Environmental, Social and Governance (ESG)
There has been an increasing emphasis on sustainability as well as responsible mining practices in the last decade and this trend is poised to continue in the coming year as well as companies have begun to prioritize ESG considerations that include reducing carbon emissions, conserving water conservation & implementing community engagement initiatives. Organizations will have to demonstrate their commitment to ethical practices as well as sustainability in order to maintain their social license to operate. Therefore, investors are more likely to invest in mining companies with strong ESG credentials.
The global pressure of combating climate change is surging & the mining industry is under the spotlight. Also, the objections to mining are not taken into consideration the crucial role it plays in the global economy, offering essential raw materials to a wide range of industries. But, traditional mining practices have had detrimental effects on the environment these include deforestation, soil erosion, water pollution as well as greenhouse gas emissions. In order to address these problems, mining firms have begun to adopt innovative green mining initiatives as well as effective water & waste management programs.
Moreover, companies at present are also exploring energy sources which include solar & wind, to the power their operations as an alternate option. What is gaining momentum is the reduction on the dependence on fossil fuels and electrification of mining equipment as well as vehicles. Although, carbon capture & storage technologies are in their infancy, they still hold promise for a carbon-neutral mining operation in the future.
Vale - a Brazilian mining company is one among the largest producers of iron ore as well as nickel in the world. The key elements of the company’s ESG agenda comprise commitment to acting on climate change, and setting a target to attain net zero emissions in its operations by the year 2050, with target of 30 per cent reduction within the next two years.
“The need for greater diversity, equity, and inclusion as well as a longer-term, more strategic approach to mine closures and rehabilitation are among the most pressing ESG improvement topics. Better, quicker judgments will result from investment in data capabilities,” says Naivedya Agarwal, Co-founder, Runaya.
“With new technology innovation such as use of drones, remote operating centres and autonomous trucks, the companies will seem to gain benefit from all in terms of cost, productivity, and safety,” he adds.
