Navigating the Main ESG Standards and Frameworks in the Mining Industry
30th July 2024
Contents
- Exploring ESG Frameworks
- Movement towards Consolidation
- 6 Key ESG Standards
- Navigating ESG frameworks is crucial
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A 2024 survey ranked ESG as the top business risk in the mining and metals industry. It is not just a risk but a top opportunity for the industry as ESG considerations become increasingly significant due to regulatory demands, financing standards, societal expectations, and legal challenges. ESG frameworks provide valuable guidance for navigating this complex and evolving landscape by standardising measurement and best practices. In this article, we unpack the most common ESG standards and frameworks in the mining industry, and how they can be used to avoid emerging ESG risks and drive sustainable performance.
Exploring ESG Frameworks for the Mining Industry
ESG frameworks for the mining industry provide a structured approach to reporting and compliance whilst enhancing transparency, stakeholder trust, and long-term value creation.
Frameworks and standards such as the Initiative for Responsible Mining Assurance (IRMA), the Towards Sustainable Mining (TSM), and the International Council on Mining and Metals (ICMM) can offer valuable guidance to mining organisations in their ESG initiatives, focusing on what is most important to them.
Understanding the nuances and overlaps between these frameworks is helpful for companies considering utilising these frameworks to guide their reporting and demonstrate a genuine commitment to sustainability.
Integrating these frameworks into business operations can help mitigate risks, improve operational efficiencies, and align with investor and community expectations.
Movement Towards Cross-Recognition and Consolidation
Before diving into the key ESG standards and frameworks in the mining industry, it is important to note the growing movement towards cross-recognition and consolidation of ESG frameworks within the mining industry.
This is exemplified by initiatives such as the Consolidated Mining Standard Initiative (CMSI) – explored below. This initiative aims to streamline and harmonise the various ESG standards to simplify compliance and reporting for mining companies. Currently, frameworks like the Copper Mark have expanded to include similar standards for Zinc, Molybdenum, and Nickel.
Efforts to align these frameworks are further highlighted by equivalency benchmarks established by ICMM against standards such as the Aluminum Stewardship Initiative (ASI), Copper Mark, World Gold Council Mining Principles and the Responsible Mining Index (RMI). These benchmarks help mining companies navigate the complex landscape of ESG standards and choose the most appropriate ones for their operations.
6 Key ESG Standards and Frameworks in the Mining Industry
Consolidated Mining Standard Initiative (CMSI)
The Consolidated Mining Standard Initiative (CMSI) is a collaborative effort under development between The Copper Mark, ICMM, Mining Association of Canada (MAC), and World Gold Council (WGC) to unify various voluntary responsible mining standards.
What does this mean in practice and what are the benefits?
In practice, CMSI is working towards consolidating the four existing mining standards into one standard, assurance process and multi-stakeholder governance model.
The purpose is to reduce the complexity of the current standards landscape, meet the needs of a wide range of stakeholders and drive improved performance and compliance efficiency on responsible mining at scale.
Benefits include streamlined reporting, reduced administrative burden, and improved industry-wide accountability, leading to better sustainability outcomes.
Find out more about the development process, who’s involved, and how you can get involved here.
Towards Sustainable Mining (TSM)
Towards Sustainable Mining (TSM) is a globally recognised sustainability program originally developed in Canada and administered in Australia by the Minerals Council of Australia (MCA). It is based on 10 Guiding Principles and aims to improve safety, environmental and social governance performance in the mining sector.
What does this mean in practice and what are the benefits?
In practice, TSM is implemented through a suite of protocols that mining companies measure and publicly report their performance against in annual TSM Progress Reports.
TSM provides 8 social and environmental performance protocols for mining companies to measure and report, to then be evaluated, independently validated, and publicly reported against 30 performance indicators. It includes a sharp focus on human rights.
TSM was the first responsible mining standard in the world to require site-level assessments with external verification and is mandatory for all companies that are members of implementing associations, such as the MCA.
Member companies commit to demonstrating continual improvement until they achieve good practice. Each year companies reflect on their performance and identify opportunities for improvement or key risks to address.
Benefits include enhanced environmental stewardship, improved community relations, and increased transparency, which lead to better risk management and stakeholder trust.
Usage in Australia
TSM in Australia will be administered by the MCA and will become a future expectation of MCA membership from 2025.
TSM is being implemented to support companies in demonstrating their commitment to sustainability, including effective engagement with Traditional Owners and local communities. The system includes protocols for managing biodiversity, tailings, water stewardship, and climate change, among other areas.
Click here to learn more and join the TSM.
International Council on Mining and Metals (ICMM)
The International Council on Mining and Metals (ICMM) drives collective action to enhance performance on key ESG issues. It has a set of 10 Mining Principles designed to maximise the industry’s benefits to host communities, while minimising negative impacts, to effectively manage environmental, social and governance issues. These 10 principles are closely aligned with the TSM’s principles, making it easier for those organisations who are members of one or both, to conduct their initiatives in line with both frameworks.
It should be highlighted the Assurance and Validation Procedure from members – also forms an important part of this framework. The Procedure mandates member companies to annually validate and disclose their adherence to performance expectations through self-assessments and third-party validations.
What does this mean in practice and what are the benefits?
In practice, ICMM principles guide companies in implementing ethical business practices, environmental stewardship, and social responsibility.
