International ratings agency S&P Global Ratings has published its ESG credit indicators for companies in the global metals and mining sector. ALROSA’s scores are amongst the highest. These indicators are a part of a company’s credit rating assessment.
ESG credit indicators are designed to ensure additional information disclosure when assessing an issuer’s credit rating, and reflect the view of S&P’s analysts on the extent to which environmental, social and governance factors impact its credit rating. This impact is scored on a scale of 1 (positive impact) to 5 (negative impact).
ALROSA’s scores turned out to be amongst the best in the metal and mining sector:
· Environmental factors: the Company was awarded a score of 3 (moderately negative impact). The report notes, in particular, that ALROSA’s environmental risks relating to mining are “less pronounced” due to the relative simplicity and safety of the process of mining and processing diamond ore: most of the mines are open-pit and no chemicals are used in the extraction process. In addition, the Company looks better than others thanks to the high share (90% of total consumption) of renewable electricity used in its processing facilities.
· Governance factors: ALROSA scored a 3, reflecting the agency’s overall assessment of the corporate governance risks typical of companies operating in Russia.
· Social factors: ALROSA scored a 2 (neutral impact) – higher than for most similar companies. In the agency’s view, the health and safety risks typical of the extractive industry are balanced in ALROSA’s case by the company’s more substantial contribution to the regions where it operates and its considerable social spending relative to other companies in the sector.
As reported previously, in August of this year, S&P Global Ratings raised ALROSA’s stand-alone credit profile from BBB- do BBB – above sovereign. The stable outlook on this rating reflects the agency’s confidence that ALROSA’s financials will remain at a comfortably high level over the next two years, thanks, amongst other things, to the Company’s balanced financial and dividend policies at a time of stable demand and limited global diamond supply. In 2021, ALROSA also improved its score in S&P Global’s corporate sustainability assessment.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
