The mining industry has been leading the charge when it comes to environmental, social, and governance strategies, and specifically, ESG reporting. This is because of the nature of the industry on the environment, as well as its reliance on human labour - making human rights, health and safety at the core to the industry. Further, mining-specific legislation such as the Mining Charter and the social and labour plans (SLPs) mines have to complete every five years, are entrenched in the wider spirit of ESG. Over the past few decades, the sector worked to ensure and prove environmental compliance and human dignity in its operations, prioritising stakeholder over shareholder value.
What is ESG?
ESG and the United Nations’ (UN’s) Sustainable Development Goals (SDGs – we’ll get to these later) are closely linked, as they are derived from the same organisation.
A UN Global Compact conference, hosted in Switzerland in 2017, was the first to formalise requirements for ESG criteria into financial evaluations for companies. These were based on the premise that “a better consideration of environmental, social and governance factors will ultimately contribute to stronger and more resilient investment markets, as well as contribute to the sustainable development of societies”.[1] It was essentially a call to companies in all sectors to incorporate transparent ESG reporting into their core businesses, as well as on investors to reward those that were doing so.
Although often seen as one concept, each element of ESG has its own requirements and methodologies for reporting and problem solving. Unlike the SDGs, however, ESG is more corporate facing in that it focuses directly on an organisation’s operations and how they affect each of the elements, as well as the communities surrounding it.
What are SDGs?
The UN’s SDGs were covered in-depth by Samantha Steyn, business development and strategy director at YES, in our Heritage Day blog. In a nutshell, the SDGs (published in 2015) are a holistic blueprint for achieving a peaceful, prosperous, thriving future for people, planet, and all other creatures that live on it.
Companies have started to select specific SDGs that align with their overall CSI objectives and business strategies, and have started reporting on their progress on achieving the targets set out by the UN.
Why is ESG reporting so important?
ESG (environmental, sustainable and governance) strategies and reporting have become more and more important for investors and customers alike. The advent of ESG investment indices such as FTSE Russell, RobecoSAM, MSCI and most recently, the newly published JSE guidelines, has shown that those buying both stocks and/or products care about a business’ external environmental and socio-economic impact, as well as internal governance structures that affect people, planet and processes.
These indices are also based on understanding and analysing what future investors and customers want out of the private sector. For example, 84% of women and 90% of millennials in the US have indicated a preference for sustainable investments. As these two groups are forecast to inherit nearly US$60 trillion as a result of wealth transfers in the coming 15 years, it just makes good business sense to incorporate sustainable practices into your business' strategy.[2]
What is ESG in mining (specifically in South Africa)?
The South African guideline for the reporting of environmental, social and governance (SAMESG) is based on and supports the international SAMECODES through encouraging JSE listed companies to publicly report and provide information on their ESG strategies. For mining in particular, there are very specific indicators these organisations should be reporting on in order to extend their social licence for operating, and to be compliant. However, commitment to SAMESG has been sparse. Indicators include, but are not limited to, the following:
Incorporating SDGs in mining ESG often looks something like this:
How YES can help with ESG strategies: The turnkey solution
Integrating with YES for improved impact, It’s about more than jobs: The turnkey solution
The YES turnkey solution works with 33 YES-vetted host partners across South Africa to place youth. If a corporate cannot place youth in their own organisation, they have the option to place youth with our host partner. The host partners are generally NGOs working in high-impact sectors communities, which means youth do not have to travel far for work and they can play an important part in building their own communities.
Some sectors YES host partners work in
Essentially, your mining company can use the creation of youth jobs to also impact social, environmental and economic issues that align with your holistic ESG/SDG strategies - meaning your business can create critical youth jobs in sectors that are relevant to you.
The turnkey solution is a true one-stop solution for organisations looking to make all of the impact with none of the admin. The host partners are not only responsible for hosting youth, but also for recruiting, screening, and supervising the youth, as well as facilitating absorption on behalf of the corporate.
Creating youth jobs in sectors that build economic, social and environmental stability in communities (through the turnkey solution) is an effective way to systemically and holistically reach your ESG goals, and uplift and empower communities beyond mining.
How YES helps mining companies deliver on their SLPs
The Local Economic Development (LED) Plan, which forms part of a mining company’s SLP, ensures that these companies contribute to the development of communities where activities take place and where workers are recruited.
Through the turnkey model, YES helps capacitate local businesses, schools, clinics and NPOs with dynamic young people who are eager to learn and grow their careers. This feeds into poverty eradication and upliftment of communities and economies beyond the mines these towns surround.
This model is becoming more and more popular in the mining industry as it assists these organisations in delivering on their LED plans.
Join the movement
Over 2,000 corporate partners have signed onto the YES programme. Together, we’ve created over 78,872 work opportunities for youth with no government funding.
Co-create a future that works.
[1] The Global Compact, Who Cares Wins: Connecting financial markets to a changing world, June 2004
[2] Jeff Glitterman and Paul Ellis, ESG data drives demand for sustainable and impact investing, August 2019
Amendment to the Gazette