The adoption of Environmental, Social and Governance (ESG) principles has increased greatly in the recent years, with more organizations being called to strengthen their commitment to sustainability. Last month, Dean Slocum, founder of Acorn International LLC, and Chris Anderson, a strategic partner at the firm, provided ESG risk management advice for industrial and extractive sectors globally.
Acorn International LLC is mainly focused on capacity building, due diligence, environmental and social studies, and stakeholder engagement.
Slocum gave the example of the Grasberg operation, explaining that while the mine was operationally successful, societal risks were harder to handle. Grasberg, which has been in operation since the 1960s, has faced challenges such as tailings issues, remoteness and difficult terrain among others, which has seen separatist groups campaign for its independence for decades.
Anderson, who has been in the industry for almost two decades, discussed how changes to the makeup of the industry would greatly benefit the sector. For instance, he noted that, unlike in the past when men occupied most positions, women are taking up more space in the industry. Anderson believes this is a major change marker that is pushing an alternative approach at the highest level.
Anderson also acknowledged that ESG was business imperative and not an issue that could be overlooked, especially now that nothing mining companies did was out of observation and reach anymore.
The role investments from China played in the mining sector, particularly in Africa, was also discussed. The DRC is currently revisiting some of the deals made with Chinese companies, given that Chinese investors often get away with safety, environmental and other breaches. The company involved in the Tenke Fungurume copper and cobalt mine has already had its export license suspended as a result of this review.
It is also expected that growth driven by increased demand as a result of the global energy transition will increase awareness of the industry among the general public.
This will help prevent greenwashing, which entails companies making unsubstantiated claims deceiving consumers that their products and operations are environmentally friendly, despite this being untrue.
With regard to communities such as the Indigenous people, changes need to be made in various areas in order to garner additional support for mining companies. For instance, these communities need to have a say in decisions about projects that impact them. Additionally, cultural and environmental aspects need to be adhered to and respected with decisions made that also ensure financial benefits for local communities.
Different mining enterprises such as Hecla Mining Company (NYSE: HL) are adopting ESG principles in ways that suit their specific operations, and this is further transforming the way mining is conducted around the world.
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