Environmental, Social and Governance (ESG) is not a new concept. The phrase was coined in 2005 by the United Nations Environment Programme Initiative which formed the start of the sustainable investment movement that is widely used today.
Where ESG was traditionally used by environmentally and socially conscious investors to screen investments, it is being used more widely today amongst investors as well as within businesses to measure their non-financial performance indicators. And at a time where there is a global drive towards a low carbon future, there is growing pressure for businesses to prioritise sustainability by implementing ESG measures.
This is particularly relevant to the mining industry due to its large environmental impact and, as a result, the industry faces pressure to reduce the effect it has on the environment and society and improve its governance. However, setting ambitious ESG targets is just the beginning. The real focus should be on ensuring these ESG targets are, in fact, achieved.
Making ESG targets a reality
The solution to achieving ESG targets depends on:
- Culture and leadership – setting the tone from the top, leaders must foster a culture that encourages sound environmental, social and governance practices.
- Strategy – the business strategy must include strong commitments to ESG and explain how these will be achieved.
- A business’s operating models – these should be set-up to address ESG-related opportunities, challenges and risks.
- Transparency, accountability and collaboration – organisations should ensure that ESG targets are clear and that they are woven into a business’s operations so that all departments and organisational levels are working towards achieving the same overarching goals.
- An effective governance and reporting framework – this enables a business’s decision-making to be aligned with its ESG targets and to demonstrate results.
- Recruitment of experienced and qualified talent to facilitate accountability and mobilise the business towards achieving its ambitious targets.
- Investing in and implementation of technology – environmental technology enhances mining operations making them cleaner and more efficient, while management technologies enable stakeholders to facilitate accountability.
At a time where there is a desperate need and focus shift towards a low carbon future, industries – and in particular, the mining industry – are receiving increasing pressure to prioritise ESG. While setting ambitious ESG targets is an important start, businesses can implement several steps to turn these into reality.
Cubility is a management and technology consultancy that specialises in solving business, operations and logistics challenges through tailored strategies and systems. We utilise in-house developed frameworks and models as well as industry standards to optimise clients’ governance structures, improve their risk management and achieve specific business objectives. For assistance with your business challenges, please get in touch with us. We would love to hear from you.
