1Special Reportthesis Topic Sustainability Imperatives

7/30/2019 1Special Reportthesis Topic Sustainability Imperatives

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global stage. The issue is particularly acute in Canada, which has 0.5 per cent of the worlds

population but contributes approximately 2 per cent of the global total of GHG emissions making

it one of the worlds highest per capita emitters. It was in response to trends like these that the

federal government released its plan to reduce GHG emissions by 20 per cent by 2020. Several

provinces have followed suit with regulations of their own.

The mining industrys consumption of electricity makes it a significant contributor to climate change.

According to data from the Canadian Industrial Energy End-Use Data and Analysis Centre (CIEEDAC),

the mining industry consumed 5.6 per cent of all electricity consumed in industry in Canada in 2007,

and contributed 5.9 per cent of total GHG emissions.

Beyond the environmental impacts of climate change, the issue poses real risks to the mining

industry. These include:

Regulatory risks, such as the potential costs of compliance and reporting requirements across

different jurisdictions and regulations Physical operations risks, such as the potential for operational and infrastructure impacts due to

extreme weather events, rising annual temperatures and altered precipitation patterns

Financial risks, such as those related to carbon liabilities

Market risks that may arise due to changing demand patterns

Strategic risks related to accounting for uncertainty such as future regulation, technology

availability and the price of carbon

Supply chain risks, as suppliers factor in increased costs for compliance and energy

Litigation risks, as affected communities or non-governmental organizations challenge companies

or specific projects on the basis of their GHG emissions

Human capital risks related to attracting and retaining appropriate talent

Some mining companies are already taking action to address these issues. For instance, in addition

to reporting emissions through the Manufacturing Association of Canadas TSM initiative, many

companies are engaging in more extensive reporting and disclosure, adopting energy management

programs to reduce their GHG emissions and developing focused climate change strategies.

Companies that truly hope to derive long-term benefits from their actions, however, must do more

than respond to specific sustainability trends in a vacuum. They must also take steps to integrate

their sustainability practices into their existing management practices. This approach is particularly

important in the current economic climate, as it can ultimately help companies maximize the returnon their sustainability investments.

Building sustainability into your operations

As companies struggle to do more with less, an integrated approach to sustainability becomes more

important. For instance, by integrating a standalone sustainability framework into an overall risk

management program, you can leverage existing practices and processes while keeping

sustainability on the corporate agenda.

Companies that do this well tend to adopt integrated governance structures that include oversight at

the board level, advisory and goal setting at the executive level and operational implementation at


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the business line level. They also have established sustainability strategies that are the product of

enterprise-wide planning and risk management.

In keeping with these best practices, aim to develop your sustainability strategy in concert with your

business strategies and include stated clear objectives. Support the strategy with policies and

guidelines, align it with accepted industry standards and focus it on clearly defined issues that are

pertinent to your organization.

Leaders in this area also tend to communicate their efforts in terms of impacts, as opposed to inputs

and outputs. For instance, consider disclosing the amount of energy saved through conservation

programs rather than simply discussing pure energy consumption. Similarly, rather than simply

tracking the land that has been disturbed and reclaimed, disclose the amount of land that has been

reclaimed back to ecologically productive status. This will put your disclosures in language your

stakeholders understand and go a long way towards demonstrating your strategic sustainability

goals.

Managing stakeholder expectations

Aligning your sustainability practices with your other risk management practices can also help you

better identify and focus on your sustainability priorities. Even in the best economic times,

companies cannot afford to engage in every identified initiative. Pick those areas where your actions

are likely to have the most positive long-term impact.

As you begin to narrow your focus, effective and continuous stakeholder communication remains

critical. If you realign your sustainability efforts, be sure to convey this message to stakeholders. At

the same time, explain what steps you are taking to respond to these imperatives, both over the

short- and long-term.

The importance of this type of stakeholder communication and engagement cannot be over-stated.

The mining industry answers to a huge host of stakeholders, including Aboriginal groups, investors,

non-governmental organizations, governments, industry associations, employees and unions, local

communities, customers, supply chain partners and the media. Mining activity impacts on many of

these groups can be acute and far-reaching, with long time horizons. In many cases, stakeholders

even have the ability to affect the success or failure of business projects or operations.

In working with these various groups, aim to establish and manage the stakeholder engagement

process, adopt industry accepted best practices, consult with stakeholders to encourage their

ongoing involvement and ask for feedback.

Take the example of a mining company operating in a remote region where energy supplies are

intermittent and brownouts are frequent. One effective way to resolve this issue while winning

community support might be to work with the local community to set up a renewable energy

project. In addition to securing a supply of energy and cutting down on GHG emissions in the

process these innovative community partnerships can help to foster exceptional community

goodwill and can potentially result in companies being awarded government investment credits or

accessing fast-track mining permits.

The business benefits

Its long been said that contributing to positive social and environmental performance is the right


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thing to do. In the world of business, it is also the wise thing to do. Mining companies that adopt

effective sustainability programs mitigate their operational risks, maintain their social license to

operate and earn the stakeholder goodwill they need to enable profitable operations. They may

even enjoy a share price benefit. The evidence is increasing less anecdotal; companies that

outperform financially typically demonstrate strong sustainability performance as well.

By Valerie Chort and Glenn Ives, Deloitte Canada

Valerie Chort is a partner at Deloitte Canada and national leader of the firms Corporate

Responsibility & Sustainability practice. She can be reached at 416- 601-6147 and

[email protected].

Glenn Ives is a Vice Chair at Deloitte Canada and the North American Mining leader. He can be

reached at 604-640-3159 and [email protected]

Documents

1Special Reportthesis Topic Sustainability Imperatives