As well as in 2022, ESG remains one of the biggest challenges for the mining and metals sector.
As the issue becomes a priority for all stakeholders, the industry is adjusting to ESG factors with corporate strategies, decision-making and reports.
The difference in the long run will come to those who invest in all aspects: social, environmental and governance. The mining sector needs to go further and take a holistic view to gain the investor and community´s trust in which it operates.
Check out the main opportunities and challenges in ESG for the mining sector according to a study by Ernst & Young (EY).
76% of the respondents cited water management as the main challenge in ESG, and this result has an intense relationship with climate change and concerns about water scarcity that increase year by year.
The close relationship between organizations and government needs to be a priority for mining companies. Together, they can develop plans and initiatives that aim at care and conscious use of resource within organizations.
Circular economy is a concept that associates economic development with a better use of natural resources, through new business models and optimization in manufacturing processes with less dependence on virgin raw material, prioritizing more durable, recyclable and renewable inputs.
This concept goes beyond the scope and focus of waste and recycling management actions, aiming at a broad scope that includes from redesigning processes, products and business models, to optimizing resources use.
Traditionally, mining operations follow a linear process of searching, mining, processing and disposing. A circular economy example in this sector can be the creation of by-products from mining tailings, which can be used both in the mining sector and in other industries.
Mining companies are under increasing pressure to assess biodiversity risks in their businesses. According to EY’s research, miners will need to demonstrate that mines are considering the long-term impact on biodiversity.
In addition to avoiding negative consequences, miners must also articulate their net positive impact. An action in this case may be preserving forests in the enterprise vicinity, creating parks, zoos and social projects to preserve the local biodiversity.
Data released with credibility and clarity
Organizations around the World Report ESG information through different initiatives and programs. One of the best known and used in Brazil is GRI (Global Reporting Initiative), which enables companies of any size, sector or country to disclose their economic, environmental and social impacts, explaining how they are managed internally.
These reports purpose is ensuring quality and comparability of information that can support the stakeholders decision-making, especially investors, in targeting and allocating capital.
Around the world, regulation of carbon emissions, sustainability and social governance is increasing, and in the mining sector this is no different.
Although regulation on risk management and sustainability reporting is only starting in many countries, there is still no global regulatory standard for mandatory reporting on ESG topics, which makes it difficult to compare companies in a global investment portfolio.
To resolve this issue, IFRS Foundation Trustees formed the ISSB (International Sustainability Standards Board), which aims to develop minimum standards of information and sustainability reports to be used for decision-making in the capital market.
By complying with the new standards and expectations, the mining sector will have an obligation to improve the availability, accuracy, reliability and clarity of the data presented to all.
This is one of the great industry challenges, the management of existing assets.
A proactive approach to mine closure begins when planning is carried out since the beginning of the enterprise.
Designing a mine with closure in mind allows for continued engagement of owners, employees and communities, creating opportunities for progressive activities closure.
Mine closure impacts a wide range of stakeholders and expectations are rising about how miners mitigate these impacts, including socioeconomic effects on communities.
Improving diversity, equity and inclusion
The main problems include:
- Female participation increase: companies still struggle to attract, retain and promote women, depriving them of the spotlight as well as the proven benefits of a more gender-diverse workforce;
- Safety and support for the local community: companies need to change the way mining sites are built and operated to improve safety and support for all workers. For example, the construction of local kindergartens and schools could attract different people to mining and provide a positive contribution to the community.
- Building a brand with purpose: mining must do more to build a brand aligned with the purpose and values of the next talent generation.
Health and Safety
During the COVID-19 pandemic, many companies have boosted worker health support, but the industry still needs to do more to improve psychological health and safety.
Fly-in fly-out employees, for example, face challenges getting support, a problem that has increased with pandemic-related seclusion and isolation. Bullying and harassment are also other points that are linked to ongoing issues around a lack of diversity, inclusion and respect.
The recently published standard ISO 45003:2021 is a globally recognized framework of how to manage and protect mental well-being at work. It can be an opportunity to reform the safety culture in mining.
Another factor to consider is reintegration into the workforce. Data show that 90% of people who suffer a physical injury return to work within 90 days, but only 50% of people who took leave because of mental health problems returned after six months.
Mining and metals companies need to develop an approach to reintegrate these workers, especially when work is a causal factor behind their illness. This can include, for example, reviewing workloads, creating a support network and ensuring a mentally safe workplace. As physical injuries at work can also trigger mental health challenges, offering physical and mental health support can help employees return to work and full health.
Core Case - a company aligned with ESG pillars
Since the conception, Core Case carries with it the ESG pillars. The company was born to produce cases for survey cores storage in 100% recycled plastic. This goal was achieved and over the 12 years of history, Core Case has become a reference in Brazil.
In addition to the sustainable cases for survey testimonies, Core Case develops actions that favor the development of projects related to corporate governance, environmental and social sustainability.
Know our initiatives: ESG – Core Case.
In addition, we emphasize that the role of Brazilian mining in implementing ESG practices can contribute significantly to an increase in the sector visibility and acceptance, which, despite being so relevant, are still widely criticized by society.
Top 10 business risks and opportunities for mining and metals in 2023. Ernest & Young.
Circular economy. Available in https://www.portaldaindustria.com.br/industria-de-a-z/economia-circular/#:~:text=Economia%20circular%20%C3%A9%20um%20conceito,mais%20dur%C3%A1veis%2C%20recicl%C3%A1veis%20e%20renov%C3%A1veis.
IFRS. Available in https://www.ifrs.org/groups/international-sustainability-standards-board/.
What is ISSB. Available in https://blog.waycarbon.com/2022/09/a-criacao-do-issb-e-a-unificacao-da-estrutura-de-relato-climatico/.