Strengthening sustainability ratings is a key objective for mining companies. Operators need to demonstrate their capability through data to gain the support of key stakeholders. Building and maintaining a business resilience program is essential for this. We learn how to improve an ESG rating and the benefits of a business resilience program.
A strong ESG rating is a necessity for modern businesses, yet the mining sector must work far harder than other industries to achieve this due to the direct impact that operations have on the environment and the risks involved. The resource industry is being held more accountable than ever before. Industry executives are being held directly accountable for the issues their companies cause, both morally and legally.
Historically, pressures surrounding business activities would come from activists and community groups, with the media only joining in when there was a negative news story. These days, pressure for improvements in ESG performance is likely to come most intensely from the board members and shareholders and even the people who work within the business itself. Investment capital and stakeholder satisfaction can be directly attributed to a companies’ ESG practices.
Mining companies must be seen to be taking positive action to improve the situation rather than being viewed as part of the problem. A mining company may be extremely conscientious about the environment and respectful to the local communities, but if they cannot share data to back this up then they risk damaging accusations of greenwashing. To avoid this, it is critical to have data that is accessible and shareable for stakeholders.
“Data is valuable as it allows organisations to directly address the greenwashing label,” explains Jarrod Wilson, CEO of Dynamiq.
Dynamiq’s EMQnet platform allows a broad spectrum of operational data to be collated centrally and distributed among various stakeholders. Crucially, the online platform clearly demonstrates a company’s performance and monitors any incidents in real-time.
EMQnet launched nearly 20 years ago in response to a serious client incident. And two decades on, the platform is used by some of the world’s largest energy and mining companies. The platform can be customised to meet the specific needs of a business, enabling the management of risks, security, and emergencies.
Improving an ESG rating
Achieving a high ranking on Dow Jones Sustainability Indices is something mining companies are taking seriously. Many specifically state their intent to report publicly, while others use it as a strategic driver of their business. And there are increasing examples of how companies with strong records on sustainability perform better on the stock market and experience greater returns on investments.
Rankings are based on a company’s performance in key areas relating to sustainability and other environmental criteria. To succeed, the ESG mindset needs to become part of their culture at all levels and an accurate reporting culture is demanded. There is an expectation on companies that they show continual improvement in their ESG performance.
“The fact is, the mining industry, having lost control of the narrative, is having to now work diligently to regain ascendency in this important area,” adds Wilson.
The ability to demonstrate that you have invested in capability and having the data to back this up allows leaders to show why their business should attract greater talent and better capital.
“The transparency will build greater trust. Companies need to be more open to that transparency, and either prepare better or just be more open,” explains Wilson. “They have to make a conscious choice. Because if you find yourself in a hot issue and you haven’t clearly agreed your approach beforehand, you’re never going to resolve it in the heat of a crisis.”
ESG strategy and resilience programs
Resilience needs to be a key consideration when developing a business strategy as it runs in parallel with a company’s long-term direction. If operational resilience is not factored in when building a business strategy when ESG requirements are being considered, then it points to trouble further down the line.
A news story about poor environmental practices or negative corporate culture can severely impact market capitalisation. And with the prevalence of social media, it is harder to escape scrutiny. Social media makes it easier for minority groups to hold large corporations to account. A failure to manage the response correctly can seriously damage the reputation of a business, resulting in a loss of confidence from investors. Reputations take a long time to build and can be ruined very quickly.
The mining industry faces a broad spectrum of events and it is important to remember that not all of them can be planned for. However, an effective operational resilience program ensures a quick and effective response and helps to limit any damage through robust response and recovery planning incorporating communications and stakeholder management strategies.
“You can’t write a plan for every threat,” says Wilson. “You can do all the assessments you want, and there are certain ones that you have a high degree of confidence that will play out. But you still need to be able to continue operating as a business regardless of what manifests.
“Rather than spending all your time trying to focus on threat assessments and controls, you’ve still got to have the pragmatic view that something’s going to come out of nowhere. And you still need to continue running your business because you’ll get punished either way.
“It has to be timely, accurate, and fact-based. And it’s also got to be quantifiable via the data.”
To make the right decisions in a crisis, accurate information is required. EMQnet allows a business to get on top of a developing situation quickly by inviting the decision-makers into the event. When an event happens, data is immediately shared with multiple authorised parties within an organisation and can be accessed on smartphones and tablets. Real-time data sharing via EMQnet enables greater transparency and accountability to all stakeholders and community groups, ultimately enhancing a company’s ESG rating and reputation.