The 17 Sustainable Development Goals (SDGs) represent the post-2015 global development agenda agreed by the heads of all 193 UN member-states in September 2015 to promote social and economic development among poor and rich countries. The SDGs cover all aspects of life, from environmental sustainability to human development.
Due to their global scope and ambition, the SDGs cannot be achieved without active participation of the private sector, especially the mining sector which engages in high impact operations. The UN Global Compact states that: “The SDGs hold the potential to guide companies toward long-term investments, strategic prioritisation and goal-setting. Whereas all SDGs may not be relevant to every company, there is a strong and proven business case for companies to contribute to the realisation of each SDG”.
This is especially true for the mining and metals sector. Large-scale mining is a global industry, with 6,000 companies employing 2.5 million people across the world. Mining is often located in remote and less-developed areas, where some of the biggest global companies often encounter some of the poorest communities. Studies have shown that mining is capable of infusing jobs and innovation, and bringing investment and infrastructure at a game-changing scale over long time horizons. The International Council on Mining and Metals (ICMM) states that in low- and middle-income countries, mining regularly contributes 60-90% of total foreign direct investment (FDI), 30-60% of total exports, 3-20% of government revenues, 3-10% of national income, and 1-2% of total employment.
Arguably, the products of mining are essential to all aspects of life, contributing to health and well-being in the form of corporate social responsibility (CSR). However, mining also contributes to many of the problems – such as environmental and water degradation, displacement of populations, worsening economic and social inequality, armed conflicts, gender-based violence, and increased risk for many health problems – and calls for the redirection of mining strategies to address the social and economic problems in host communities . The SDGs are at best designed to provide a consensus-based global architecture that the mining industry can use to address the emerging problems; thus aligning its actions, forming partnerships, and leading the private sector in many areas of sustainable development. This explains why mining companies are under obligation to become good corporate citizens by helping transform host communities.
The Atlas commitment
The Atlas is a collection of conceptual maps to demonstrate a positive correlation between mining and the SDGs. The maps are based on interviews of over 60 global experts from industry, civil society, governments, academia, international organisations and financial institutions, conducted between June and August 2015. The Atlas provides a framework for mining companies and other stakeholders to review current activities and strategies and their alignment with the SDGs; to support planning and resource allocation, to scope out potential investment opportunities, and to identify other opportunities for partnerships. While mining companies are the primary audience for the Atlas, multi-stakeholder partnerships are critical to the SDGs’ success.
The Atlas was developed to help the mining industry navigate where its activities – from exploration, through production and eventually mine closure – can contribute to achieving the SDGs. It is a preliminary analysis of the intersections and relationships between the mining sector and the SDGs, and aims to facilitate three things:
- Understanding of how the SDGs and mining sector relate.
- Awareness-raising of opportunities and challenges that the SDGs pose to the mining industry and its stakeholders, and how the industry might possibly address them.
- Multi-stakeholder dialogue and partnerships toward achieving the SDGs
The case studies from stakeholder engagement in various contexts illustrate how some mining companies and their development partners are already working together to promote sustainable development.
Net-zero strategy
Under the Paris Agreement, countries collectively agreed to reduce global emissions through material climate pledges. Through civil society and stakeholder activity, the global decarbonisation agenda is gathering momentum among mining industry stakeholders – including lenders, insurers, shareholders, regulators and even consumers. Indeed, net zero-strategy has become critical for every company that subscribes to the Global Compact and principle of good corporate citizenship.
For some mining companies, including Newmont Corporation, it will be easier to decarbonise because the materials they mine have a lower carbon intensity and several companies are already making public pledges of setting emission reduction targets. There has never been a better time for mining companies to respond positively by integrating climate-related risks, mitigation and adaptation measures into business strategies.
Sustainable indicators
Many sustainable development indicators (SDIs) have been defined to measure the mining industry’s progress in relation to the SDGs; however, the application of sustainability principles to mining activities remains challenging. The reason is that mining represents the act of removing and consuming limited resources, which is incompatible with the vision of sustainability. Therefore, the profit accruing from extraction needs to be reinvested in social and human well-being, and repairing environmental impacts.
