By - Phillipa Burmeister

( Virtual Showroom ) 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.

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. 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 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 in its own right. 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.