Perhaps no topic in the corporate world today is more critical than environmental, social and governance issues. Environmental issues, commonly known as sustainability, are at the forefront; forcing both public and private companies to reassess the impact of their operations on greenhouse gas emissions, climate change and environmental sustainability in general.
Mention of corporate social responsibility in environment and sustainability often brings to mind the mining industry. Major environmental issues facing modern mining include water resources risks and impacts, air pollution, greenhouse gas emissions and climate change, acid mine-drainage, rehabilitation and growing energy needs.
The interface between business, human rights and ethics is brought into play in the extractive industry. Extractives industries’ activities involve prospecting, acquiring and processing non-regenerative resources. As such, they exclude agriculture, fishing and forestry because these can regenerate or are sustainable. Examples include coal, copper, cobalt and gold mining, stone quarrying, and oil and gas drilling. These are generally high impact industries in that they generate a lot of pollution by their nature, drilling or blasting into the earth’s crust. The inelastic demand for energy and minerals makes operators in the extractive industry more powerful and influential.
There are many examples of poor environmental performance across the world, and this drives community concerns at operational sites. Modern mining is vast in scale and complexity – but at heart it means to deplete something, yet the world continues to discover more mineral resources than ever. But the record levels of production bring to mind the concept of corporate social responsibility and accountability. Though voluntary, upholding CSR has a positive or negative impact on corporate image and long-term profitability.
Following the ‘Mining, Minerals and Sustainable Development’ (MMSD) project presented to the 2002 Earth Summit, the global mining industry changed focus to embrace sustainable development – not that a single mine is truly sustainable, but that mining can contribute to Sustainable Development Goals (SDGs).
Threats to mining
The fundamental issue in mining is not resource-depletion but the exponentially growing environmental and socio-economic risks; and energy, carbon (CO2), water, waste rock, tailings and rehabilitation considerations among others. Forecasts indicate that climate hazards such as heavy precipitation, drought and heat will get more frequent and intense, increasing the physical challenges to mining operations and communities they operate in. Therefore, the mining sector – responsible for 4 to 7 percent of greenhouse gas (GHG) emissions globally – will also face pressure from governments, investors and society to reduce emissions.
This is a timely warning that mining companies must prepare for climate hazards and potential community agitation for sustainable mining activities. Today, 30 to 50 percent of copper, gold, iron ore and zinc production is concentrated in areas where water-stress is already high. Studies have shown that climate change is expected to cause more frequent droughts and floods, altering the supply of water and disrupting operations. With the intensity of illegal mining and the resultant pollution of water-bodies, Ghana could become one of the countries with high risk of water-stress. This calls for our collective efforts to promote environmental and social governance in mining sites
More than ever, the mining industry needs to continually improve its approach and be more transparent and comprehensive in its reporting; especially in environmental monitoring, sustainability and social reporting. There is also a growing need for industry players to adopt new technologies and approaches to mining which address these key sustainability challenges, besides ensuring fulfillment of obligations to communities. This change in ‘mining philosophy’ is very important to environmental protection and climate change.
Ghana is home to some of the biggest global mining companies, such as AngloGold Ashanti and Newmont Corporation. Because these multinationals operate in Ghana, our authorities and other stakeholders must have a keen interest in whether these corporations are abiding by international best practices and have adopted all climate change and Green House Gas Protocols. It is in the interest of Ghana that Newmont Corporation, AngloGold and other multinational mining corporations in Ghana adopt all the climate change protocols, are good corporate citizens and actively promoting sustainability in all aspects of their operations.
It is expected that mining companies will act responsibly because they are part of communities in which they operate. There is an increasing demand on multinationals to promote environmental and social governance processes that engage all stakeholders. This means social and environmental governance and corporate social responsibilities activities can no longer be held as purely philanthropic, but as actually being obligatory.
Newmont Corporation appears to be gaining global recognition as a good corporate citizen, promoting environmental and social governance and accountability in countries where it operates. For the 15th year in a row, Newmont Corporation (NYSE: NEM, TSX: NGT) joins the Dow Jones SustainabilityTM World Index (DJSI World), representing the top 10% of largest 2,500 companies in the S&P Global Broad Market Index. DJSI World membership is based on long-term economic factors, as well as leading environmental, social and governance (ESG) performance evaluated through the 2022 S&P Global Corporate Sustainability Assessment (CSA).
In addition to being ranked number-one in the Metals and Mining Industry, Newmont received the top score for Governance and Environment dimensions and earned top decile performance in 23 of the 25 CSA performance categories. The ranking is based on Newmont’s performance in calendar year 2022. As of December 9, 2022, the company achieved the highest score out of 147 metals and mining companies assessed in the CSA.
“At Newmont, our unwavering commitment to leading environmental social governance (ESG) practices is woven into the fabric of our company, and is fundamental to the way in which we operate,” said Tom Palmer, president and CEO of Newmont. “We are honoured to be the metals and mining leader on the DJSI World Index, and remain focused on our purpose to create value and improve lives through sustainable and responsible mining,” he added.
