence functions.
The Technical session towards improving environmental social disclosure NI43-101 discussed of course many more aspects. Those included the definition of Qualified Person, legal, etc.
My aim today was not to give a full report. I wanted to highlight themes tackled by various speakers who shed some light on this multi-faceted theme. Each one of them came from his or her own line of business and interest, including myself.
I certainly look forward to a continuing dialog. This could occur through the next Technical session towards improving environmental social disclosure NI43-101. That is if and when it will occur.