Creating transparent ESG reporting in mining

I4 Mining and Satarla have joined forces to create a solution that improves ESG reporting.

TCFD reporting is becoming increasingly prominent in the global mining industry.

The era of climate change reporting has arrived and it presents miners with big opportunities, according to I4 Mining and Satarla, who have joined forces to create a solution that improves ESG reporting.

It’s no secret that as technology and environmental standards evolve, mining companies are having to be increasingly transparent about their practices.

Investors are not only looking for opportunities and gravitating towards operations that are vigilant about their environmental, social and governance (ESG) outcomes, but also to those less deviant; ‘greenwashing’ is no longer an effective gambit.

Established by the Financial Stability Board, the TCFD (Task Force on Climate-Related Financial Disclosures) provides guidance on the information companies should disclose to support stakeholders including investors, lenders and insurance underwriters in appropriately assessing and pricing risks related to climate change.

TCFD reporting became mandatory for all large organisations in the UK at the beginning of 2022, and while different versions of the framework are being established in other jurisdictions including the European Union (EU) and US, it is becoming critical in accessing finance globally, meaning Australian organisations will soon need to follow suit.

“TCFD is a financial disclosure and therefore requires chief financial officers (CFOs) to become fully aware of their organisation’s ESG performance,” Satarla co-founder and chief executive officer Sarah Gordon told Australian Mining.

“This significantly helps the integration and valuation of sustainability, as well as establishing where the accountability for good ESG sits within a business.”

To support this evolution, Australian mining solution specialist I4 Mining and UK ESG and risk management consultancy Satarla have teamed up to create a real-time, automated solution that assists the mining industry’s TCFD and ESG reporting practices by enhancing data access and connectivity to ensure companies are getting a full and accurate picture.

Rayven executive director of I4 Mining, Phillip McBride, said the mining industry hasn’t always had the best track record when it comes to ESG performance.

“Anyone who’s been around an enterprise knows there’s targets set at the top which are then pushed from senior management right down to the user at the mine level, who needs to try and execute on them,” he told Australian Mining.

“Then, when it comes to reporting on how a company is performing, many hours are spent collecting the data manually from different data source systems, pouring them into spreadsheets and creating opaque formulae that give an output.

“If that outcome isn’t the desired one, you’ll sometimes see data manually manipulated until it does.”

Gordon said this often leads to the creation of a static and diluted report which ticks boxes rather than accurately reflecting what’s occurring on the ground

“TCFD reporting helps to change this. Transparency and accuracy are critical,” she said. “Science-based targets will begin to become the norm and those companies who don’t share this data will find it increasingly hard to gain access to capital.”

Today’s investors are too savvy and one step ahead of outdated ESG reporting practices, so what’s the solution?

“By using existing objective data and automating the process,” McBride said. “Through unifying data into a solution and then applying logic to analyse it, you can systemise expertise and deliver reports and dashboards that provide a transparent, real view of what’s actually occurring.

“Transitioning businesses away from a situation of misreporting to adopt a real-time objective solution gives transparency while enabling them to better manage ESG goals and determine what levers to pull to achieve them.”

Gordon agrees, suggesting companies that don’t make a change now risk being left behind.

“What you’ve got with TCFD is the need for behavioural change within organisations, underpinned by real data,” Gordon said.

“Many companies have been accused of ‘greenwashing’. The big shift happening now with TCFD is people saying, ‘No, we want to see real data. We want to see real performance’.

“So how do we get accurate insights into how a company is actually performing? This can be challenging for a mining operator, as they have many data sources and people on the ground, plus a need for information to filter up not just through the mining company, but to investors, regulators and different stakeholders.”

McBride said I4 Mining and Satarla could solve the challenge with technology, with the aim to plug into data sources across all functional areas of mining, from exploration through to product.

“We will use miners’ existing data … and alongside Satarla, put the technology and logic in – the formulas and the machine-learning models – to train the algorithms and deliver accurate, real-time measures,” he said.

“If you ask many companies now, ‘How did you produce that number?’, whether you’re talking about a daily production report or a sustainability report, the information is static and they’re rarely able to drill down to identify the data sets used to produce the outcome. We can change that.”

If Australian mining companies want to evolve, establish stronger international reputations, and access a wider pool of global investors, it’s paramount they become more diligent with their ESG reporting.

For some, it could be their only ticket to survive.

This feature appeared in the July issue of Australian Mining.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.