Supply chains are coming under increasing focus, with sustainability consultancy Kumi Consulting highlighting the impact of growing regulation, particularly in Europe, which sees manufacturers and consumer brands possibly being held accountable for the actions of their raw material producers.

Simultaneously, there is a significantly increasing scrutiny over mining companies’ business and operating practices by civil society.

These developments within the regulatory space, comments Kumi Consulting MD Andrew Britton, provide that mining companies, and their customers, could face legal action if there are issues, such as human rights abuses, for example.

“This is something we see first-hand in our work. For example, in recent months, we delivered a comprehensive environmental, social and governance (ESG) due diligence assessment of a mining company operating in various African countries on behalf of a major European multinational customer of that company’s product,” Britton elaborates.

He adds that the key driver for this work was that the board of the European company was concerned that it was exposed to legal liabilities owing to allegations of human rights abuses at the miner’s operations.

“Our role was to establish the facts on the ground and put in place a comprehensive action plan for areas that needed to be addressed.”

Mining companies have been focused on issues such as community relations for a long time, though Britton says the difference now is in the level of scrutiny being faced, and in the expectation for responsible business practices.

“It is no longer good enough for a mining company to say they have built a school, or made donations. Mining companies need to approach ESG issues with the same rigour and seriousness that they approach other business fundamentals with,” Britton says, noting that effective controls need to be established, risks need to be assessed, and effective mitigation needs to be developed and implemented.

“They also need to get on the front foot on difficult challenges, rather than try to ignore issues or argue that it is not their problem. What we are seeing in our work is many companies are realising they need to refresh and revitalise their management systems and processes for issues like human rights and social performance to make them fit for purpose.”

In addition to this work, Kumi Consulting helps mining companies to understand and prepare for the growing number of responsible production audits or certifications that customers are increasingly requesting.

Typically, this involves benchmarking a company’s existing systems and practices against the relevant standard, identifying if there are any gaps and supporting them to take the steps necessary to pass the scheme audit.

Expanding on the due diligence aspect, Britton notes that an increasingly important part of this work relates to risk assessment and capacity building with small-scale miners, who “don’t have the resources or sophistication of the large mining houses, but are nonetheless a critical part of the sector, particularly in battery metals”.

“This work is a great example of not avoiding difficult challenges or pretending that they don’t exist, but getting stuck in and working pragmatically to develop solutions. And that, really, is what we at Kumi are about,” Britton says.

Kumi enables its clients to manage social and environmental risks, improve performance and ultimately create value through responsible business practices.

“Our focus is on helping companies operating within or sourcing from global supply chains to implement responsible business practices. We work extensively in the mining sector in Africa, which is a sector that is the critical starting point for the global supply chains of so much of what people rely on every day,” Britton concludes.