Voluntary Sustainability

Transcription

1 Session 6: Voluntary Sustainability Initiatives for the Mining Sector Tuesday October 17 th 2017

2 2018 SSI Review: Standards, Mining and the Minerals and Metals Supply Chain Jason Potts Matthew Wenban-Smith Matthew Lynch Laura Turley

3 Voluntary Sustainability Initiatives Public Policy

4 Voluntary Sustainability Initiatives

5 Tools for Sustainable Development Important to pay attention to Governance > Government

6 Governed by the Market Interface B Governed by Public Institutions Two Parallel Rule-Making Regimes Voluntary Sustainability Initiatives (VSIs) Interface A

7 Interface A public policy VSIs VSIs as responses to the expansion or contraction of national regulatory policy.

8 Interface A VSIs public policy Target identification Incorporation Broadening support for progressive policy intervention

9 Interface B Balance of regulatory and market forces for sustainable development E.g. Markets allocation of resources and risk E.g. Public policy sets the framework for market operation, correcting imperfections and externalities, enforcement of rule of law

10 Conclusions A mix of regulatory and market based instruments is desirable Tendency for number of standards to increase, in absence of coordination

11 Session 6: Voluntary Sustainability Initiatives for the Mining Sector Tuesday October 17 th 2017

12 IISD CARE analysis Coverage Assurance Responsiveness Engagement CARE Analysis Aims to identify and highlight differences between initiatives Goes beyond discussion of high and low standards A starting point for understanding how different initiatives embody sustainability principles in relation to governance and application, as well as narrow rules

13 Initiatives in the CARE analysis mine level standards; which aim to cover broad spectrum of sustainability issues; across major commodities

14 Large-Scale Industrial Aluminium Stewardship Initiative (ASI) Stone & Aggregates Cornerstone Standards Council (CSC) Artisanal & Small-Scale ARM Fairmined (FM) Bettercoal (BC) Fairstone (FS) Fairtrade Gold and Silver (FT) Initiatives in the CARE analysis International Council on Mining and Metals (ICMM) International Finance Corporation (IFC) Initiative for Responsible Mining Assurance (IRMA) Responsible Jewelry Council (RJC) Responsible Mining Index (RMI) Mining Association of Canada: Towards Sustainable Mining (TSM) Natural Stone Council (NS) The Forest Trust (TFT) Xertifix (XF)

15 Modification of CARE for mine sector analysis Based on previously established CARE methodology Coverage Indicators revised to integrate BGR work, and to split content from degree of obligation Revisions to ARE Indicators Creation of consolidated numerical indices for all ARE aspects

16 Before we go on Apples and oranges Moving targets

17 Health warning These are provisional findings Finalised data not yet reviewed by the initiatives themselves Scoring highlights difference higher scores are not necessarily better Aggregated scores can hide critically important detail

18 Content coverage 90% 80% BC IRMA 70% Coverage: 60% IFC FT ASI RJC content vs. level of obligation 50% 40% 30% 20% RMI TFT TSM NS ICMM XF FM CSC FS 10% 0% 0% 20% 40% 60% 80% 100% 120% Level of obligation

19 100% 90% 80% Coverage: content 70% 60% 50% 40% 30% ASI BC ICMM IFC IRMA TSM RJC RMI 20% 10% 0% 1. ENVIRONMENTAL 2. SOCIAL 3. Corporate governance and business practice

20 3.1 Business Ethics Coverage: 30% 20% 10% content 2.5 Community rights, relationships, health and safety 0% 2.4 Workers health and safety 3.3 Terms of trade (ASM and aggregates only) 3.2 Social and Environmental Reporting 1.0 Environmental Impact Assessment 100% 90% 80% 70% 60% 50% 40% 1.1 Biodiversity and Ecosystems 1.2 Water use, management and protection of sources 1.3 Waste and hazardous substances 1.4 Air emissions and dust 1.5 Noise and vibration ASI BC ICMM IFC IRMA TSM RJC RMI 2.3 Human rights 1.6 Greenhouse gas and energy 2.2 Employment conditions and benefits 2.1 Labour rights 1.7 Mine closure and land rehabilitation

21 Assurance: How does the initiative ensure that participants are applying criteria in the field? Assurance Descriptive elements (including traceability) Assurance Index: Audit model (third party emphasis) Audit frequency Auditor competency Independent oversight

22 100% Assurance Index 90% 80% 70% Assurance Index 60% 50% 40% 30% 20% 10% 0% ASI RJC TSM IFC IRMA ICMM BC NS CSC XF FS TFT FT FM

