Element Resources Fund is acutely aware of the importance of adherence to proper Environmental, Social and Governance guidelines by mining and exploration companies. Through the Fund’s due diligence and investment process the opportunity exists to guide those companies and their management to adhere to best practice.
Element is committed to integrating environmental, social and corporate governance (ESG) factors into its investment processes and ownership activities to improve long-term returns and create more sustainable businesses. Element’s approach to responsible investment incorporates governance, guidance and management.
Element integrates ESG criteria into its rigorous investment analysis which enables its investment teams to systematically identify material ESG risks and opportunities. Investment analysis is based on research and key information collected and analysed by Element.
In relation to existing investments, Element endeavours to work with management teams of portfolio companies to ensure specific ESG risks and opportunities applicable to the investment are identified and understood. Element strives to ensure that its portfolio companies are held accountable for ESG performance. Element actively monitors key ESG risks and opportunities at the Fund level and encourages its portfolio companies to do the same.
Environment and Social Principles
Element promotes business practices that respect the value of human life, evaluate and reduce workplace hazards, promote operational efficiencies, monitor and address environmental and social impacts, and meet or exceed regulatory requirements.
Element understands the inherent risks associated with mining. Element regularly reviews ESG risks and opportunities associated with mining and proactively engages its portfolio companies to ensure that strategies are in place to mitigate risks and recognise opportunities. ESG risks typical of those found in the global mining sector and mining supply chain include: risk of injury to employees and contractors, human rights, indigenous and community relations, exposure to unethically sourced materials, environmental contamination, sustainable development challenges, corruption, regulatory compliance, and risks associated with the security of personnel, intellectual property and physical assets. Element can influence an investment’s ESG management either through direct consultation, representation on a board of directors, or through the terms of its investments, recognising that the companies in which the Funds are invested are independently operated and managed. In those instances where Element has direct influence on an investment’s management, Element strives to ensure that exploration and development, mining, processing, and distribution activities are conducted in a responsible manner that promotes continuously improving business systems that extend beyond meeting regulatory requirements. Element understands the value of earning and maintaining a “social license to operate”and believes that it is a critical factor in successful project development.
Responsibilities and Reporting
Element’s investment management team report to the Environmental, Social, Safety and Governance (ESSG) Committee and maintains the Responsible Investment Policy. The Responsible Investment Officer evaluates the Policy for compliance and relevance and if appropriate, will make recommendations regarding the Policy to the ESSG Committee. The Responsible Investment Officer ensures Element incorporates the strategies and methods outlined in this Policy and the Responsible Investment Strategy into management activities and facilitates ESG-related training as necessary. The Responsible Investment Officer will annually report on ESG-related activities which include, but are not limited to,the following: ESG-related initiatives undertaken by portfolio companies, ESG training and emerging ESG-related trends.