By Phillipa Burmeister, partner at SRK Consulting, South Africa
Like many life-changing decisions, mine was taken on a Tuesday with only the most cursory consideration and little understanding of how it would affect my career. Rhodes University was offering a new subject, Environmental Science. To an idealistic 18-year-old it seemed interesting, new and shiny and possibly something that might be useful in the future. I couldn’t be more grateful for a seemingly innocuous decision.
Burmeister is a partner at SRK Consulting, South Africa and has over 20 years’ experience in integrated environmental management. Supplied SRK Consulting
My career started in the trenches of the Environment Conservation Act. I recall the excitement of the National Environmental Act Environmental Impact Assessment Regulations and trying to align the Mineral and Petroleum Resources Development Act to these requirements. Back then environmental management was largely compliance based and focused on achieving the requirements of authorities who were equally trying to figure out what was okay and what wasn’t. The emphasis was on reducing environmental damage. Social aspects were commonly limited to community engagement and corporate social responsibility (CSR) initiatives. There was a general feeling that there was more we should be achieving but balancing that against economic investment opportunities was a tightrope walk, where you couldn’t look back to see how far you had come, for fear of losing balance completely.
However, as awareness grew, stakeholders, including investors, communities and NGOs, demanded more transparency and accountability. The King reports and the Church of England contributed significantly to the growing awareness. Companies including mining houses began to adopt more comprehensive Environmental and Social Governance (ESG) strategies. There was a shift from environmental compliance to environmental sustainability. This shift was largely driven by the recognition that poor ESG performance could lead to reputational damage, legal challenges and financial losses. The concept of ‘a social license to operate’ was born and mining companies acknowledged they needed to build trust and maintain positive relationships with local communities and other stakeholders. Not just reducing negative impacts but also contributing to local development and respecting cultural heritage.
This momentum has grown and ESG has evolved from a peripheral concern to a core component of business strategy. Companies are now integrating ESG considerations into their decision-making processes, from exploration and project development to operations and closure. In line with the shift in thinking the Southern African Institute of Mining and Metallurgy (SAIMM) created an ESG committee and this year will offer a conference dedicated to discussing and building awareness of ESG challenges and opportunities in the mining industry.
The type of collaboration and integration planned for the conference is particularly important as many mining houses, particularly those that fund projects internally, have developed their own systems to assess ESG risk as part of project investment decision making. Lenders have also developed extensive requirements to assess ESG risks of projects before they commit to funding them. It is critical to share experiences, both successes and failures, as we move forward.
Long gone are my university days where scientific papers argued both sides of the reality of climate change. Rather, climate change, although forming part of ESG, is often listed as a significant risk to mining. Mining companies have responded by setting ambitious decarbonisation targets, acknowledging that a shift to a lower carbon economy and building resilience to extreme weather will benefit the mining industry. Reporting in terms of the Task Force on Climate-Related Financial Disclosure (TCFD)[1] or the International Financial Reporting Standards (IFRS) S2 Sustainability Disclosure Standard (June 2023) on Climate-related Disclosures once voluntarily undertaken by few is now common.
Technological advancements have and will continue to support enhancements in ESG performance. Innovations such as remote sensing and data analytics have improved environmental monitoring and reporting. I sit in wonder when I realise that a satellite can report changes in Greenhouse Gas concentrations for almost any site on the globe. Technology has enabled better communication and engagement with a wide variety of stakeholders, often from the comfort of a home office. The opportunities offered by these, and other technological advances will also be discussed at the SAIMM ESG conference and are likely to be used extensively by mining companies in the future to meet their ESG goals.
In the future stakeholders will undeniably demand more detailed and comparable ESG data and investors will increasingly consider ESG factors in their investment decisions. With ESG performance becoming a critical determinant of access to capital, I have no doubt that mining companies that demonstrate strong ESG credentials are likely to have a competitive advantage in attracting investment and market share.
Source: Supplied by SAIMM
References:
- On October 12, 2023, alongside the publication of its 2023 status report, the TCFD completed its mandate and has been dissolved. The Financial Services Board (FSB) requested the IFRS Foundation to assume responsibility for overseeing companies’ progress with climate-related disclosures. The IFRS S2 Sustainability Disclosure Standard (June 2023) on Climate-related Disclosures was therefore issued by the International Sustainability Standards Board (ISSB). The requirements of the IFRS S2 Standard are consistent with the TCFD Recommended Disclosure but IFRS S2 is part of a broader sustainability reporting framework with more detailed and integrated requirements.
| About: ESG in the Minerals Industry – Challenges and Opportunities Conference
Taking place from 16–17 October 2024 at Glenburn Lodge and Spa in Muldersdrift, Johannesburg This conference aims to shape professional behaviour and encourage industry discussions on sustainability and responsible mining by engaging discourse on ESG and Sustainability practices. Featuring keynote speakers Mzila Mthenjane, Rohitesh Dhawan, Busisipho Siyobi, Reinhardt Arp, Gordon Smith and Andrew van Zyl. Find out more: https://www.saimm.co.za/saimm-events/upcoming-events/esg-in-the-minerals-industry-challenges-and-opportunities#background |
| About Philippa Burmeister:
Principal Environmental Scientist/Partner | Pr. Sci. Nat, BSc (Hons) (Environmental Science), EAP (EAPASA), SAIMM, NACA Burmeister is a partner at SRK Consulting, South Africa and has over 20 years’ experience in integrated environmental management, that has included the use of a wide variety of environmental management tools. She has gained knowledge in a diversity of environmental aspects that enables her to identify a broad range of environmental risks and find practical solutions. Her systematic skills have been applied to the development and implementation of environmental policy and management systems based on legal and process requirements and been informed by international best practices. Most recently she has focussed attention on a specialisation in Air Quality and Climate Change specifically climate change adaptation that integrates her recent knowledge in climate projection with her long-term integration and environmental management skills. Burmeister has worked and has experience in the following countries Botswana, the Democratic Republic of Congo, Japan, Madagascar, Malawi, Mozambique, South Africa, Tanzania and Zimbabwe. |