The Role of Environmental, Social, and Governance Managers

The mining industry is one of the most significant sectors in the global economy, providing essential resources to advance other sectors, build societies, and improve people's way of life. 

However, due to increasing pressure from governments, the public, and climate change targets, the industry has to spotlight itself and look at building a greener and more sustainable future.  

Due to this, environmental, social, and governance (ESG) considerations are increasingly becoming a primary focus and are vital to the industry continuing to flourish and become 'future-proof.' 

In this article, we will explore the following topics:

• ESG and its role in mining 
• Why ESG is essential to the industry
• The vital role of an ESG manager in ensuring the mining industry is carrying out its environmental, social, and governance responsibilities. 

The Role of Environmental, Social, and Governance in Mining 

The mining industry can affect lives in so many positive ways. It drives economies, provides employment, helps improve our way of life, and allows societies to advance. However, when mining operations are conducted in a poor and unregulated manner, it can have catastrophic effects on local communities and the environment. 

So that mining operations carried out are more socially responsible and environmentally friendly, ESG addresses three vital considerations to attaining this: environmental, social, and governance. Let's explore these in more detail. 

Environmental

Whilst it is vital to the global economy, there is no shying away from the fact that the mining industry has an impact on the environment, from air pollution to water contamination and deforestation. 

However, following significant environmental summits such as COP 27, there is increased societal and political pressure on the industry to minimise its environmental effects and build a greener future. For example, mining powerhouses such as Australia and the US have set environmental targets of net zero by 2050. However, as the mining industry currently contributes between 4% and 7% of the world's total carbon emissions, action must be taken. 

Therefore, mining companies must adopt sustainable practices such as reducing emissions, incorporating renewable energy sources, implementing waste management strategies, and effective land reclamation. Mining companies, such as Rio Tinto, have also begun to invest significantly in green technologies, including autonomous vehicles, electric excavators, and solar-powered machinery.

Social

Mining firms must work towards positively impacting the communities they operate in, which includes respecting human rights, providing for local economic development, supporting education and healthcare systems, and ensuring safety and security for employees and local people. 

A mining company's social licence to operate depends on its ability to demonstrate its contributions to its communities. Therefore, companies must engage in meaningful dialogue with communities, including indigenous groups, to understand their needs and address concerns.

Governance 

Mining companies must meet high governance standards to ensure transparency, accountability and ethical behaviour. Governance is crucial to mining's sustainable development as it ensures that local communities benefit from extracting natural resources.  

Governance entails mining companies making sure they are carrying out the following:

• Establishing effective governance structures
• Complying with laws and regulations
• Setting clear policies and procedures
• Transparent about their operations
• Financial performance and risks
• Ensure that processes do not contribute to corruption or undermine human rights.

Why Environmental, Social, and Governance are Vital 

Here are three reasons why it is critical for mining companies and the wider industry to act on ESG:

It is Crucial to Lenders, Investors, Customers, and the Public

Responsible investment and purchasing are a reality in this age of increased environmental and social concern. As a result, lenders, investors, and customers increasingly want to be kept updated on ESG issues and be given peace of mind that these matters are in hand. 

Mining companies must demonstrate a proven track record of exceptional ESG performance, and a failure to do so may result in a loss of investment and customer interest. Conversely, positive ESG will increase investment, customer interest, and retention. 

Avoid Risks that Come with Negative ESG performance

By maintaining a high level of ESG performance, you will avoid risks that can disrupt or stop a mining project. These risks include:

• Business continuity is threatened by the inefficient use of scarce resources such as water and energy.
• An unsafe workplace results in the loss of licences, description of operations, and civil or criminal liability. 
• Infrastructures are exposed to physical climate change risks due to poor planning and design. 
• Unhappy communities disrupt mine expansions or operations. 
• Licences have been lost, operations have been disrupted, and civil and criminal penalties have been imposed due to issues such as environmental pollution.  

Internal and External Stakeholders will Put Firms Under the Spotlight

There is an increased demand for transparency and performance on ESG matters from internal and external stakeholders, such as governments, NGOs, communities, employees, and regulators. There are many challenges facing mining companies and their stakeholders, including climate change, land use, ecosystems, infrastructure, education, food, and vulnerable people. 

