After experiencing a surge in media coverage and private sector commitments last year, questions surrounding ESG's future have begun emerging in recent weeks. From right-wing parties' demonisation of ESG as "woke" to the backtracking of former corporate bastions such as Unilever, commentators are increasingly pointing to creeping ESG fatigue.
While the acronym has become less ubiquitous, other experts have highlighted that its underpinning values remain as relevant as ever in business decision-making, attributing its apparent loss of status to ESG's integration as a core operational component rather than explicitly cited as an external add-on.
Indeed, mining is among the sectors whose leaders increasingly understand that the movement's future lies in the willingness of companies to transcend an outdated, short-sighted view of ESG as a profit-killing "drag on business models." Driven by its most forward-thinking firms, mining will need to double down on sustainable innovations to generate broader, lasting value and catch up in the ESG space.
Mining ESG's State-of-Play
Looking back on the first phase of ESG—which is arguably drawing to a close—mining has fallen behind other industries, as rightly noted in a recent report from global consultancy Corporate Value Associates. "Alongside environmental concerns," writes Partner and co-author Ramzi Ben Hamadou, "significant governance and social challenges are yet to be overcome," a situation which "has historically impacted public support for mining projects."
Yet, despite its slow start, the Corporate Value Associates report equally projects a dramatic turnaround for the mining industry amid a flurry of ESG initiatives, inspired not only by government, investment, and public pressure but also by internal corporate conviction. Hamadou cites innovations in decarbonisation, minerals recycling, and social impact as priority ESG areas for the industry, with miners of green transition-critical minerals such as copper, cobalt, lithium, and nickel fueling hopes that mining can and will play a leading role in building a more sustainable world.
According to EY Global Mining & Metals Leader Paul Mitchell, "many miners are focused on achieving a net positive impact" in the face of significant operational challenges. While the "risks are numerous," Mitchell forecasts "more transparency...and agility" over the coming year as industry leaders "embrace the upside of change." Beyond initial ESG risk reporting and ambitious commitments, SRK Consulting ESG expert Kate Vershinina stresses that the change needed in 2024 must-see mining companies communicate broader strategies outlining "a clear path to decarbonisation."
Mining's Clean Energy Transition Accelerating
Chinese copper and cobalt mining giant CMOC is among the industry leaders that have heeded this call, joining a group of firms to help accelerate the innovations crucial to the sector's ESG comeback over the decisive years to come. Released in April, CMOC's annual report for 2023 highlights the company's approval of its first Carbon Neutral Roadmap and Action Plan, among a series of ESG enhancements.
Focused on the pillars of energy efficiency, electrification, and renewable energy to fuel its transition away from fossil fuels, the Plan includes incremental emissions reduction targets and planned investments of $1.5 billion between now and 2050 to ensure progress and delivery. Having already achieved a carbon intensity 95% below the industry average, a 41% share of renewables in its energy consumption, and an 80% usage of recycled water, CMOC is starting this Net Zero journey from a strong position.
From powering its Chinese operations with solar power and sourcing the large majority of its DRC and Brazilian mines' electricity from renewable hydropower to developing low-carbon technologies like energy-efficient electric haul trucks and automated mining machinery, CMOC's range of green interventions have contributed to its upgraded 'AA' ESG rating from MSCI last year. Keen to ensure high ESG standards across its entire supply chain, CMOC's metals trading arm IXM similarly received its first Gold rating from EcoVadis in October, positioning the company in the top 5% of global metals traders.
Fueling Decarbonisation with Next-Gen Technologies
Looking ahead, the mining industry's ESG driven-electrification will receive a major boost from next-generation technologies providing the advanced, real-time insights into energy needs and consumption key to optimising decarbonisation efforts. Chilean state copper mining company Codelco has placed itself at the industry's forefront in this space, incorporating the cloud-based data analytics of Energy Trading and Risking Management (ETRM) platforms to deliver on its ambitious ESG commitments.
Aiming to power the entirety of its operations with renewable energy by the end of the decade, Codelco's recent partnerships with providers, including Atlas, Colbún, and Innergex, have prepared the firm to source over 85% of its electricity from renewables by 2026. As part of its inspiring road to 2030, Codelco is using ETRM platforms to manage its energy infrastructure remotely, with the solution's AI/Machine Learning-powered alarms, push notifications, and automated responses sent to grid operators enabling the company to adjust its consumption to real-time conditions—even from a tablet in a neighbouring city.
Empowered by this advanced intelligence to predict its power consumption and green its operations, Codelco looks set to deliver on its bold 70% greenhouse gas emissions reduction target by 2030. What's more, savings from these tech-enabled efficiency gains will free up funds to support the company's broader ESG agenda, from its circular economy goal to recycle 65% of its waste to fueling territorial development by boosting local employment and locally-sourced goods by 60% between now and the end of the decade.
As the mining industry has increasingly proved over the past year, recent doubts over ESG's longevity are largely overblown. While the movement is undoubtedly experiencing a transition, environmental and social considerations within the private sector are only becoming more anchored with time. Moving forward, leading firms across the economy should avoid a conveniently myopic turn away from ESG and follow the mining industry's newfound leadership by recognising its long-term value and essential place in businesses fit for the challenges of the 21st century.
© 2024 NatureWorldNews.com All rights reserved. Do not reproduce without permission.
