ESG in mining: can software and data improve predictions and protection?

The mining industry is still one of the world’s biggest polluters, but it remains the cornerstone of global industry, and production is unlikely to stop anytime soon.

Improving operational efficiency has become the industry’s most popular way to reduce emissions as it tries to balance the need to minimize environmental damage with the desire to maintain productivity and profitability

Environmental management and ESG digital best practice mining are being monetized by data analytics firms.

Number Seekers aims to help miners make more informed production and supply chain decisions by reducing emissions and promoting environmental, social, and governance (ESG) integration. But will their efforts ever be enough to offset the environmental damage and footprint inherent in mining?

The Numbers Game

CRU, a business intelligence and consulting service for the metals, mining, and fertilizer industries, is one example of a number of companies using analytics to transform the industry’s carbon management.

The company relies on combining data from thousands of different sources, analyzing it, and creating insights that clients use to make short- and long-term investment decisions. Basically, the data analysis approach is almost exactly in line with the ESG criteria, as well as with the changes in the mining industry.
It has already launched a carbon emissions data tool that allows customers to calculate and visualize carbon emissions for more than
4,000 commodity-producing assets around the world, and its executives are aware of the importance of data for several companies in the mining industry. 

CRU CTO Will Blake said customers want data-driven insights that help them understand key market trends and make informed decisions.
“Decision intelligence and prescriptive analytics help us achieve this goal by helping clients better understand the commodity world and model the key variables, from production costs to carbon emissions, that affect investment decisions every day,” says Blake.

“Most of the time, our clients believe that decisions are made five, ten, or even twenty years in advance.” Through prescriptive analytics, we can provide them with predictions far into the future and an understanding of the optimal course of action based on that data.”

There is more at stake than the environment; data and ESG are, of course, important factors in company performance, and investors and industry leaders are more likely to look favorably on companies with a strong ESG mandate. 

According to research from the University of Oxford, 80% of companies have experienced positive share price returns with good sustainability practices. 

There’s a reason why data companies like CRU see a way to cash in on ESG data metrics. S&P Global Commodities reports that a natural resources forum in London in October heard miners prepare for new ESG and reporting standards as demand for minerals grows.
Standardization of guidelines by a set of ESG-focused organizations such as the Responsible Minerals Initiative and the International Mining and Metals Council may also be needed to increase the environmental and social acceptability of the industry, according to miners, traders, analysts, and sponsors at the event.

In addition, the EU recently approved a new directive on corporate responsibility reporting. Gillian Davidson, chairman of the sustainability committee of Central Asian Metals, a major producer of copper, zinc, and lead, told the forum that the mining industry “waits for regulation.”
As a result, the game has exciting interactions. 

On the other hand, global mining companies and investors see upcoming regulations that will increase their fears and demands for the ESG harmonization of extracts. However, data analysts see an opportunity to capitalize on this trend, while the green lobby hopes that a more sustainable mining sector is on the way, offering optimism for the future of the industry.

ESG in mining: 

The broader picture of information
The role of information producers can only grow. According to the International Energy Agency (IEA), there are significant risks associated with the ESG impacts of mining projects.
These include geopolitical tensions, armed conflicts, human rights, bribery and corruption, emissions, water stress, and loss of biodiversity. These types of impacts can undermine public support for mining projects and are increasingly scrutinized by the downstream industry, investors, and civil society.
Catch: According to the IEA, such controls could limit the supply of key minerals and metals, potentially derailing the clean energy transition. If properly managed, mineral resources can contribute to the country’s income and provide a decent economic livelihood.
But failure to manage these risks can also expose governments and companies to ESG-related regulatory, ethical, and reputational criticism. In theory, the right data can at best prevent or at least mitigate these risks when the impact of the data is realized.

business risk
Top 10 business risks and opportunities for mining and metals in 2023

Ernst & Young’s 2022 Top 10 Mining and Metals Business Risks and Opportunities Report 2023 contains truths that speak from the data. According to this, compliance with new standards and expectations will require miners to improve data availability, accuracy, reliability, and integrity. This is said to be done through the right analytics service providers.
EY also reveals that mining and metals leaders are focusing on digital investments to develop data-driven innovations based on evidence-based decision-making. 

Automation of process intelligence and mining are top priorities in the EY document, followed by the need for new ESG platforms to track metrics and report data.
More specifically, EY says that digital and data will play a key role in supporting miners to implement sustainability agendas, including a better understanding of assets and performance and improved energy and water consumption monitoring.

EC mentions how Garrick Gold Corporation integrated environmental compliance policies into a real-time operational information platform, helping the miner reduce environmental deviations by45%. 

In addition, EY argues that the right digital tools can help miners address the third emissions reduction challenge. Data analytics, smart sensors, and blockchain help better track, monitor, and manage the triple zone.

top esg issues

How data can help the real world

“Our dependence on the mining industry has grown significantly in recent years as the demand for transition minerals has grown rapidly to support our net zero journey, as they are a critical technology for renewable energy generation,” commented UN PRI Director of Social Affairs and Acting Chief Executive Officer Elena Espinoza.
It is worth noting that PRI is the leading supporter of responsible investment in the world.The PRI acts in the interests of its signatories, their financial markets, and their economies.

Launched in 2006, the PRI has more than 5,000 signatories managing more than US$121 billion. Many of these drive the flow of money into and through global extractive industries.
“The environmental and social impacts of mining have long been viewed as externalities, and the consequences have been demonstrated in tailings dam collapses around the world,” Espinoza continues.
“These tragedies have caused loss of life, long-term disruption to surrounding communities, and environmental damage, the extent of which is not yet fully understood.”
Espinoza argues that as such, it has become so important to address environmental and social risks and mitigate and resolve them when production processes are compromised in the global supply chain to make the transition “just.”
“Invested to support this journey, the Mining and Tailings Safety Initiative has worked to create a global repository, an independent monitoring system, and a global waste cleanup fund to increase the mining industry’s responsibility for waste management.”
“Furthermore, PRI’s initial initiative to promote human rights by mentoring more ambitious investors will focus on human rights in the metals and mining sectors in the first phase of action.”

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