Companies and mine sites will have specific priorities, but everyone can benefit if all stakeholders are aligned.  

The Role of an Environmental, Social, and Governance Manager 

An environmental, social, and governance (ESG) manager in the mining industry ensures that the company operates sustainably while maintaining profitability. In addition, the ESG Manager collaborates with internal and external stakeholders to develop and implement sustainability strategies that align with the company's goals and objectives.

As environmental, social, and governance (ESG) issues continue to take centre stage in the mining industry, the role of an ESG manager has become increasingly important. Therefore, they are responsible for ensuring that a mining company operates in ways that generate economic value and minimise negative impacts on the environment and society while maximising the benefits of these practices. 

Roles and Responsibilities of an ESG Manager

• Ensure compliance with environmental regulations and standards. They are responsible for creating and implementing environmental management programs that mitigate environmental risks and minimise the company's carbon footprint. This includes reducing greenhouse gas emissions, reducing energy consumption, and optimising water usage.
• Works with local communities to address concerns about mining projects and ensure that mining activities do not negatively impact surrounding communities or local cultures. This includes managing community relations, addressing concerns about noise and dust, and collaborating with stakeholders in planning and implementing community development initiatives.

• Advocates for community engagement and social responsibility programs. The ESG Manager develops initiatives that promote employee health and safety, diversity and inclusion, and workplace culture.
• Ensures the company has ethical business practices that align with legal and regulatory requirements. In addition, they promote transparency and accountability within the organisation. Furthermore, they monitor and report on corporate governance practices and establish policies that reflect the company's commitment to good governance.
• Evaluates and mitigate risks associated with mining operations. They identify potential risks and develop strategies to minimise them. Moreover, they collaborate with stakeholders to address concerns or incidents that might arise.
• Tracks and reports on sustainability performance metrics. They gather data from multiple sources, analyse it, and communicate results to relevant stakeholders and the public. They also respond to inquiries from regulators, rating agencies, and other stakeholders.
• Communicates the company's sustainability goals, plans and progress to internal and external stakeholders. They promote corporate sustainability through outreach programs and stakeholder engagement.

Skills and Qualifications

ESG managers are expected to hold a bachelor's degree in a relevant environmental, sustainability, or engineering degree. Furthermore, many universities offer Master's degrees in subjects such as environmental, social, and governance management, business sustainability, and environmental governance, which can be advantageous when searching for a job. 

Experience will highly depend on the company you are applying for; however, due to it being a leadership position, most will ask for around 10 to 15 years of experience in areas such as environmental leadership and consulting. 

It is also worth noting that as mining is a global industry, many positions may require extensive travel and so need people who are willing to commit to this. The job is ideal for those seeking an international role, and with mines spread worldwide, the possibilities are vast for where you can work. 

Companies would expect you to have extensive knowledge and experience in the following areas: 

• ESIA studies 
• Environmental feasibility studies 
• International Finance Coalition (IFC)
• Local environmental regulations 
• Greenfield sites 

As well as this knowledge and experience, you would be expected to possess the following skills:

• Be confident in communications with senior management, external stakeholders, legal entities, and government officials. 
• Ability to build relationships and engage people in a continuous improvement process. 
• Exceptional IT skills.
• Ability to communicate with lenders.
• Able to handle working in high-risk environments.

Driving a More Sustainable and Socially Responsible Industry

ESG managers are critical in ensuring mining companies operate sustainably and responsibly. They coordinate with multiple stakeholders, develop strategies, and implement programs that promote environmental protection, social responsibility, governance, risk management, and reporting. In addition, by ensuring that mining operations are aligned with ESG principles, an ESG manager can help to build trust with stakeholders, reduce risks, and enhance long-term value creation.

Furthermore, their work around the environment and sustainability is vital to the broader battle against climate change. For countries such as the US and Australia to achieve their net-zero targets, depends on the mining industry implementing greener practices. An ESG manager is vital to supporting mining companies making these changes, making their role crucial in the ongoing battle for our planet's health and prosperity. 

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Our dedicated mining consultants are ready to discover your motivations, skills, and career ambitions. We then work closely with you to find you mining jobs that suit your needs.

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