This month, we check back with Analyst Ekaterina Hardin, SASB’s Sector Lead for the Extractives & Minerals Processing sector, for an update on the Tailings Management project.
You recently wrapped up a public comment period for the tailings management project. What role does public comment play in SASB’s standard-setting process?
Public comment periods are a fundamental part of how we set standards. They ensure our process is inclusive and participatory, so that the Standards Board and research staff are able to consider a broad range of perspectives. They also enhance transparency around the standard setting process, so that market participants are able to clearly understand the range of views that were deliberated in shaping the Standards.
It’s also an important step in the process because it allows us to vet the thinking that comes out of earlier phases. For example, in 2020, we conducted an extensive public consultation with companies, investors and NGOs, seeking input on the most useful, cost-effective way to disclose information about how companies manage tailings storage facilities. Using this feedback, staff drafted proposed changes to the Metals & Mining and Coal Operations standards. These proposed changes were then exposed for public comment to ensure we effectively captured market input. We’re essentially saying to all interested market participants, “Here’s what you told us. Here’s what we came up with. How did we do?”
What kind of feedback were you looking for in the public comment period?
Broadly speaking, we wanted to get a sense of the overall usefulness of the proposed changes – so, for example, whether the disclosure topics are likely to have material financial implications and whether the associated metrics are appropriate. More specifically, we also asked for feedback on whether the tabular format for tailings facilities disclosure was the right choice; whether aggregating hazardous raw materials and waste related incidents is useful; and whether the proposed metrics appropriately captured key differences between industries. These were the areas where our public consultation didn’t surface as much clarity, so we had to make some judgement calls.
So, what have you heard? Do you consider the public comment period successful and were you able to resolve the open issues?
Yes, we received 15 comment letters from investors, companies and NGOs. We have also produced a summary of the responses, where you can read our analysis of the feedback. Overall, the input we received was supportive of the proposed changes; in particular, there was strong support for breaking out tailings storage facility management as a standalone disclosure topic. We were also fortunate to receive multiple comments demonstrating how some metrics, such as the tailings inventory table, could be further improved to provide a more comparable, representationally faithful and more useful disclosure. We heard mixed feedback on the question about hazardous waste and hazardous materials and received no letters from coal companies about concerns unique to their industry.
What are you going to do with this feedback? What are your next steps?
The Standards Board has reviewed the public input and discussed two themes that presented themselves very strongly in the feedback. I encourage people to view the recording of the May 5 public board meeting and read the summary of outcomes. Staff is currently drafting a final proposal taking into account the feedback we received. We are also scheduling additional follow-up with some respondents to better understand their feedback and ensure it is appropriately considered. We anticipate the second draft sometime in the summer. We will make any public announcements in the due time on the project page and you can sign up for project status alerts to make sure you don’t miss it.
We would like to thank everyone who took the time to review the exposure drafts and provide feedback. SASB Standards cannot exist without market feedback and we are very grateful we were able to have a successful public comment period.