ESG (environmental, social, and governance) has emerged as one of the most important acronyms in today’s business environment. While there is an understanding of what these terms mean individually, the ability to implement them in an integrated manner across the organizational footprint has been found wanting. Where no sector is feeling this pressure to change and adapt to increased environment and sustainability pressure more than mining.
Fortunately, the continent has seen virtually every mining house embedding ESG at every layer of their value chain. For this to be effective, mines need to have clear plans in place that integrate all aspects of ESG.
“The willingness to change is one thing. But when it comes to the practicalities of ESG, that is when the challenges start materialising. Mining houses must therefore have an economically-viable plan that can help transform everything from risk management and investor relations through to supply chain management, on-the-ground operations, and mine closures,” says Sean Doel, Managing Director: Environmental, WSP in Africa.
For example, while focusing on broader climate change risk mitigation measures are important, mines first need to look at things like water management and the impact on the communities in which it operates to make a demonstrable difference. By addressing things on a micro-level, the mine can better identify ways to manage scarce water and land resources while mitigating flood risks due to shifting rainfall patterns linked to climate change.
“The pressure is on mines to not only deliver on their ESG mandate while operations are running, but also if they need to shut down. Mining houses must therefore meet when stringent social and environmental objectives it comes to manage mine closures sustainably and ensure they leave communities with usable land once operations,” says Doel.
Balancing the need for local sustainability with the broader scope of delivering on strategic objectives mean mines must remain cognisant of all associated environmental issues resulting from climate change. For instance, extreme precipitation can result in flood damage to infrastructure. It can also give rise to mine waste residues, which can have significant consequences for the local communications as well as the reputation of the mining houses. All such scenarios must be accounted for in the mine planning as well as continual changes in the operating environment.
“Flowing from here, indirect impacts such as the health and safety of personnel onsite or surrounding communities, legal liability, livelihoods of dependent communities, and reputational consequences are all adding to an complex list of ESG requirements. Delivering on this while still profit managingability becomes the fundamental issue which mines across Africa must deal with,” says Ralph Heath, Managing Director: Earth & Environment, WSP in Africa.
Heath believes that because mines must have a clear understanding on health and safety, compliance and ethics, and the linkage to the mining business itself, the need to deliver on the ESG mandate becomes critical.