Responsibility

Performance

KPI: Gender diversity

As part of our commitment to strong governance and board diversity, we have set a 2030 ambition for women to represent 40% of the Board of Directors.

Performance

KPI: Board independence

Independence at the Board level ensures effective oversight, objective judgement, and accountability. We therefore aim to maintain more than 60% independent Non-Executive Directors by 2030.

Performance

KPI: Director tenure

Maintaining an appropriate balance between continuity and renewal is central to Board effectiveness. Our 2030 ambition is to keep an average Director tenure below six years.

Risk Management

Risk Management Report findings 

A “live” risk matrix is maintained, which maps the significant risks faced by the business as well as those considered emerging risks. The matrix is reviewed and updated at each quarterly Risk Committee meeting, and the most significant current and emerging risks, as well as actions to mitigate them, are reported to the Group’s Audit Committee, and if considered appropriate, also to the Board.

Risk Management

Risk Management Report findings 

Employees working in our mines may be exposed to severe health and safety risks. Failure to manage these risks may result in occupational illness, accidents, a work slowdown, stoppage, or strike, and/or may damage our reputation and hence our ability to operate.

 

To mitigate this risk, we maintain a zero-tolerance approach to accidents, use world-class DNV safety management systems, allocate dedicated personnel to ensure the safety of employees, deliver systematic training and communication campaigns on safe working practices, and use reporting systems to track incidents and support timely preventative action.

Risk Management

Risk Management Report findings 

Hochschild may suffer from reputational and financial risk from environmental risks linked to our activities, ageing infrastructure, or potential non-compliance. These events could require corrective or remedial actions, result in fines or penalties, or lead to liability for environmental damage. 

Mitigation measures include dedicated sustainability and environment teams, robust policies and procedures, the development and use of the ECO Score tool to measure and manage performance, measures to minimise natural resource use, and a tailored tailings management framework for TSFs, including third-party reviews.

Risk Management

Risk Management Report findings 

Changes in climate and weather patterns may disrupt operations and, at worst, lead to suspension of operations. Failure to comply with climate-related regulations may also result in reputational risks, increased costs, and longer permitting delays, and a lack of climate change actions could restrict access to capital.

 

To mitigate this risk, we have set a 2030 ambition to reduce Scope 1 and 2 GHG emissions by 30% and aim to reach Net Zero by 2050. Management oversight and operating controls are enhanced to quantify and verify our carbon footprint, maximise resource and energy efficiency, increase renewable energy use, and promote transparency through participation in investor-led reporting initiatives.

Risk Management

Risk Management Report findings 

Local communities may oppose our activities at existing mines or, in the case of new projects, invoke their consultation rights. This may result in production loss, increased costs, reduced revenues, delays, additional exploration costs, and adverse impacts on obtaining relevant permits.

 

To mitigate these risks, we have a dedicated team and strategy that: 

• prioritises education, health, local infrastructure, and sustainable development;
• seeks to adopt a multi-party approach with public and private organisations and local communities; 
• incorporates local procurement and local hiring policies; and 
• engages with local governments to support public investment.

Shareholders

Our shareholders are investors and owners of the business. We seek to establish and maintain constructive relations with all shareholders through open dialogue and an ongoing programme of engagement. 

We interact with our shareholders and seek a better understanding of their expectations through various channels throughout the year, with the participation of the CEO, CFO, members of the Board, the Company Secretary, and the Head of Investor Relations. These channels take different forms and include participation at sector-specific conferences, discussions with proxy agencies, as well as direct meetings with shareholders, and through the Annual General Meeting.

Employees

We acknowledge that our success relies greatly on our people.  We seek to attract, retain, and develop our people through competitive remuneration, a positive and safe working environment, and equal opportunities for all. 

Employee engagement generally takes many forms, including the use of the Brilla HOC platform to acknowledge the achievements of our people, culture and safety perception surveys, a working climate survey, and regular meetings with labour unions.

Social

We recognise our social commitments to (a) produce the smallest environmental footprint possible and (b) understand the needs and expectations of our local communities. Through close collaboration, we implement social investment programmes in our areas of focus. 

We adopt a varied approach to engaging with local communities, including direct interaction with local mayors and residents, our Permanent Information Offices and town hall meetings, community surveys, participation in formal roundtables with regional and national authorities, collaborative events on local interest topics, and the implementation of local procurement and hiring protocols.
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Government/Regulators

It is our aim to maintain a constructive relationship and open dialogue with the various governmental authorities we interact with in each of the countries where we operate.

The Vice President of Legal & Public Affairs oversees regular engagement with relevant authorities and regulators in Peru, both at Company level and through the National Mining Association. Various teams also regularly interact with public officials and regulators as part of their operational functions. The equivalent role in our Argentinian joint venture is undertaken by the President, General Manager, and General Counsel, and in Brazil, the General Manager and General Counsel lead engagement activities with governmental authorities. The Company also actively participates in the National Mining Associations of each country in which we operate.

Suppliers and Lenders

As a key influence on how we operate our business, we seek a relationship of mutual benefit while requiring high standards of conduct. 

The General Managers of our Peruvian, Argentinian, and Brazilian operations maintain ongoing dialogue with suppliers to the mine sites. This is carried out directly and, in the case of our joint venture in Argentina, through organisations representing suppliers in the Province. Other suppliers, including lenders, are managed by the relevant functional department, such as Technology, Group Finance, etc. With regard to its existing lenders, the Company maintains an open dialogue on relevant business developments.

Customers

Due to the nature of what we produce, Hochschild has relatively few customers. As a result, successful relations with our customers are of critical importance to our business. 

Our sales and logistics teams oversee a relationship of co-operation and constant dialogue. The Company continuously seeks to establish new commercial relationships to mitigate the risk associated with a concentrated customer base and its vulnerability to geopolitical developments. In addition to usual relationship management, Hochschild attends the LME Week in London and the CESCO Week in Chile on an annual basis to engage with customers.