The benefits include improved operational sustainability, enhanced stakeholder engagement transparency and accountability, and alignment with international sustainability standards which help in maintaining a social license to operate.
The ICMM best practices approach focuses on a safe, just, and sustainable world through responsibly produced minerals and metals. Similar to the UNSDGs, the ICMM principles have sub-principles which provide more detail and measurable performance indicators.
Usage in Australia
The (ICMM) has a significant presence in Australia, with several key members operating within the country. As of now, there are major mining companies such as BHP, Rio Tinto, and South32 among the ICMM members based in Australia. Additionally, the Australasian Institute of Mining and Metallurgy (AusIMM) is an association member, representing over 14,000 professionals from 110 countries.
ICMM’s influence in Australia is considerable, as these member companies and associations are committed to adhering to the ICMM’s principles of sustainable and responsible mining practices.
Membership is via a 5 stage process – learn more.
Initiative for Responsible Mining Assurance (IRMA)
The Initiative for Responsible Mining Assurance (IRMA) is a certification program that sets comprehensive requirements for mines to achieve IRMA verification, focusing on environmental and social performance.
The IRMA Standard for Responsible Mining defines best practices for what responsible mining should look like at the industrial scale. It provides the list of expectations that independent auditors will use as the benchmark for responsible mines.
What does this mean in practice and what are the benefits?
In practice, IRMA verification involves rigorous assessments of mine sites against standards for worker rights, community engagement, environmental impact, and governance.
Benefits of reporting to the standard include increased transparency, stakeholder confidence, and market access, as well as enhanced operational sustainability and reduced risk. As the certification is audited it also gives reporting organisations a demonstrable rating and benchmark on performance.
Implementation of the IRMA Standard for Responsible Mining contributes to all of the Sustainable Development Goals (SDGs) and is highly aligned with seven of them.
Learn how to become a member and leverage IRMA’s responsible mining self-assessment tool MINE MEASURE.
Usage in Australia
There is no publicly available information on which Australian companies have used this standard.
GRI Standard for Mining
The GRI 14: Mining Sector 2024 launched this year, comprehensively addresses the sustainability impacts of the mining sector and meets broad stakeholder demands for transparency to provide mining companies with a unified set of metrics to report their impacts. The standard highlights the balance between the essential role of mining in supplying critical minerals and the need for accountability regarding environmental, community, and worker impacts.
The standard was developed through a robust multi-stakeholder approach and covers 25 key topics, promoting significant and sustainable practices.
The Standard aligns with general GRI reporting by providing sector-specific metrics and guidelines that complement the broader GRI Standards,
What does this mean in practice and what are the benefits?
The GRI Mining Standard provides a comprehensive framework for mining companies to measure, manage, and publicly report their sustainability performance.
The standard sets expectations for site-level transparency that reflect local impacts, helping stakeholders assess impacts and risks by location and specific minerals. It covers critical themes such as emissions, waste, human rights, land and resource rights, climate change, biodiversity, anti-corruption, and community engagement. Additionally, it introduces three topics of particular relevance to mining firms: tailings management, artisanal and small-scale mining, and operating in conflict zones.
The benefits of using the GRI Mining Standard include enhanced environmental stewardship, improved community relations, increased transparency, and better risk management. These advantages together foster trust among stakeholders and ensure sustainable operations.
GRI 14: Mining Sector 2024 Standard is now available for download and enters into effect for reporting on 1 January 2026, with early adoption encouraged.
Sustainable Critical Minerals Alliance (SCMA)
In 2022 Australia joined the Sustainable Critical Minerals Alliance (SCMA), a collaborative effort made up of Australia, France, Germany, Japan, the UK and the USA, led by Canada.
The alliance members, commit to high environmental, social, and governance (ESG) standards, focusing on sustainable mining practices that prevent biodiversity loss, protect species, and ensure safe working conditions for local and Indigenous communities.
What does this mean in practice and what are the benefits?
Members voluntarily commit to the development and use of critical minerals that employ a nature forward and collaborative approach, support local and indigenous communities, reduce GHG emissions, work towards net zero by 2050 and restore ecosystems by adopting requirements for reclamation and remediation to close and return mine sites to their natural state.
Additionally, the alliance accelerates the reuse and recycling of critical minerals, potentially reducing the need for new mines.
Usage in Australia:
Australia’s commitment is reinforced through government funding, policy initiatives, and international cooperation to ensure that the critical minerals sector adheres to sustainable and responsible practices.
Understanding and effectively navigating the myriad of ESG frameworks is crucial
ESG continues to top the list of business risks and opportunities in the mining and metals industry, which means understanding and effectively navigating the myriad of ESG frameworks is crucial.
Frameworks like the TSM, ICMM, CMSI, IRMA and SCMA provide essential guidance for standardising measurement and best practices. By integrating these frameworks into their operations, mining companies can enhance transparency, build stakeholder trust, and drive sustainable performance, thereby mitigating risks and aligning with the evolving regulatory, financial, and societal expectations.
In part 2. of this series we’ll unpack how to leverage ESG Standards to structure your ESG initiatives, minimise and manage risk and enhance sustainability to drive sustainable performance.
Interested in exploring which ESG Standards and Frameworks in the Mining Industry are right for you?
If you’d like to learn more, or need help on your ESG journey, decarbonisation or broader sustainability initiatives, please reach out to our experts, we’re here to help.
Learn more in our article on how to build a robust ESG strategy.