Risk Radar Highlights: Multiple Relevant Factors to Consider

The sector has a relatively high number of ESG factors to consider, many with anestimated high or very high potential impact including resource nationalism, regulationsand permitting, energy security, capital allocation and catastrophic events. In the nearterm we think resource nationalism, human capital (strikes) and accidents are the keyrisks faced by Americas miners. In our view, the rise in commodity prices over the lasttwo years increases the risk of poor capital allocation in the coming two to five years.

An ESG Group Three (“Potential Externalities”) Sector

Extractive activities in the sector generate significant CO2 emissions, and are bothwater and energy intensive. The risk of resource nationalism is materially higher indeveloping markets within the sector. Sector-specific operating risk is high.