Being ESG accountable
Several tailing dam failures in the past have caused wide-spread damage downstream. These dams, which are used to store slurry and wastes that come as by-products from the mining processes, are embankments made of earth and rocks and their failure can be catastrophic. These incidents have resulted in negative credibility of the mining industry putting its reputation and social licence at risk. Wider stakeholder community putting enormous pressure to reduce emissions, monitor environmental impact as a move to make mining more sustainable. Without sustainability, it is becoming difficult to secure funding as investors are investing with ethical and sustainable miners only. Governments have started implementing carbon pricing that has a significant impact on the operating costs of the miners. A recent McKinsey study found that Scope 1 and 2 emissions from the mining industry totalled two billion metric tons of CO2e in 2018.
The Towards Sustainable Mining (TSM) initiative, an industry standard, allows mining companies to turn high-level environmental and social commitments into action on the ground. TSM provides the tools and indicators to drive performance and ensure that key mining risks are managed responsibly.
At the same time, it provides communities with valuable information on how operations are faring in important areas, such as community outreach, tailings management and biodiversity.
It is mandatory for the members of Mining Council Canada (MAC) with operations in Canada to participate in TSM. In Australia, from 2025, members of the Mining Council Australia (MCA) will be required to assess and publicly report on their performance against TSM indicators. Governments, investors, manufacturers, and miners view TSM as an important tool to ensure metals and minerals are produced responsibly.
Implementing TSM will enable miners to build trust in the communities where they operate through the demonstration of the commitment to sustainable mining. The investor community believes social and environmental risk management can significantly improve a company’s long-term value. It is also seen as sign of a company’s management quality. TSM enables mining companies to identify, understand and manage risks resulting in reduction in costs and improved performance.
The mining companies are preparing to adopt the TSM ESG management system. In recent years, mining associations in Quebec, Spain, Finland, Norway, Botswana, Argentina, Brazil, Australia, Colombia, and the Philippines have adopted the program. Adopting TSM involves subscribing to the TSM Guiding Principles, which are backed by specific performance indicators that miners publicly report on annually and are backed by site-level assessments and external verification. TSM helps companies responsibly manage environmental, social, and governance performance and record and drive performance.
The framework’s guiding principles and protocols cover three core areas:
Communities and people: Indigenous and community relationships, safety and health, crisis management and communication planning, preventing child, and forced labour
Environmental stewardship: Biodiversity conservation management, tailings management, water stewardship
Climate change: Site-level targets and management
At its core, TSM establishes accountability, transparency, and credibility of the ESG performance of a mining company. Assessments are conducted at the site level are made public, and are overseen by an independent advisory panel.