The United Nations considers sustainability as the intersection of social, economic and environmental spheres – making development possible (economic-environmental), equitable (economic-social), and viable (environmental-social). Thus, it is in the interest of mining companies and host countries to minimise environmental impacts toward achieving mining sustainability. To that end, mining operations are required to avoid environmental degradation or minimise unnecessary impacts (mitigation), repairing unavoidable impacts (reclamation, rehabilitation or restoration), and offsetting unrepairable impacts (compensation).
Reporting initiative
Several organisations – such as the International Council on Mining and Metals, the UN Global Compact, the SDGs and Global Reporting Initiative – have emerged to guide the mining sector’s transition toward sustainability. Undoubtedly, these initiatives have potential to increase the benefits and competitive advantage of all enterprises that adopt the SDGs in their operations. The initiatives also highlight awareness in the mining industry that the exploitation of natural resources must not occur at the expense of environmental, social or economic intactness.
Furthermore, evaluating mining sustainability requires efficient and measurable indicators for measuring the individual economic, social and environmental performance of a mining company. It is incumbent on mining companies to provide information on how they are contributing or plan to contribute to sustainable development.
As indicated earlier, minerals are essential for society and economic development. However, the mining sector is a heavily-polluting industry: currently responsible for between 4-7% of greenhouse gas emissions (Scope 1 and Scope 2) and consuming up to 11% of global energy use.
Scientific studies are indicating that the earth is getting hotter by the year. Besides, there is now a sharper focus on environmental threats that will emerge in the next ten years, and mining industry leaders know it. For the first time in the World Economic Forum’s Global Risk Report’s history, environmental threats dominate the issues on agendas of global leaders.
Water as a casualty
The environmental impacts of mining are well-known via changes to land use, additional traffic infrastructure development and the industrialisation of remote areas. In some geographic locations, mining operations are already exposed to natural catastrophes which climate change may impact further.
It is well-documented that mining has had a major impact on water resources, sometimes depleting water supplies through high usage and – in certain instances, polluting them with discharged mine effluent and seeping from tailings or waste-rock impoundments. In fact, water has been called “mining’s most common casualty” and water availability is already less predictable in several regions.
It is estimated that by 2030 up to US$50bn of mining revenues are likely to be exposed to high levels of water-stress risk. Water-stress can impact a mining company’s business operation, revenue generation and expenditure requirements. In some regions, one of the most significant variables for mining projects is the availability of water.
Besides, Global water demand is expected to increase between 20- 30% above the current level of water use by 2050, which will further increase stress levels as the effects of climate change intensify. Therefore, adaptation plans will be crucial as the global climate trajectory evolves. The availability and management of water is therefore one of the keys to sustainable mining activity from a carbon intensity, health and environmental perspective. Mining companies are aware that unless they reduce the effects of their operations on the environment, the physical risks of climate change will impact operations, interrupt business and impact vulnerable supply chains and infrastructure.
Transition risk
As argued earlier, some mining companies are operating in host countries that have committed to carbon neutrality by 2050, as demand for minerals and metals is on the increase. The market capitalisation of the ten largest diversified mining companies is over US$350billion.
This increased demand for minerals puts pressure on creating an effective climate risk mitigation plan for the mining industry. However, investors have a growing concern over the viability of high carbon business models in an increasingly carbon-constrained world. They and other stakeholders will want to see targets set and met, along with a clear decarbonisation strategy plan. While reputational risk can be hard to quantify, adopting a carbon-reduction policy can have an enormous impact on the brand of a company and provide value for investors and consumers. A corporation can enhance its reputation through engagement with CSR because reputation is traditionally built around trust. Behaving ethically undoubtedly strengthens the relationship between a corporation and its stakeholders. Stakeholder engagements further help to strengthen the social licence to operate and make the business a valued member of the community and society.
References
Perna, FRT. 2015. Sustainable Mining – great study from the Columbia Centre for Sustainable Development
Margaret-Ann Splawn. 2020. Climate risk: transforming the mining industry
Walfir, PM et al. 2020. The sustainability index of the physical mining Environment in protected areas, Eastern Amazon
