Exposure Preparedness Investment Risk

Report
Australian Extractive Companies in Asia
Loic Dujardin
Director, Research Products, Singapore
Australia, September 2013
Discussion points
Sustainalytics in Asia
Australian Extractive Companies in Asia
Covering Asia
Exposure | Preparedness | Investment Risk
Regulatory gaps | Information channels
Businesses in Asia | Asian businesses
What does China’s Leadership
Transition Mean for ESG?
October 2012
July 2013
Australian Extractive Companies in Asia
Companies reviewed
Company Name
Sector
Sub-Industry
Market cap. (mln. USD)
BHP Billiton Ltd.
Materials
Diversified Metals & Mining
168,180
Rio Tinto Ltd.
Materials
Diversified Metals & Mining
95,764
Origin Energy Ltd.
Energy
Integrated Oil & Gas
13,659
Newcrest Mining Ltd.
Materials
Gold
8,510
PanAust Limited
Materials
Diversified Metals & Mining
1,309
Linc Energy Ltd.
Energy
Oil & Gas Exploration & Production 575
OceanaGold Corporation
Materials
Gold
455
Medusa Mining Limited
Materials
Gold
352
ST Barbara Ltd.
Materials
Gold
313
Kingsgate Consolidated Ltd
Materials
Gold
239
Intrepid Mines Limited
Materials
Gold
149
Four ESG Risk Factors – One Investment Risk Indicator
Health & Safety
Strikes, Government
investigations, Reputation
Community Relations
Reputation and Regulatory
Impact
Investment Risk
Water
Production disruption,
Regulatory & Reputation
Impacts
Corruption
Reputation, Legal,
Regulatory Impacts
Water: one example
Exposure
Exposure
Preparedness
Preparedness
Track record Risk
Investment
Exp.
100
Sustainalytics Indicator:
Programs & Targets
to Reduce Water Use
75
50
25
25
Source: WRI Aqueduct
Score: 100
Score: 0
50
75
100
Prep.
Investment Risk: Very High
Water: Results
WATER
EXPOSURE
SCORE
PREPAREDNESS
SCORE
WATER SPECIFIC
INVESTMENT RISK
LEVEL
WATER SPECIFIC
INVESTMENT RISK
SCORE
100
75
HIGH
3
Rio Tinto Ltd.
67
75
MODERATE
2
Origin Energy Ltd.
50
0
HIGH
3
Newcrest Mining Ltd.
56
50
HIGH
3
PanAust Limited
57
75
MODERATE
2
Linc Energy Ltd.
80
25
HIGH
3
OceanaGold Corporation
80
25
VERY HIGH
4
Medusa Mining Limited
40
0
HIGH
3
ST Barbara Ltd.
80
50
VERY HIGH
4
Kingsgate Consolidated
40
25
HIGH
3
100
0
VERY HIGH
4
BHP Billiton Ltd.
Intrepid Mines Limited
Corruption: one example
Exposure
Exposure
Preparedness
Preparedness
Track record Risk
Investment
Exp.
Source: Transparency International
Score: 68
Sustainalytics Indicators:
• Whistleblower
Programs
• Business Ethics Related
Controversies or
Incidents
• Transparency on
Payments to Host
Governments
Score: 67
100
75
50
25
25
50
75
100
Prep.
Investment Risk: Moderate
Corruption: Results
CORRUPTION
EXPOSURE
SCORE
BHP Billiton Ltd.
Rio Tinto Ltd.
Origin Energy Ltd.
Newcrest Mining Ltd.
PanAust Limited
Linc Energy Ltd.
OceanaGold Corporation
Medusa Mining Limited
ST Barbara Ltd.
Kingsgate Consolidated
Intrepid Mines Limited
PREPAREDNESS
SCORE
73
66
66
68
79
76
66
66
75
67
68
93
93
42
50
42
42
50
42
42
42
67
CORRUPTION
INVESTMENT RISK
LEVEL
MODERATE
MODERATE
HIGH
MODERATE
VERY HIGH
VERY HIGH
HIGH
HIGH
HIGH
HIGH
MODERATE
CORRUPTION
INVESTMENT RISK
SCORE
2
2
3
2
4
4
3
3
3
3
2
Main Findings
• Overall investment risks are fairly consistent across the companies.
Company Name
Sub-Industry
Market cap. (year
end, mln. USD)
Overall Investment
Risk Score
Overall Investment
Risk Level
Rio Tinto Ltd.
Diversified Metals & Mining
95,764
1.8
Low to Moderate
BHP Billiton Ltd.
Diversified Metals & Mining
168,180
2.0
Moderate
PanAust Limited
Diversified Metals & Mining
1,309
2.0
Moderate
Medusa Mining Limited
Gold
352
2.0
Moderate
OceanaGold Corporation Gold
455
2.3
Moderate to High
Kingsgate Consolidated Gold
Limited
Newcrest Mining Ltd.
Gold
239
2.3
Moderate to High
8,510
2.3
Moderate to High
Intrepid Mines Limited
Gold
149
2.3
Moderate to High
ST Barbara Ltd.
Gold
313
2.5
Moderate to High
Origin Energy Ltd.
Integrated Oil & Gas
13,659
2.5
Moderate to High
Linc Energy Ltd.
Oil & Gas Exploration &
Production
575
2.5
Moderate to High
Main Findings
• Risk Factor contributions vary significantly
• Water, Corruption, H&S contributions are high. Community relations is low.
34
Community Relations
30.8
Investment Risk
Health & Safety
19.8
Corruption
15.4
0%
Water
20%
40%
60%
80%
100%
Recommendations to Investors
Water
•
Exposure scores are systematically above
the Preparedness scores, except for Rio
and PanAust
•
Disclose operations located in waterstressed areas and where local
populations lack access to clean water
•
Companies need to improve their water
management plans
•
Disclose an assessment of the impact of
water withdrawal and wastewater
discharges on local communities and
ecosystems
•
Disclose site-specific water management
plan
•
Request companies to publicly support
the EITI
Corruption
•
Exposure scores are systematically above
the Preparedness scores, except for Rio
and BHP
•
Companies
should
engage
governments on corruption
with
Thank You!
For more information please contact:
Loic Dujardin
Director, Research Products
Phone: +65 3158 5049
Email: [email protected]
Website: www.sustainalytics.com
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Disclaimer
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