Promising and promoting sustainability:But what happens when things go wrong?
Mining companies have been implementing sustainability-themed programmes for decades. They have long realised that their continued operations rely on the building of positive relationships with the likes of NGOs, governments and communities, and that laying waste to the environment or exploiting their workers is detrimental to their long-term prospects.
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In recent years, the emergence of a plethora of standards, guidelines and reporting requirements has seen the crystallisation of a more formal sustainability language, riddled (as most fields are) with jargon and a variety of popular buzz words and phrases, which inevitably pop up in sustainability and integrated reports. The process of establishing a value-adding sustainability strategy is, in itself, a complicated landscape requiring careful navigation. Likewise, communicating the resulting impacts in a succinct, fresh, and insightful report becomes more challenging with each annual edition.
Sustainability reporting is at least partly motivated by a company’s need to manage its reputational risk. However, sometimes things go wrong. Environmental and social disasters befall even the biggest and best of the mining giants and the fact that these contradict bold claims (made by the punters of the company’s sustainability credentials) creates a public relations nightmare. Where litigation is involved, an embarrassed sustainability manager or a frantic communications department is the least of a company’s worries.
The infamous Deepwater Horizon spill of 2010 has cost BP $28 billion to date. More importantly, eleven people lost their lives. Prior to this accident, in the 2009 Sustainability Report, Tony Hayward (then CEO) described the organisation’s recently implemented management system as being composed of “rigorous and tested processes for reducing risks and driving continuous improvement” and went on to state “I see it as the foundation for a safe, responsible and high-performing BP”. Of course, he had no idea that the company would be rocked to the core within days.
Similarly, in its 2015 Sustainability Report (for the year ending 30th June) BHP Billiton claimed that “sustainability is embedded throughout our company”, a bold statement for a company that employs more than 42,000 people around the world, and has complex supply chains and numerous joint venture partners. Then, within a matter of weeks, a failed tailings dam at its Samarco joint venture with Vale resulted in nineteen deaths, two flattened towns, one destroyed river, and possible litigation to the tune of $44 billion. The company may be reviewing its choice of words – and indeed its list of material issues – for its next report.
The good that comes from making promises is far exceeded by the bad that comes from breaking them, and when things get ugly, they get expensive. Whilst sustainability reporting is an opportunity to map out a company’s goals, its plans for achieving them, and its progress in doing so, care should be exercised in striking the balance between having ambitious, high impact targets, and making responsible promises and claims.
The Global Reporting Initiative highlights the need for SMART targets: those that are Specific, Measureable, Achievable, Relevant and Time bound. In mining, these targets relate to a variety of material aspects such as safety, environmental stewardship, resource efficiency and emissions reductions. Together, they need to catalyse and guide strategic action plans for implementation across a mine’s suite of activities. Embedding respect for integrated management systems into an organisation is a good start. However, embedding sustainability into organisational culture involves more than adherence to management systems; it also requires aligning values, and ensuring common understanding of why an issue might be material in the first place.
The process is not static; plans seem to change as often as commodity prices, new deals are made, and CEO’s will come and go. Sustainability has been described as a journey, and long may there be a gap between where we are now, and where we want to be. It’s a gap that needs minding. There is no ambition without it.
