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Leadership Insights:
Sustainable Financing, Reporting and Governance Trends

“ESG has become the platform and criteria we use to evaluate and communicate broadly about our sustainability practices, which are a business imperative and not just a nice thing to do.”

STEVE GOTTESFELD, Executive Vice President and Chief Sustainability and External Affairs Officer

Nancy Buese

NANCY BUESE
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

Steve Gottesfeld

STEVE GOTTESFELD
EXECUTIVE VICE PRESIDENT AND CHIEF SUSTAINABILITY AND EXTERNAL AFFAIRS OFFICER

Nancy Buese, Executive Vice President and Chief Financial Officer, and Steve Gottesfeld, Executive Vice President and Chief Sustainability and External Affairs Officer, examine how Newmont is aligning its finances, operations and reporting with environmental, social and governance (ESG) factors and evolving stakeholder expectations.

ESG has become very prominent in terms of how stakeholders, including investors, are factoring it into their decision making. What is the future of ESG? Is it just a new term for corporate social responsibility and, if not, how is it different and what has changed?

Steve Gottesfeld: I don’t think corporate responsibility and ESG are synonymous at all. I believe people historically saw corporate responsibility as philanthropy, volunteerism or something else off to the side of a company’s real business. Now, when people are talking about ESG, they’re talking about the importance of not just the company’s financial performance, but about all the impacts that a company can have concerning its environmental, social or governance practices and how the company actually does its work. ESG has become the platform and criteria we use to evaluate and communicate broadly about our sustainability practices, which are a business imperative and not just a nice thing to do. In essence, ESG is a more integrated and holistic perspective on a company’s performance that not only encompasses, but goes well beyond corporate responsibility.

Nancy Buese: ESG is much more expansive than corporate social responsibility and aligns the interest of shareholders and other stakeholders in a way we’ve never done historically. Guided by ESG, we care about what the company is doing, about the footprint it leaves globally and how it is discharging the responsibilities of contractors, consultants, and others it employs. ESG is a huge step forward from corporate social responsibility, and it’s becoming a much bigger filter and consideration for investors.

As C-suite executives, you are responsible for different aspects of Newmont’s strategy — one the financial stability of the company, the other, to manage impacts of the company’s operations and transparently report on performance — how does the company balance both those objectives?

Nancy Buese: In years past, we worked to balance financial performance with ESG initiatives, but now these objectives are integrated and working in tandem. For example, when we raise money in the capital markets, we now think about sustainability in sourcing our funds and integrating our long-term climate targets. We are aligning our business interests with our stated targets such as climate change, diversity goals and a myriad of other objectives. I feel we’re at a crossroads, where ESG considerations are becoming fully integrated into how we do business.

Steve Gottesfeld: I agree. There’s a visibility component to it as well. We need to see, measure and assess our impacts from a variety of stakeholder perspectives and then report on that.

If ESG enables investors and other stakeholders to take a look, understand, and engage with us on our performance, how is this company truly operating? What are its impacts and how are they being managed? What are the company’s priorities, and do they align with their values and purpose? Through this lens, we can understand the decisions the company is making to support financial resiliency as well as create sustainable value for the business and all its stakeholders.

How is Newmont using a commitment to transparent reporting to engage stakeholders and drive performance across a wide variety of metrics — financial, social, and environmental?

Nancy Buese: We’re using a much more standardized set of metrics that investors and other stakeholders across the spectrum all monitor and understand. We’re also being very transparent about topics such as: how much water do you use to produce an ounce of gold? How many dollars in taxes and royalties do you pay in this jurisdiction versus that one?

We’re putting out our first tax transparency report this year. I think in the past, there’s been a hesitancy, because we didn’t want one jurisdiction to compare notes with another such that they come to us asking for more. We have learned that the reverse is true — that providing information is useful to people, communities and institutions because they can now hold their own governments to account. What we’ve come to understand is that in every location and every community where we operate, reporting will reflect bespoke choices and a bespoke set of stakeholder interests. There was a time when we were somewhat cautious about how this level of transparency was going to work. We found in practice that transparency drives more intentional and deep conversations, and that leads to better outcomes for all parties.

In December 2021, Newmont issued the mining industry’s first ever sustainability-linked bond. Why did Newmont issue this bond? What role did reporting and governance play in making the case for the bond?

Nancy Buese: Enormous. We wanted to align our publicly stated targets and what we’ve said we’re working toward and truly putting our money where our mouth is and say, “We’re going to align our interest expense with our actions and our outcomes on our targets.” So we’ve taken our 2030 targets and our 2050 goal and worked closely with Steve’s team to develop metrics that will enable a bondholder to decide: Am I going to make money on this fund? Do I understand where the company is headed with these targets? And do I support these in my investment decisions?

Steve Gottesfeld: Sustainability performance has always been subject to accusations of greenwashing. With the question being: “Are companies just saying things because they think their investors want to hear it? Do they actually do what they say they do? Who is really working on this? Is the sustainability team the only function working on this or is the entire business aligned around the concepts of sustainability and ESG, and driving improvements?”

Well, one way to make sure you are driving the organization to deliver on its ESG practices and commitments is to visibly align the financial interests of the corporation with keeping those commitments. That’s what this bond does — it demonstrates the consistency of our commitments across the organization.

Leadership in Action:
Newmont Launches Mining Industry’s First Sustainability-Linked Bond

On December 6, 2021, Newmont became the first company in the mining sector to issue a sustainability-linked bond (SLB), with a $1 billion offering of unsecured 10-year notes redeemable in 2032. As part of the offering, Newmont receives a premium interest rate for success in achieving our targets of greater than 32 percent greenhouse gas emissions reduction for Scope 1 and 2 emissions and 30 percent for Scope 3 for 2030, as well as achieving gender parity in our senior leadership roles by 2030.

Our Sustainability-Linked Bond Framework outlines key performance Indicators for the bond along with defining a set of principles for bonds “linked to the achievement of material, quantitative, pre-determined, ambitious, regularly monitored and externally verified sustainability objectives.”

SLBs give Newmont the opportunity to raise money and build credibility with ESG-focused stakeholders by showing we are confident that we can — and will — achieve our sustainability goals. SLBs also help demonstrate that our sustainability efforts and commitments are not merely greenwashing by enabling us to tie bottom-line results and consequences to meeting those commitments.