A regular agenda item for senior leadership teams at many of the world’s most successful businesses is ensuring that the whole company is doing its best to help the planet be sustainable now.
While some businesses still see ‘being green’ as a tick-box exercise to distract from their misdeeds, at well-run businesses there has been for some time been the realization that they need to be as environmentally sustainable as possible and that ‘greenwashing’ increasingly backfires.
Few businesses face the extreme challenges that mining and extraction businesses encounter in ensuring their operations minimize environmental impact, given that the nature of mining inherently involves finding, extracting, processing and transporting huge amounts of material, often from some of the world’s remotest places.
All of these are going to have an environmental impact, often very large, no matter what steps are taken to minimize it – and yet, minimize it you must.
In the last decade, ensuring a business minimizes harm to the environment has become a key requirement for stakeholders – whether activists, investors, governments, NGOs, the media or most recently customers. It is also ethically the right thing to do.
Businesses that fail to invest in sustainability will find their customers moving away. Besides worrying about the reputational impact of being associated with polluters, many large organizations are looking for big carbon-neutrality gains by systematically going through their supply chain and switching to recyclables, low-pollution suppliers and sustainable alternatives. Various companies are already reaching beyond neutrality, striving for a positive contribution to the planet.
For instance, in the West, big retailers already expect their suppliers to operate as sustainably as possible and are further tightening their requirements, and this will soon be the norm in many other countries too. Many manufacturers are looking for alternative materials to use, new sources and invest heavily in recycling capabilities to minimize the requirement of original raw sources.
Only the most unwise and short-term of businesses would neglect this trend and willingly suffer the inevitable consequences from so many stakeholders of not doing the utmost to minimize its carbon footprint, erosion, sinkholes, contamination of soil or groundwater, harm to biodiversity and other impacts on the environment.
Becoming more sustainable requires a lot more than some new capital equipment, reducing flights and going paperless (as desirable as these are). Every element of the business operations and supply chain needs reviewing to identify the many adaptations most businesses need.
Indeed, with the huge impact of mining activity on nature, businesses in this sector have to try harder than other sectors if they are going to even get close to sustainability.
A large and sustained effort right across all functional areas is needed: exploration, innovation, engineering, marketing, sales, supply chain, purchasing, finance, and HR. There will be significant CapEx items, but the time of your people in identifying, implementing and sustaining the change is the biggest commitment.
Little will be achieved without the strongest possible commitment from the top. If it is not on your monthly executive agenda then you are not treating it seriously enough.
It is also vital to remember that behaviors at the top echo strongly throughout the business. For instance, if the only key metrics are around outputs like production quotas or line utilization to hit the quarterly numbers, then managers may seek to hit with little regard for environmental harm. However, if there are also targets around, for instance, reducing waste or saving energy then they will approach problems differently – providing senior management takes these targets seriously, of course.
In fact, not only will they behave differently, but if properly empowered they will start to come forward with innovations to cut waste, pollution, recycling options, energy saving and other environmental impacts. Unleashing this innovation not only helps your business make big gains, but heads off future problems by creating a culture where environmental concerns are considered and tackled before they become a crisis.
Such empowerment needs a structure, such as through the monthly review cycle if you use the Integrated Business Planning approach common at many mining companies. Either way, empowerment needs a framework to channel and foster it.
There are both threats and opportunities as the world economy decarbonizes and more businesses become active in achieving a neutral or even positive environmental footprint, and commitment at the top needs to be mirrored with getting closer to your customers to understand future market changes at the earliest possible opportunity.
New technologies and products driven by decarbonization require new components, and the demand for different raw materials is changing, sometimes dramatically. The surge in demand for the chemical components of Lithium-Ion batteries from the ramping up on electric car production is a current such example, as are chemical-free production processes, waste water treatment, and 3D bioprinting.
Those companies investing time in reducing their environmental impact while building relationships and intelligence to understand future raw material needs as the economy greens will be best positioned to benefit from the dramatic changes the world will go through over the coming years and decades.
For a list of the sources used in this article, please contact the editor.
Birgit Breitschuh is a partner at consultants Oliver Wight EAME, a leading consultancy that has been helping mining and other large international businesses successfully transform since 1969. Oliver Wight is a world leader in Integrated Business Planning consulting. With a different approach to other consultancy firms, industry experts transfer their knowledge to clients through coaching, mentoring and education workshops, thereby enabling ongoing self-improvement.