23 Responsiveness : How does the initiative respond to and adapt to local reality and changes over time? Responsiveness Continual improvement (model, incentives) Adaptability (localness, impact assessment) Contribution to capacity building Cost reduction strategies

24 100% RESPONSIVENESS INDEX 90% 80% Responsiveness Index 70% 60% 50% 40% 30% 20% 10% 0% RJC ASI IFC ICMM IRMA BC TSM XF NS TFT FS CSC FT FM

25 100% 90% 80% Continuous improvement (%) Relevance (Local, factual, temporal) (%) Capacity Building Resources (%) Cost reduction strategies (%) 70% Responsiveness sub-indices 60% 50% 40% 30% 20% 10% 0% RJC ASI IFC ICMM IRMA BC TSM XF NS TFT FS CSC FT FM

26 Engagement Engagement Board diversity (developed/developing, gender, stakeholder interests) Stakeholder accessibility (membership, standards development, disputes) Access to information (initiative reports, financial, board & cttees, standards procedures, comments, etc)

27 100% ENGAGEMENT INDEX 90% 80% 70% Engagement Index 60% 50% 40% 30% 20% 10% 0% IFC ASI RJC IRMA BC ICMM TSM CSC NS XF TFT FS FT FM

28 100% 90% 80% 70% Board Diversity (%) Stakeholder Accessibility (%) Access to information (%) Engagement sub-indices 60% 50% 40% 30% 20% 10% 0% IFC ASI RJC IRMA BC ICMM TSM CSC NS XF TFT FS FT FM

29 100% 90% 80% Assurance Index Responsiveness Index Engagement Index ARE Indexes Average 70% ARE Indexes: all 60% 50% 40% 30% 20% 10% 0% ASI RJC IFC IRMA TSM ICMM BC NS XF CSC FS TFT FT FM

30 Conclusions The standards exist how to maximise their impact? This is a rapidly evolving space Signs of increasing coordination between LSM initiatives No sign of coordination between quarrying/ aggregates initiatives

31 Session 6: Voluntary Sustainability Initiatives for the Mining Sector Matthew Lynch Tuesday October 17 th 2017

32 Market Study: methodology Structured interview with each initiative Desk based research on major mined materials Considered major mined materials by value, volume, energy use Considered conflict minerals as a special case of standards uptake in the market

33 Supply Chain Impacts of Mined Materials Materials All Iron and steel 3Ts Coal Aluminium Copper Gold Diamonds Key Issues Tailings management Community engagement GHG emissions (5% of global) Conflict funding GHG emissions (~20% of global, minus coking coal) Mercury emissions (24% of global) Acid rock drainage GHG emissions (1% of global) Acid rock drainage Sulphuric acid management Mercury emissions (47% of global, 37% from ASM) Conflict funding Cyanide management Conflict funding

34 Worldwide Uptake Current level of standards uptake as % of global production 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ASI ASI + ICMM Bettercoal CFSP Fairmined Fairtrade ICMM ICMM +CFSP ICMM + TSM RJC TSM

35 Major Drivers of Private Standard Uptake and Interest to date Risk/ Reputational management (e.g. tailings management, community engagement): often mediated through business association membership (ICMM, TSM) Legislation and public standards (e.g. regarding conflict funding, supply-chain due-diligence, mercury use) 2010 Dodd Frank Act (3TG) OECD Due Diligence Guidance (3TG) CCCMC Chinese Due Diligence (3TG) Kimberley Process (diamonds) Minamata Convention on Mercury (gold) To date, legislation has been the principle downstream driver of demand (RJC a possible exception) Emissions management (e.g. CO2-eq., mercury)

36 Looking Forward 1. Trends Industry associations (and others) increasingly use standards as strategic tools for risk/reputational management Emissions management (GHG, Hg) to drive uptake Downstream businesses increasingly driving mine level uptake (consumer electronics, green building, green infrastructure, automotive ) Emerging initiatives but evidence of coordination (LSM, but not aggregates or ASM)

37 Looking Forward 2. Emerging Initiatives ASI IRMA 10 years in development, backed by private sector steering committee members Anglo American, ArcelorMittal, Microsoft, and Tiffany & Co. Responsible Mining Index Responsible Steel Others

38 Looking Forward 3. Blockchain Initiatives The blockchain concept: a decentralized, public, permanent digital ledger that validates transactions Initial use-case was for currency (Bitcoin) Growing interest in its application to the trading of digital assets (emissions / credit trading) and to the tracking of physical products in supply chains For example: Everledger: one of several blockchain fabrics to track diamonds, with 1.6 million+ diamonds registered by 2017 Hyperledger Fabric: program for carbon asset development in China (carbon credits) Evolution or Revolution?