Spotlight: ESG and sustainable mining
Growing up on a farm in northeastern Scotland, Sarah Gordon saw how sustainability was the key to peak agricultural production, and was always aware of the importance of the environment.
Choosing a path as an exploration geologist and recognizing the need for a better way of doing things than were being done in the coal mines of the U.K. in the 1980s and 1990s, Gordon saw the mining industry confronted with the uncomfortable question: What is more important, production, or the environment?
She set out to help find a balance. During one of her first case studies as a PhD student on location doing risk assessment at a mine in Brazil, Gordon’s team recognized that sustainability issues had to factor into calculations, and be part of the decision making table at the board level. The Imperial College PhD candidates were able to improve production, safety and sustainability so much that the company they were consulting for reversed course, deciding, after all, not to sell its mine.
Recognizing the market’s unfamiliarity with the ESG concept, Gordon and her co-founders at risk management consultancy firm Satarla use enterprise level risk management to put ESG on the corporate agenda, and it’s working.
In the six years since Satarla started, Gordon has seen the paradigm flip from subtlety adding ESG to a risk management portfolio, to, over the past year, moving to the forefront of the agenda as investors demand transparency from mining companies and social license to operate becomes akin to a mining license itself.
Today, Gordon is demonstrating her commitment to sustainability by living in an off the grid pod on the family farm in Scotland between Aberdeen and Inverness, relying for energy on a wood fire, gas stove, solar panels and a wind turbine.
“It’s easier said than done but its cool because its what I spend my time talking about — how do we make ESG real? I think it’s got to be done by testing it, and seeing if it’s possible,” Gordon says.
Gordon-led Edumine course ESG and Mining kicks off online May 20. Here’s a sneak preview of the syllabus:
Q: Define ESG?
Gordon: It stands for environment, social and governance, but it means sustainability — it’s just the latest terminology. It means looking after things so we leave the earth in a positive state for the next generations.
Q: How and why does ESG impact mining industry professionals?
Gordon: Mining has a terrible reputation. There was a lot of “we made a lot of money, but don’t care what we’ve done to the planet” [mentality], but I think mining is turning a corner because, if mining companies don’t take ESG seriously — they will not get funding.
It will begin by not being able to get insurance for doing what you’re doing. You’ve got your investment —you’ve got insurers, you’ve got regulators beginning to ask the right questions. You won’t get your permit; you won’t get your license to operate unless you are able to show that you will be able to positively manage the environment and the social aspects.
This means that mining has to step up to the plate and deliver what people in the sector have been trying to do for years. All the raw materials we need come from the mining sector…but they need a responsible big return on capital.
President Biden saying everyone needs to be carbon neutral by yesterday — who stands to get the most benefit? It’s the mining sector, because the mining sector is the new energy sector. We need the materials such as lithium and cobalt, and we don’t have enough in play, we need more, we need to dig them out of the ground and there, the shift to taking sustainability seriously could actually revolutionize the mining sector and grow [it] hugely.
Q: How is ESG a strategy for mining companies?
Gordon: If you cannot deliver your strategy, taking into account society’s expectations, and in the reality of ESG, then you’re going to fail.
You can’t just set production targets and forget everything else, you will lose your license to operate, and you will lose your funding. You will miss out on a whole lot of opportunities. If you haven’t tried to figure out the environment, social and governance risks, projects fail.
Q: What can industry professionals expect from the ESG and Mining course?
Gordon: This is new for everybody. Everybody is starting from the same position — that you know more about your context than anybody else.
You are bringing unique experiences to the table, which will be hugely valuable for an understanding of how we can manage and leverage ESG.
You’ve got a case of everybody is on the same path, but you’re an expert in your area, so bring your stories, your case studies, and your problems, and we’ll work through them in the course. ESG is all about listening to, and having empathy for one another’s perspectives.
Read Sarah Gordon’s full bio, and Edumine course details here.