Fortuna Silver Mines Links 30% of Executive Bonuses to ESG Goals

Fortuna Silver Mines has released its sixth annual sustainability report, outlining its ESG performance in 2023. The report highlights significant strides made toward the company's goal of achieving a zero-harm workplace, as well as incentive compensation packages linked to ESG initiatives.

The report includes sections on Fortuna's sustainability management and initiatives at each operating mine, as well as contributions made within the countries hosting its operations. It also contains an ESG data section with disclosures under the Sustainability Accounting Standards Board (SASB) Metals and Mining Standard, the Task Force on Climate-Related Financial Disclosures Recommendations (TCFD), and the Global Reporting Initiative (GRI) standard.

Jorge Ganoza, President and CEO, Fortuna Silver Mines, highlighted the company's substantial progress in tailings management, climate change initiatives, and safety indicators in 2023. He particularly noted improved performance in Latin America and West Africa. 

In terms of governance, the report highlights that, of its directors, 63% have Safety, Sustainability, and ESG expertise. Additionally, 30% of executive short-term incentive compensation is linked to ESG performance.

Regarding Occupational Health and Safety, Fortuna reported a 0.36 Lost Time Injury Frequency Rate (LTIFR) and a 1.22 Total Recordable Incident Frequency Rate (TRIFR). Furthermore, 60% of operating mines are ISO-45001 certified, indicating a strong focus on maintaining a safe working environment for employees. “To maintain operational excellence and achieve a zero-harm workplace requires an engaged workforce undertaking the necessary precautions to foster a safety-first organization,” said Julien Baudrand, Senior Vice President of Sustainability, Fortuna Silver Mines. 

In the environmental area, Fortuna Silver reported a 17.15 Carbon Intensity, with 15% of total energy consumed being renewable. Additionally, 60% of operating mines are ISO-14001 certified, demonstrating the company's efforts to minimize its environmental footprint.

In terms of Human Resources, Human Rights, and Ethics, the report indicates that Fortuna has 5,185 full-time workers, with 15.86% female employees and 15.81% female management positions. Fortuna's contributions to Governments and Communities include paying back US$74.4 million in government contributions and allocating US$8.5 million to community development programs and funds. 

Mexican Assets 

Fortuna Silver Mines operates the San Jose Mine in Oaxaca, Mexico. The future of Fortuna Silver Mines in the region is contingent upon drilling results and political factors. Nonetheless, the company remains committed to emphasizing San Jose’s ESG performance. 

Among the most important factors is water management. Fortuna Silver noted San José Mine stands out for its environmentally conscious design. The process plant is engineered to prevent any discharge into the environment, with up to 92% of its water consumption coming from recycled water from the filter plant facility, which produces dry tailings. Additional make-up water for the treatment plant is sourced from wastewater treated at the wastewater treatment plant in the neighboring community of Ocotlan. This closed-circuit water balance not only ensures efficient water use but also eliminates potential water impacts on the local farming communities, reads the company’s report.

Over 83% of the senior management team reporting to the Country Head are women. Fortuna Silver Mines is a member of Women in Mining (WIM), with its Director of Institutional Relations and Communication in Mexico chairing the National Board of Directors of WIM. 

The company implemented several waste management improvements in 2023, resulting in 91% of urban solid waste and special handling waste being used for recycling or processing. This initiative led to a reduction in waste generation by approximately 7%. Additionally, the company began documenting and communicating fuel consumption for vehicles (diesel and gasoline) to identify areas for reducing consumption and, consequently, GHG emissions. Its solar cells were also maintained and operational, with electricity generation monitored, resulting in an annual reduction of 74.30tCO2 Eq.