In 2020, Newmont updated its Sustainability and Stakeholder Engagement Policy to further acknowledge that human activities contribute to climate change and that businesses have an important role in addressing this global challenge. The updated policy also includes support of the Paris Agreement and market-based pricing, and the corporations’ commitment to advocating its positions and objectives on climate change among the associations and organisations in which it is a member.
In its 2020 Sustainability Report, Newmont reports its commitment to attaining a more than 30 percent reduction in Scope 1 and 2 absolute emissions and intensity-based emissions (from a 2018 base year), and a 30 percent reduction in Scope 3 emissions (from a 2019 base year). The goal is for Newmont to be carbon-neutral by 2050. The new 2030 targets build on Newmont’s GHG emissions intensity reduction target of 16.5 percent over five years, which concluded in 2020 according to the Report.
Newmont set its 2030 emissions reduction targets to align with the Science Based Target initiative’s (SBTi’s) criteria, which ensures that its targets support the Paris Agreement’s goal of limiting global warming to “well below 2°C, compared to pre-industrial levels”. Thus, Newmont joined more than 1,000 global leaders committed to reducing climate change, according to its sustainability report.
“We believe our 2030 emissions reduction targets, committed investments in renewable energy and the documented pathway for achieving our objectives will drive Newmont’s low-carbon transition. We are reviewing the investment system requirements to ensure alignment with and support for achieving our targets,” says the Sustainability Report.
In the Report, Newmont further commits to integrating nature-based and other technical solutions into its adaptation plans that consider socio-environmental challenges for sites and surrounding communities – including water security, water-pollution, food security, human health, biodiversity loss and disaster risk management. “Doing so aligns with the purpose of our Global Water Strategy and contributes to our goal of no net loss of key biodiversity values,” says the Sustainability Report.
It is significant for Newmont to improve cooperation and collaboration with state actors, the media and community associations from Keyansi and Akyem to address the looming threats to sustainable mining in host communities. I have gathered that opinion leaders like Thomas Cook Williams Dankwah, the Executive Director of Hanssen Global-UK and Ghana, are working to improve community relations and development, especially at the Keyansi mines.
These efforts at the community level should be supported by all stakeholders, so that Ghana can fully benefit from gold as in the USA, Canada and Australia, where Newmont is playing a key role in economic and community development. The essence of this article is to raise the question of whether Newmont is being a good corporate citizen – as in Australia, Canada and the USA, and is making the same impact with ESG in Ghana.
Sustainability and CSR
Newmont also indicated that its investment system provides guidance for other potential climate-related risks: including land management (closure, biodiversity); water and waste management (tailings and ore composition, hazardous and non-hazardous materials); social and external relations; communications; and mine-planning, engineering and finance. According to the Report, adapting and building resilience covers redundant water supply sources; the construction and operation of water treatment plants to return water to other uses; contingency plans to manage weather-related impacts to its supply chain; and support of community development projects which include long-term resilience to climate change impacts.
Undoubtedly, these decarbonisation actions will benefit the bottom line while promoting social responsibility and brand-reputation. Reporting emissions and understanding decarbonisation pathways are the first steps toward setting targets and acting. Studies have shown several big mining companies are paying attention to sustainability issues, thus signalling that mining is joining the wave of corporate sustainability reporting and activity.
According to Tom Palmer, Newmont’s president and CEO, Newmont has become a good corporate citizen in countries like the USA, Canada and Australia by improving the way it governs its business – managing stakeholder relationships, and promoting environmental stewardship and safety practices.
Environmental stakeholders and advocates in Ghana are advocating that Newmont should adopt the same best practices in Ghana, if it is not already doing so. Newmont operates at two sites in Ghana: the Ahafo (Kenyase) and Akyem Mines. More importantly, it is in the area of prudent land and water resources management that the mining conglomerate is expected to demonstrate its corporate social responsibility to the communities where it operates. Newmont states that its Global Water Strategy underscores the importance of responsibly managing water and land resources, so as to meet current needs and protect future supply. This requires effective and innovative management approaches, as well as collaboration among communities, government, business and other key stakeholders.
Apart from effectively managing the inherent risks in its core business, it is equally significant for responsible management of resources such as land, air-quality, water and biodiversity; and protecting human health. The seriousness Newmont attaches to environmental and social governance perhaps indicates why the Board has direct oversight over its Sustainability and Stakeholder Engagement Policy. Board oversight possibly directs policy toward ensuring energy and climate strategy are integrated into its business, community development and investment decisions. There is a growing business case for corporations to avoid complicity in human rights violations, let alone indulge in them. In contemporary corporate practice, businesses are mandated to adopt the precautionary approach – which involves risk assessment, risk management and risk communication.
Newmont. 2020. Climate Change Report: Focused on Value, Driven by Purpose.