Evolution Energy Minerals Ltd (ASX:EV1) has adopted an environmental, social and governance (ESG) framework that will steer every aspect of how it does business.
The company recognises the presence of green capital in the market and is hoping to shore it up and be ‘investment ready’ for global investment funds in the second half of 2022 when a final decision will be made on the Chilalo Graphite Project.
Evolution Energy plans to become a supplier of choice to customers who are focused on the sustainability of raw materials. The ESG framework will be designed to meet the standards of current and prospective financiers and graphite customers.
Regulatory compulsion
Regulatory changes are compelling Western graphite customers, including in the European market, to become increasingly focused on sustainable supply chains. The EU Taxonomy Regulation, for example, sets out sustainable activities aimed at assisting the EU to meet its climate and energy targets for 2030.
As Evolution Energy looks to those markets, it recognises the need to ramp up its engagement on sustainability in a genuine sense if it is to position itself as a supplier of choice into Europe.
ARCH Sustainable Resources Fund
EV1’s ESG-focused cornerstone investor, ARCH Sustainable Resources Fund, raises and invests private capital in emerging markets to deliver long-term sustainable value and brings significant ESG capability to its relationship with the company.
The investment deed between Evolution Energy and ARCH SRF caters for co-investor rights for ARCH SRF’s investors. EV1’s adoption of an ESG Framework is critical to facilitating further investment.
“The link between strong ESG practices and creating value has never been stronger,” ARCH SRF managing director Amanda van Dyke said. “We looked at the entire graphite universe and came to the conclusion that Evolution has the ability to be a truly sustainable company that will positively contribute to the global transition to net-zero.”
Independent committee, assessment and board advisory
Evolution Energy has engaged ESG consultancy, Digbee, to provide an independent third-party-validated assessment of its performance against the framework.
The company has also established an independent ESG committee to assess its ESG performance and advise the board on ESG matters.
Members of the ESG Committee include ARCH SRF’s nominee to the EV1 board of directors Amanda van Dyke, non-executive director Phil Hoskins and a yet-to-be-appointed independent ESG specialist.
The ESG Committee has teeth – in the event of a material breach of ESG standards, members of the Evolution Energy board of directors may be required to stand for re-election.
“It is imperative that we are integrating an ESG Framework into our way of thinking and how we do business," Evolution Energy executive chairman Trevor Benson said.
“We are committed to having the ESG Framework embedded across all aspects of our operations in the coming six months and consider the independent and transparent assessment of our ESG performance to be a key element of the ESG Framework as we strive to become a net-zero carbon mine producing sustainable graphite for the green economy.”