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ESG STRATEGY
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No sector unaffected by GROWING ESG DEMANDS
In a world facing challenges that range from climate change to social inequality, every business sector will experience rising demands on its environmental, social and governance (ESG) performance.
BY SRK CONSULTING
“T he rise of ESG confirms SRK’s approach that good engineering is a holistic and complex process that must address a myriad of risks through the integrated application of relevant disciplines,” says Vis Reddy. “This applies to every stage in the economic value chain.” “The financial sector is being subjected to mandatory ESG disclosure requirements in many jurisdictions and is responding quickly to stakeholder interest in ESG investment,” says Darryll Kilian, SRK partner and principal environmental consultant. Mining should take account of the greater ESG focus required by financiers and other stakeholders. “The importance of ESG issues has grown steadily in recent decades – building momentum from concerns around environmental and human rights, which are now front-of-mind for consumers and governments alike,” says Vis Reddy, managing director of SRK Consulting. “It is now clear that no project can succeed without prioritising ESG factors from its early stages.”
Reddy notes that SRK Consulting has been a pioneer in evolving its professional services to meet a range of sustainability hurdles – and had recently re-branded its environmental business unit to focus on ESG. Vis Reddy
“Consideration of ESG at the earliest stages of planning, from exploration onwards, is now recognised as added value to mining projects. Mineral resource and reserve reporting codes are being updated to recognise this,” attests Kilian. “However, the urgency to address ESG in the planning of projects goes well beyond the mining sector.” SRK Consulting has increasingly seen ESG risks affecting projects related to water, infrastructure and energy.
SOCIAL ASPECTS
Director of social risk and stakeholder relations management, Vassie Maharaj, highlights projects in every sector now require effective engagement processes for meaningful stakeholder participation and shared value: “The evolving global ESG framework places social aspects at the centre of the project lifecycle – requiring decision-makers to take account of issues such as gender, human rights, vulnerability and livelihoods in development planning and implementation.”
SRK’s ESG offerings focus the expertise and experience of several professionals on advising clients to integrate these requirements into their operations and systems, according to Franciska Lake, principal environmental scientist at SRK Consulting. “There has been an important shift to strengthen the link between licencing and the engineering design requirements, which aligns with SRK’s standard integrated approach to projects,” she notes.
BROADER PRESSURE
Reddy argues that the sustainability requirements of large financiers had once been the prime drivers of ESG, but that this pressure is now coming through at many points in the supply chain. “From manufacturers to endconsumers, our society is looking more closely at the whole supply chain to see whether ethical and other standards are being maintained,” he says. In a recent example of this, the RE-SOURCING initiative is working to ensure that the European Union sources its minerals responsibly and sustainably. Funded by the European Union’s Horizon 2020 research and innovation programme, the RE-SOURCING project has involved SRK
The Equator Principles
The Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. The framework is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.
Vassie Maharaj, Franciska Lake and Darryll Kilian from SRK Consulting. Consulting to help facilitate the necessary input from affected stakeholders in Africa and Asia.
Kilian points out that companies across the continent are expected to make more ESG progress on issues such as disclosure, integration and inclusivity as well as health, safety and climate change. Aside from the lender requirements, this impetus is also being driven by international sustainability frameworks such as the UN Sustainable Development Goals and AU Agenda 2063, which are in turn influencing national legislation.
WATCH VIDEO: THE ESG AGENDA IN BUSINESS
greeneconomy.tv
Vis Reddy, MD of SRK Consulting, and Gordon Brown, Green Economy Journal publisher, discuss environmental, social and governance (ESG).
“We no longer work in a vacuum. Everything is connected,” says Reddy. “There is a responsibility for businesses these days to understand the integrated nature of impact.”
Industry is continually adapting to new ESG legislation and the evolving inter-national paradigm on sustainable development, first captured by the 1992 Rio Declaration and now represented by the 2015 Sustainable Development Goals. ESG legislation in most countries has become more complex and will continue advancing, aligning with national challenges and international vision.
Delivering value to Delivering value to the mining industry Delivering value to the mining industry the mining industry
We aim to o er water, waste and energy solutions that not only positively impact the bottom line, but are sustainable and good for the environment. At Veolia, we understand the need for e ciencies, cost-e ectiveness and most importantly At Veolia, we understand the need for e ciencies, cost-e ectiveness and most importantly safety in mining operations. safety in mining operations. We aim to o er water, waste and energy solutions that not only positively impact the bottom We aim to o er water, waste and energy solutions that not only positively impact the bottom line, but are sustainable and good for the environment. line, but are sustainable and good for the environment.
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