Improving responsible sourcing and measuring of ESG outcomes across the mining value chain will be a key focus for one panel at the upcoming International Mining and Resources Conference (IMARC) in Sydney from 2-4 November.
Mining commentator and managing director of growth strategy firm Clareo, Peter Bryant, is scheduled to address IMARC on the topic. He says while ESG has become a major focus within mining for some time, it’s remains a challenging process to implement and accurately measure such outcomes.
Commenting ahead of the conference to Mining.com.au, which is an official media partner, Bryant notes: “This is a difficult one to tackle as there is no single accepted standard – other than for the reporting of emissions – as to what should be measured to ensure the level of performance a company holds itself to. There are a multitude of standards within mining and from public markets.
“…companies need to come up with transparent, understandable, and auditable ways to measure ESG”
The manner in which ESG standards develop and evolve will be important but, in the meantime, companies need to come up with transparent, understandable, and auditable ways to measure ESG. This will not, though, resolve how someone can compare a company’s performance – hence who is a good actor versus an average one. This is an issue across all sectors. As we see in many indices, the varying aspects that you measure and weigh can alter them.”
Business as usual approach no longer sufficient
Bryant will discuss with the panel at IMARC the need for miners to move away from a “compliance and risk management only” approach.
He will also outline that while the mining industry has made progress over the past 10 years, the gap between societal expectations and progress has only widened, which is why a “business as usual” approach will no longer suffice.
“This scenario becomes more evident when we consider the energy transition and the increasing focus on environmental and social performance from downstream companies.
This scenario also begs this question: how can companies deliver an adequate, affordable, and secure supply of minerals that are extracted and processed in accordance with the ESG standards of the downstream companies like auto OEMs?
Miners must move away from a compliance and risk management only approach. Instead, they should focus on how ESG can capture value and become a competitive advantage.”
To do so, Bryant adds that there are several opportunities at hand. These include:
- Take a “clean sheet” approach by integrating ESG into the company’s overall business strategy.
- Embrace and catalyze multi-sector and multi-stakeholder dialog and collaboration as the scale of the challenge is beyond just one company or industry.
- Embrace the opportunity to be a net positive contributor economically, environmentally, and socially.
Resource famine imminent
In addition to his conference talk, Bryant predicts miners and industry players will experience an acute shortage of minerals as they continue to take part in the energy transition. He coins this impending shortage as a “resource famine” and notes several contributing factors. These include the race for renewable energy, an incomplete understanding of the mineral value chain, the lengthy timeframe to permit new resources, and the pressures to solve climate change.
“If the resource famine intensifies, companies and governments will feel the pressure to meet ESG goals”
“If the resource famine intensifies, companies and governments will feel the pressure to meet ESG goals. But it’s too early to say whether companies and governments will take shortcuts. The downstream companies are the ultimate users of materials that need responsibly sourced minerals to fulfill their ESG obligations to their customers.
Since much of this demand is from customers, the whole of value chain approach becomes even more vital. However, this will not prevent problems in regions and jurisdictions that do not have or see these obligations as important. We may have a bifurcated world which, in some ways, is already emerging in other areas.”
Currently, Bryant serves as the co-founder and board chair of the Development Partner Institute (DPI), a global organisation focused on sustainability in mining through multi-stakeholder engagement. Past and current clients include BP (NYSE:BP), BHP (ASX:BHP), and Anglo American (LSE:AAL).
He speaks on the aforementioned topics extensively at conferences and for organisations and most recently spoke at COP26, the Future Minerals Forum (FMF) 2022 in Saudi Arabia, and CERAweek 2022.
Mining.com.au is an official media partner of IMARC.
Write to Adam Orlando at Mining.com.au