Securing community and consumer trust has long been a common goal for mining companies. The expectations for how they achieve this have, however, changed.
As Deloitte states in its 2019 Tracking the Trends report, mining companies have historically tried to gain the trust of local communities by investing billions of dollars building schools, hospitals and infrastructure, while supporting them through local procurement and employment.
In many parts of the world, this approach has proven not to be enough, with communities remaining opposed to mining activities despite the promise of development and economic growth.
Deloitte believes the disconnect with communities stems from mining companies viewing their social spend as a cost of compliance, instead of a way to deliver measurable and sustainable benefits.
To drive different social outcomes, Deloitte urges mining companies to change this dynamic by creating a model that will deliver ‘shared value’ to communities.
Deloitte partner, sustainability Chi Woo says the issue of establishing trust remains at the heart of the change and any strategy that has been introduced.
“A big driver from this trust is the perception that an organisation is not pulling in the direction that is in your interest, whether you are a consumer or a community,” Woo says.
“If that perception is allowed to fester and embed itself in the minds of stakeholders then it is going to be very hard to shift, no matter what you do.
“You might put out a sustainability report, you might say that you have world-leading policies in relation to biodiversity or mine rehab or water, but it is still going to be very hard because of the root issue to do with trust.
“That trust is eroded because of the perception that you are not in it to benefit the other stakeholders.”
Deloitte points to Rio Tinto’s recent work to improve in this area as a leading example of what mining organisations are trying to achieve with a shared value approach.
Rio Tinto acknowledged this emerging requirement by reshaping its image and positioning itself as part of the solution, not the problem.
The mining major used a series of media campaigns to tell a compelling narrative about its contribution to society, while recognising the fact that miners cannot secure a future without strong community support.
There is a big drive internationally for organisations to connect with the global sustainability goals.
Rio Tinto backed this commitment by becoming the first major mining company to support the public disclosure of their contracts by host governments.
Mining companies have needed to become better prepared in this way to reflect the growing organisation of detractors that publicly oppose the mining industry.
“The critics or campaigns against the sector, particularly in the coal sector, have been very well organised and vocal,” Woo says.
“Part of that is social media, part of that is also that they have a common platform they are working to make change to, which is climate change, the impact of carbon emissions and the role of fossil fuels moving forward.
“In that backdrop there is heightened appreciation that to be successful moving forward we have to address those issues, but we also have to be very sharp in demonstrating how we are impacting broader society.”
For organisations seeking a guide of the values that now drive this strategy, Woo says the United Nation’s (UN) Sustainable Development Goals have helped develop the sustainability agenda for all major industries, including mining.
Introduced in 2015, the 17 goals were established as part of the UN’s 2030 Agenda for Sustainable Development.
They target action by all countries – poor, rich and middle income – to promote prosperity while protecting the plant, with focus on poverty, hunger, health and well-being, education, gender equality, and more.
“There is a big drive internationally for organisations to connect with the global sustainability goals,” Woo says.
“The reason why it is important, or why mining operations look here, is they find it useful to reconcile their purpose and objectives, and the performance of the organisation against these goals.
“It enables them to say ‘we have a purpose and an objective or strategy to focus on making change financial, socially and environmentally in these areas.”
But targeting these areas and implementing programs is just one stage of the process, Woo continues. He adds that companies need to also be transparent about the impact of the programs and become better at highlighting the effectiveness of their initiatives.
“There is definitely a step change in the awareness that there needs to be a lot more disclosure or analysis of it. And then disclosure of the impact that the organisations are making socially, environmentally and economically,” Woo concludes.
This article also appears in the July edition of Australian Mining.