Expert Insight

Engage from within

Mining can build its position as a fixture in a new future

June 11, 2020

Mark Rachovides

Roundtable
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March 12, 2020
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Geologists know something about time, the rocks we need didn’t just arrive by someone pressing a button. What we decide to do with them also takes more than a click or a swipe to extract the products derived from raw materials, with the whole production processes having a lasting effect on the locations that host us and the people who live there.

So, is the mining industry a dinosaur? With climate change and other contemporary challenges signalling a new epoch, should what we do and what we think be consigned to the past? In some ways, yes.

Despite all the creativity, diligence, patience and rigour that achieves such scientific and engineering progress, we seem to have left those attributes behind when it comes to communication.

Take the current ESG ‘moment’ as an indicator. Yes, ESG is not really coherent yet and its coalescence attracts valid and important criticism, but we mining folk often miss the point. Yes, it’s all being driven by demands for input standards and certifications by our customers and by opportunism by the post-2008 financial sector.

But there are other factors as well, the largest of which is that both consumers and governments increasingly actually do want to change the way we live in response to climate change.

The European Green Deal is case in point, we are being forced to change our everyday behaviour, an objective usually supported by state action or money. In this case, it’s both. In terms of our industry, there are at least two aspects to this change.

First, the massive amount of our products required to enable the transition to greener energy and industry is fantastic. Second is the requirement that we ourselves change our businesses to become greener.

But that’s not the whole story. The elephant in the room is commodity prices. Sooner or later, consumers will have to accept the realities of permanent price rises and that may prove difficult – electorally, for example.

Before the recent wave of ESG mania, the changes being asked of the mining sector were wrapped in the somewhat threadbare phrase ‘social licence’.So far, we have essentially bundled keeping the neighbours and their officials happy into that sack called ‘externalities’ and, in truth, prioritised the bottom line. Not any more. Profit isn’t enough. It’s not enough for consumers,governments or investors and when the people who own, rather than run, our business say that, we, and particularly the C-Suite, had better take notice. 

NGOs are not terrorists

So what? Many companies would claim to be way ahead of these expectations: “Our company deploys and nurtures the highest standards has great sustainability reporting, meets every supply-chain criteria imaginable, doesn’t do business with nasty dictators or child-employers and we engage with all manner of ethical investors.”

But why then are we still treated with such ready suspicion and fear, all over the world at all levels and from all constituencies? Ignorance and our past sins are not things we can hide behind anymore; we need to take ownership of them instead.

Like the dinosaurs, we are perceived as slow and out of time. Looking at the new faces in Brussels, for example, MEPs, European Commission officials and even commentators, a generational shift seems to be underway.Their contexts, terms of reference, priorities and language don’t chime easily with industry as we have understood it. They want and fear different things that reflect a new consensus whether we like that or not, and we need to see that as an opportunity, not a threat.

‘Engagement’ cannot mean the industry just talking to itself and its friends, that is called a “bubble” or an “echo-chamber” these days.Engagement now needs to encompass whole vertical supply chains from our own suppliers down to our customers and the ultimate end-users. By definition, an industry-led approach can then capture far more attention by repositioning itself within, rather an apart from, consumers’ daily lives.

Some companies – Scandinavia immediately comes to mind –have already realised the opportunity of doing that through more collaboration and collegiality. It forces our critics to contend with a bigger picture – you can’t then just export a single issue to sanitise it. That does chime with the Green Deal and with ESG and with the climate change agenda and makes us part of it. We should not leave it to the finance sector to set the industrial agenda alone by hiding behind our audits and company programmes.

NGOs are not terrorists. They may be controversial, lack scientific competence or even be far less transparent than the industries they may target, but they do telescope the fears and ideas of many ordinary people –our customers.

We should talk with them more often and more openly. How can understanding grow otherwise? We must also include other actors in that discussion. Investors, regulators and even trade unions are the usual roll-call but our customers strangely do not often appear. I find it worrisome to see,for example, some metals or chemicals businesses seemingly positioning themselves as part of the “greener future” by contrasting themselves against the mining industry that supplies them.

Trade practices and competition policy need to brought into the debate, also. If we take a ‘one planet’ approach, then all (not just our) standards that relate to our products – from transport to fabrication – ultimately need to be both evenly scrutinised and applied. By encouraging that, we are then actually engaging in the underlying debate rather than being seen to frustrate it.

So yes, miners need to up their game at a practical level and deliver much better messaging, but we can do so from a position of optimism.  

I speak from a European perspective, a Europe that still sets standards that the rest of the world cannot ignore. We need to tell people much more about what those standards deliver and how those benefits translate into everyday lives – become part of the fixed background on the phone, as it were, rather than a momentary alert that is swiped left.

Roundtable
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June 11, 2020

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