Shining light on a wicked problem: how do we measure the good in our industry?

Sarah-Joy Pierce, Director, Strategic Mining Communications

The mining industry is not the first industry to come across a wicked problem. What’s a wicked problem, you may ask? It’s a social or cultural issue or concern that’s hard to explain and even harder – sometimes impossible – to solve.

For us, the problem centres around how our industry fits into a decarbonising world. When it comes to the global decarbonisation agenda, there’s so many ‘strings’ making up the knot of our wicked problem that it can truly seem impossible.

Just flick through this Yearbook and you’ll see them: the necessity of steel for coal-making and of critical minerals for battery-making balanced against calls to stop mining, the intrinsic importance of the resources industry to regional communities versus the impacts we can have on the environment, the role of affordable energy in developing nations, or even the reliance of Australia’s economy on coal exports.

How we handle the wicked problem of where the resources industry fits in a decarbonising future will shape the economy of our state and our nation for years to come.

Wicked problems and where to find them

Since nothing under the sun is truly new, why don’t we look to how other industries have traversed the space between ‘wicked problem’ and ‘way forward’?

Fast fashion (stay with me, this is relevant to a male-dominated industry) is a wicked problem. Companies can now manufacture, distribute and retail fashion products in a matter of weeks – not even based on ‘seasons’ anymore, just to meet consumer demand. However, in meeting that demand, there are environmental effects, labour rights violations, and a huge amount of waste produced. The effects, both positive and negative, hit on an individual consumer level, a society level and a macro government and global level.

To address this wicked problem, the Baptist World Aid organisation in Australia publishes their annual Ethical Fashion Guide. A decade or two ago this wouldn’t even have registered with consumers, but now it can (and does) affect purchasing decisions and stock prices.

Companies also use good rankings as a reputational boost, attracting shoppers with ethical concerns. This ranking and rating system isn’t a solution to the wicked problem, but it certainly helps clarify what the problem is, and who’s taking steps to solve it. It’s also important to note that ‘wicked problem’ doesn’t necessarily mean wicked industry.

A commonly discussed wicked problem is the rise of antibiotic resistance – a problem that the medical sector will have to solve in the coming years, and that the CDC calls ‘one of the biggest health challenges of our time’. This has individual impacts, society-level impacts, and certainly far-reaching global implications. However, stopping the use of antibiotics causes a bigger problem than it solves – so further research is necessary to find a solution to this wicked problem.

It's not hard to draw parallels between either of these industries and the wicked problem facing the resources industry. None of it can be solved overnight, or without significant effort and policy change. But there are people and organisations working now in this space towards sustainable outcomes. So, if we can’t immediately solve the problem of our future, what can we do about our present?

Seeing the good and calling it out

Large consulting firms (among them Ernst & Young and KPMG) regularly publish reports on the business risks and opportunities facing the mining industry. Social license to operate and environmental/social concerns have been rising to the top of these lists over the last few years. License to Operate has held the top spot in Ernst & Young’s report for the last two consecutive years, and currently holds the fourth spot in KPMG’s report (bumped down only by the global pandemic and economic downturn/uncertainty).

On the ground, we can do relatively little to influence global markets and pandemics. But one area to which we can all contribute is bettering the relationships that our industry has with its stakeholders, strengthening our social license to operate. There are three separate but inextricably linked approaches at work here:

• recognising and engaging stakeholders and host communities;

• reporting on our social contributions; and

• telling our story well.

Recognising the importance of our stakeholders is a relatively new trend. Edward Freeman’s work on stakeholder theory arguably underpins most of modern community engagement, and it was only published in 1984, not yet four decades ago. In our industry, a stakeholder is anyone affected by our operations – from the host community to workers, suppliers and investors. Why are they important?

The relationships a project has with its stakeholders form the basis for its social performance, building organisational legitimacy. That’s an extremely unemotional way to say that people do care about the things that affect them, and when you recognise that and make them a part of decision-making by consulting with them, they reward you with support that shows up when you need it.

Corporate social responsibility, a term that most would be familiar with from corporate reporting, is also a relatively new field. If you’re not familiar, corporate social responsibility (or CSR) is essentially about identifying the expectations society has about a business (beyond legal compliance and making a profit) and taking the initiative to meet those expectations.

Consumers are becoming more aware of CSR and judging business practices with a CSR perspective. That’s why more businesses are publishing sustainability reports and social performance reports – to report on their contributions in this area. This reaches a wider audience than direct stakeholder engagement but is important in identifying and lifting standards in our industry. The third thread of positioning our industry runs parallel with stakeholder engagement – the importance of telling our story well. This sits squarely in the domain of public relations.

Put simply, by communicating the good that our industry is doing, we’ll improve the relationships we have with our stakeholders as well as the media. As a flow-on benefit, these improved relationships will lead to better reputational outcomes (because more happy people = more people in our corner).

We’re rightly concerned about how our industry fits into a world that’s becoming increasingly occupied with hard-to-measure metrics like social performance, community contributions and reputation. But at the coalface (pun absolutely intended), we see the positive contributions that the industry makes every day, and the disconnect between the media narrative and the mine site.

The way forward

Combining the three approaches of stakeholder engagement, corporate social responsibility reporting and telling our story well with the examples of how other industries have solved wicked problems leads us to this: a call for more research into how we can benchmark our projects’ social performance and urge each other to be better.

The industry is making some strong steps forward in this area, but if we don’t talk about it, our stakeholders won’t know about it. The Minerals Council of Australia has started this conversation by adopting the Towards Sustainable Mining accountability framework, strengthening our sector’s ESG commitments.

But the ‘S’ in ESG is notoriously hard to measure and manage. Getting clearer on what best practice looks like for Australia means talking about what we do well and acknowledging where we could do better. It’s important for us to pull on those three strings – community engagement, social performance and telling our story. Measuring the intangible is a challenge, but an industry standard is necessary when it comes to social performance and the sustainability of our sector.

While it won’t solve our wicked problem overnight, we’ll get more comfortable in the space in between: where our industry becomes more vocal about the good things we do, and we find our place in the way forward. 