GLOBAL - Indian and UK-listed mining company Vedanta Resources has made only limited progress over the last year with regard to environmental, social and governance (ESG) issues, according to ESG research provider EIRIS.

The report used a red-amber-green system to measure progress and found that the company had made little progress - classed as amber - on six of the seven recommendations, with a red being applied to recommendation five on improving risk management systems.

Investors will want to assess the ongoing implementation of the commitments made by the company in its sustainability report and progress against the seven recommendations made last July, EIRIS said.

In particular, they will want to monitor how well the company implements policies and systems on linking remuneration to ESG performance, grievance mechanisms and alignment with international standards, as these are examples of areas where commitments have been made by the company, EIRIS added.

Vedanta Resources had its proposal to extract aluminium ore rejected by the Indian ministry of environment and forests in 2010 and was later instructed by the ministry to halt all construction work on the Lanjigarh alumina refinery in Orissa.

Responsible investors have been engaging with the company and some - such as the Norwegian Government Pension Fund and Dutch asset manager PGGM - have disinvested because of concerns over stakeholder-related risks.

The engagement has had some success, with Vedanta agreeing to respond to the recommendation to appoint a chief sustainability officer.

Earlier this month, it issued a new sustainable development report that outlined how it is responding to a review of its operations by consultants Scott Wilson, whose recommendations overlapped with those of EIRIS.

To help prevent the recurrence of some of the environmental and social problems that occurred in the past at Vedanta's Orissa operations, Vedanta should establish an independent expert panel assessing the impact of the Orissa plant on the environment and on human and indigenous rights, EIRIS said.

It should also commission independent environmental and human rights impact assessments of its operations in Orissa, according to the report.