While the primary extraction of certain raw materials remains necessary to support economic development, the achievement of the United Nations’ (UN’s) Sustainable Development Goals (SDGs), as well as in meeting industrial and consumer demand, a focus on how changes in climate exacerbate existing mining-related risks and impact on the environment, local communities and workers is critical.
Beyond the direct carbon footprint of mine site activity, responsible mining is considered the first link in most global value chains, with mined commodities now central to green energy.
In the context of the Paris Climate Agreement, and the central role that mined commodities play in daily life, the Responsible Mining Foundation (RMF) says it is important to fully consider the direct and indirect impacts and externalised costs of mining activities both now, and for the future.
As part of this objective, the foundation has emphasised the importance of a cleaner mining value chain, how the mining industry should better address its climate issues, the promotion of best practices, as well as how mining can become compliant with the Paris Climate Agreement, while simultaneously reducing its carbon footprint.
Taking this into account, RMF CEO Hélène Piaget during a November 10 virtual briefing referred to the foundation’s Responsible Mining Index (RMI) 2020, which covers 38 large-scale mining companies that, together, represent about 28% of the value of mining production worldwide, as well as to a range of environmental, social and governance (ESG) issues.
Among these, she highlighted climate, which she said was seen as “a transversal issue that cuts across a whole range of other issues as well”.
Piaget explained during the RMF-hosted panel on climate change and mining, that changes in climate “exacerbate other existing impacts” that arise from mining activity.
While she agreed that some of these impacts were “inevitable”, she said ESG should be “done in the most responsible way”.
She added that there were unintended consequences when a mining operation or company “hasn’t taken everything into account or hasn’t prepared for certain instances”.
Piaget lamented the “worst” impact as that of collateral damage owing to careless mining and companies not “thinking ahead”.
RMI REPORT FINDINGS
Among the key findings in the RMI report are that there are “significant gaps” remaining in terms of societal expectations, where the performances of even the best-scoring companies fall considerably short of society's expectations in all six thematic areas.
Stronger effort is required by all companies to ensure their practices are managed effectively, in light of society's expectations and the SDGs.
While there are some signs of progress, the report states that these are mostly commitments. Since the RMI Report 2018, more companies have made and disclosed formal commitments on some economic and ESG issues; however, while a few companies have developed new or stronger management standards, many “show little sign of movement”.
“Much needs to be done to translate corporate commitments and standards into successful business practices,” the report notes.
Effectiveness of these requires persistence, as most companies are still not able to demonstrate that they track and publicly report on how effectively they are managing economic and ESG issues. According to the report, even fewer companies show evidence of reviewing their performance and taking responsive actions where necessary.
There is also the risk of what the report calls “SDG-washing”, which is when companies generally omit any mention of negative impacts potentially impeding the achievement of these internationally agreed objectives.
“It is essential that an honest picture emerges of the true challenges the mining sector faces in its support of the SDGs.”
Further, mine-site data is still missing as many sites do not disclose site-level data on issues of strong public interest for communities, workers, governments or investors. Engagement with local stakeholders on economic and ESG issues are also very rarely evidenced.
In this sense, the RMI Report suggests that, to build trust with all stakeholders and reduce risks, companies will benefit from adopting responsible mine-site behaviour across operations and transparently sharing information.
However, stronger-performing and more transparent companies tend to be subject to specific requirements set by investors or producing country, or home country governments. For example, the investor-led request for disclosure of information on tailings storage facilities has generated much more publicly available data of critical interest to shareholders, debt issues, insurers and governments.
Events such as the Vale tailings disaster in Brumadinho are “harsh” reminders of the “unacceptable risks” faced by many communities, workers and environments in mining areas. The report says that such tragedies and other severe adverse impacts (including worker fatalities, or even attacks on human rights defenders) reflect “poorly” on the industry as a whole and put into stark perspective “any claims of responsible mining”.
The report therefore urges the industry to prove that it prioritises ESG risk management over short-term considerations.