Challenge
The mining industry has faced growing pressure from a variety of stakeholders including governments, customers, investors and civil society, due to the significant environmental, social and governance (ESG) risks linked to the minerals extraction, processing and trade. Over the past two decades, responsible mining standards have emerged as a key mechanism to mitigate these risks and promote good practice in the minerals value chain. These standards are designed to address the most critical issues linked to mining, such as human rights, worker safety, well-being of local communities, impacts on the environment and responsible business conduct.
However, the sheer multitude of available assurance schemes as well as their diverging scope and coverage, combined with conflicting stakeholder requests and regulatory requirements, make the standards landscape very difficult to navigate, especially for companies with a global footprint. These challenges may put a strain on a mining company’s human and financial resources and present a reputational risk if there is not a robust strategy for the adoption of standards and clear stakeholder communication.
In 2022, a leading mining multinational sought RCS’ Consult support to develop a strategy for alignment with responsible mining standards that took into account the client’s unique set of circumstances. At the time, the company was concerned about the significant financial and reputational costs that an incoherent and uncoordinated approach to third-party assurance against relevant standards could have inflicted on the organisation.
Solution
RCS conducted a comprehensive mining standards benchmark and gap analysis that captured the nuances of this intricate landscape. Applicable standards such as IRMA, TSM, and Copper Mark, among others, were compared against a set of criteria to determine the standards’ strengths and weaknesses considering the context of the client’s global operations. On that basis, and in coordination with the company’s management, our team developed a standards evaluation tool that supported the decision-making process on the standards adoption, and informed the company’s strategy by providing a roadmap with timelines and priorities for implementation.
RCS is also providing ongoing intelligence on the ever changing landscape of due diligence obligations and evolving standards. This comes in the form of regular updates on the latest developments in responsible sourcing regulation and mining standards, briefings on risks of non-compliance, industry association initiatives, and other ad-hoc analysis.
Impact
The mining company has now adopted a systematic approach to mining standards and frameworks that allows optimal and coordinated business decisions throughout its worldwide operations. This has enabled the company not only to save financial costs across its global activities, but also to minimise reputational risk and crucially, get internal buy-in on its standards strategy.
Besides a greater awareness and acceptance internally, the company’s robust and consistent mining standards approach has also allowed to strengthen engagement and communication with external stakeholders.
