ESG Insights: How to tackle ESG risks and opportunities in the Mining industry?
This is the third in our four-part series on ESG in Mining. Having explained in our first and second blogs why ESG is an important and strategic consideration for the Mining industry, this article looks at how businesses should tackle ESG risks and opportunities.
In tackling ESG risk and opportunities we would recommend the following six-step approach to any Mining business:
- Assess and screen ESG risks and opportunities across your mining portfolio or for a single site.
- Set your ESG strategy and objectives at both a board level and for your corporate executive.
- Agree and define your strategic action plan from board level through to individual sites.
- Pursue specific project interventions at each mine site that focus on your prioritised ESG issues.
- Collect and report ESG data for your investors and other key stakeholders.
- Seek certification and associated independent validation of your ESG performance.
Risk and opportunities – There are several, and arguably too many, ESG frameworks and guidelines that will influence what you want to consider across the environmental, social and governance spectrum. But its important first to understand where you stand, are clear on where you’d like to be, and determine the risk and opportunities relevant to your business in that context. No two mining ventures or operations will be the same: risks and opportunities will vary in both importance and how they can be addressed. First you need to understand what ESG means for you today, whilst being mindful of an evolving playing field.
Strategy and objectives – Having gained the insight into where you are now, you will be in a much stronger position to establish a clear pathway to achieving your strategy with objectives and priorities for the future. You will also be able to do that at an organisational level and make differentiated choices at an individual site scale. This combination, together with clear coordination and inter-dependencies will ensure your overall ESG strategy is robust, achievable and understood across your business.
Action plan – Like any strategy your ESG plan will require investment, management attention and resources. It will also drive related or affected operational activity and opportunities, so it is critical your ESG action plan is prioritised and fully integrated with operational management and delivery. To be successful you want ESG actions fully owned and integrated at a site level.
Project interventions – By integrating ESG into the way you do business, progress on your ESG strategy ultimately comes down to progress on projects. These may be company-wide or site specific, but the given the scale of mining operations, this means you need leadership and focused action to translate ideas and strategy into tangible action and positive, material impact.
Collect and report – Your ability to demonstrate progress will come down to not only project implementation but also the collection and reporting of ESG data. Your key stakeholders, particularly investors, are increasingly asking for robust data sets and benchmarking to evidence ESG performance and demonstrable progress against key performance indicators you have set.
Seek certification – One of the easiest ways to demonstrate ESG progress is to seek certification and assurance from an independent authority, be that the International Council for Mining and Metals (ICMM), Initiative for Responsible Mining Assurance (IRMA) or another third-party that applies IFC performance standards or similar frameworks. These assurance schemes provide a ‘gold standard’ by which your ESG programme can be evaluated and provide further incentive to strive for even better ESG risk and opportunity management.
In our fourth article on ESG in Mining we will outline a simple roadmap to help you identify and prioritise your ESG goals.