EXPERT INSIGHT 60 WWW.LAWYER-MONTHLY.COM | JUN 2022 (SEC) introduced proposed rules for climate change disclosure requirements for both US public companies and foreign private issuers. In March 2022, the SEC proposed mandated corporate reporting on climate change by public companies. These disclosure requirements are mostly prescriptive rather than best practices and are largely based upon the TCFD reporting framework and the Greenhouse Gas Protocol. SEC filers would be required to disclose their Scope 1 and Scope 2 greenhouse gas emissions, which are those emissions that “result directly or indirectly from facilities owned or activities controlled by a registrant.” The proposals would compel issuers listed on an American stock exchange to report the entire extent of their CO2 emissions, in contrast to recent Canadian proposals by the Canadian Securities Administrators (CSA) that would permit companies to opt out of full greenhouse gas disclosure. The proposed SEC rules are expected to be finalised later this year. The United Kingdom and New Zealand are also now proposing mandatory climate-related disclosures. In what ways have “best practices” for mining disclosures changed during your career in the sector? There is a global trend to harmonise best practices in areas that affect common interest issues around the world. The relevant areas would be relating to disclosures around ESG, climate change, sustainable and responsible mining processes, inclusivity and diversity of management, transparency of ownership and transparency of indigenous consultation. Although some disclosure requirements are only best practices and voluntary in many respects, we are seeing a drive to transform these best practices into mandatory disclosure requirements in many jurisdictions. The growing awareness of factors considered by some to influence climate change has resulted in a concerted effort by lobbyists, various industry participants and NGOs to transform best practices into mandatory compliance with calls for enhanced levels of disclosures. What are the typical compliance issues that you observe regarding disclosures? By far the most common compliance issues we have observed are deficiencies in technical report content relating to estimates of mineral resource, the disclosure of estimates and a lack of compliance with Part 3 of NI 43-101 – such as omissions by the QP to describe the proposed mining methods – and failure by the QP to specify the means of verifying data. Certain other routine disclosure in websites, AIFs, news releases and other public disclosure has often failed to state both the tonnage and grades of mineral resources or mineral reserves, whether the mineral reserves were included or excluded from the mineral resource estimates or included in general risk disclosure that was not specific to the company’s mineral project. How would you advise a client to avoid compliance failures before they arise? It is necessary to seek appropriate advice from knowledgeable and experienced technical, compliance, ESG, and legal experts to avoid missteps that can be very costly and difficult to rectify if overlooked. Get to understand what disclosure is mandatory and what is voluntary. Adopt best practices where possible. Can you share anything about current legal trends that you are seeing in the mining sector? The COVID-19 pandemic has altered how we work and impacted both digitisation and the heightened need to integrate ESG commitments into corporate The need to secure new sources of materials for the energy transition amid sanctions and concerns around a possible broader European conflict has increased the tolerance for investment in perceived riskier jurisdictions in Africa.
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