RMI Report

While “green-washing” has long been used to describe inauthentic environmentalism touted by companies, “SDG-washing” is now entering the vernacular. The term is used to describe the selective reporting of companies’ impacts, sans failures, in regard to achieving the United Nations Sustainable Development Goals.

It appears to be an issue of omission and one-sided reporting, according to the Responsible Mining Foundation, an independent research organization that supports the proliferation of responsible mining, which found that many of the world’s largest mining companies have continuously failed to mention any negative impacts that might impede achievement of the SDGs, the organization said, in its recent RMI Report 2020.

The report is an “evidence-based assessment” of the economic, environmental, social and governance (EESG) policies and practices of 38 large-scale mining companies, which means that its data helps paint a truly global picture — the firms operate in more than 780 mine sites, and together account for 28 percent of the world’s mining activity by value of production, according to RMI. The data was gathered throughout a one-year study, and approximately two months were spent reviewing and assessing various aspects of each company.

According to the International Labor Organization, mining remains one of the top three most hazardous sectors. RMF’s raison d’être is to support the principle that “minerals and metals mining should benefit the economies, improve the lives of peoples and respect the environments of producing countries, while allowing companies and their investors to make a fair and viable return.”

By the Numbers

Mapped to the SDGs and approximately 50 international initiatives, standards or guidelines related to responsible mining or corporate accountability, RMF’s methodology is thorough, to say the least.

RMF’s index is shaped by a specific analytical framework, comprised of six thematic areas: economic development, business conduct, lifecycle management, community well-being, working conditions and environmental responsibility. This is in addition to 76 individual indicators that were distributed among three measurement areas: commitment (follow-through on what they said they’d do), action (what they’ve done so far) and effectiveness (meaningful, measurable outcomes).

More specifically, each category includes an in-depth assessment into companies’ said “progress.” RMF explained, “Commitment indicators assess the extent to which companies have formalized their commitments on particular issues, assigned responsibilities and accountabilities for the implementation of these commitments, and provided resources and staffing to operationalize the commitments. Action indicators assess the extent to which companies have developed systematic approaches to address particular issues and disclose key aspects of their activities, and Effectiveness indicators assess the extent to which companies track, and report on, their performance in managing particular issues and demonstrate continuous improvement on these issues.”

The report also assesses 180 individual mine sites in 45 countries against 10 basic indicators of responsible mining, including local employment; local procurement; post-closure plans; community grievances; worker grievances; air quality; water quality; tailings management; and emergency preparedness.

A Red Flag

But for mining companies, “SDG-washing” is highlighting specific stats that give the impression of responsible mining, which “fails to present stakeholders with a true picture of the challenges the mining sector faces in its support of the SDGs,” according to RMF.

The disillusion surrounding the industry’s progress thus far in its quest for responsible mining has led to a “disconnect between company-wide policies and standards, versus actual on-the-ground actions at mine sites, where the impacts of mining are most evident,” RMF said, raising a huge red flag that encourages industry members to take a deeper look at companies’ claims versus reality.

Who’s Who

The list of mining companies in the report includes Anglo American; AngloGold Ashanti; Antofagasta; ArcelorMittal; Banpu; Barrick Gold Corp; BHP; Buenaventura; Bumi Resources; China Shenhua; Coal India;, Codelco; ERG; Evraz; Exxaro Resources; First Quantum Minerals; Fortescue; Freeport-McMoRan; Glencore; Gold Fields; Grupo México; Industrias Peñoles; MMG; Navoi MMC; Newcrest Mining; Newmont; NMDC; Nordgold; Orano; Peabody Energy; Polymetal; Rio Tinto; RUSAL; Sibanye-Stillwater; Teck; Vale; Vedanta Resources; and Zijin.

Hélène Piaget, chief executive officer of the Responsible Mining Foundation, said that the SDGs “provide a valuable societal framework for reporting and action on economic, social and environmental concerns, but an unbalanced emphasis on the ‘good’ that companies do may obscure the negative impacts, be they inherent or unintentional, that may impede the achievement of the SDG goals.”

Piaget added that a proactive approach toward the SDGs, in tandem with data transparency, can reap positive results for mining companies. “While the trust-deficit with society is recognized as the number-one risk for mining companies, the RMI Report 2020 acts as a prompt to the industry to eliminate the need to respond to multiple information requests. By proactively making EESG data available — starting at individual mine sites and in open data formats companies can help to build trust, limit risk, and show respect. In fact, more proactive data disclosure will reduce the demand for companies’ reporting.”

Great Expectations

Since the last RMI assessment in 2018, several large-scale mining companies have been “at the center of major controversies as mine tailings failures have claimed scores of lives, devastated whole communities and caused major environmental disasters,” RMF noted.

Afshin Mehrpouya, associate professor at HEC Paris and member of the Board of the RMF, said that “Such tragedies reflect very poorly on the sector as a whole and put into stark perspective companies’ claims of responsible mining. The industry must redouble its efforts to prove that it prioritizes broader ESG responsibilities over short-term considerations.”

And it can be done. Similar to the prior assessment, this year’s report noted that “mining can meet society’s expectations.” The RMF said “if one company were to achieve all the highest scores recorded” in each of the indicators, “it would reach more than 70 percent of the maximum achievable score.”

And similarly, the RMF said if one mine site “were to achieve all the highest scores seen for the asset-level indicators, it would score over 80 percent. All companies are encouraged to adopt more systematically the good practices already being demonstrated across the sector.”

Commitment Issues

Usually, good comes with the bad — and in the case of mining, it’s no different: The report noted a “modest overall improvement” by companies on many of the issues previously assessed in 2018. Albeit, “much of the improvement is due to companies making commitments, with markedly less evidence of progress in following up these commitments with concrete actions,” RMF said, adding that “the weakest results relate to companies’ efforts to track, review and act to improve the effectiveness of their actions on EESG issues.”

RMF explained, “So while commitments are a step in the right direction, the mining sector as a whole would benefit – both in terms of its performance and its trust-building with other stakeholders – from being able to demonstrate more consistent implementation of commitments across operational portfolios and across issues.”

The Bottom Line

And as it goes with most sustainability topics, transparency is critical — RMF said that not only was there little evidence of sharing mine-site-level information on issues of strong public interest for neighboring communities, workers, governments and investors, the organization was hard-pressed to find evidence of companies engaging with local stakeholders on important issues, inclusive of local procurement, grievance mechanisms or air and water quality, all according to RMF.

Of the 180 individual mine sites assessed, only one site scores more than 50 percent — the other 145 sites scored less than 20 percent, and 45 sites scored zero on all 10 indicators, the report said.

All in all, it boils down to the bottom line: “None of the companies [showed] consistent performance across the mine sites they own or operate.”

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