The state of environmental sustainability considerations in mining

Abstract

In the Global Mining Initiative, the mining industry came together to understand the industry's role in the transition to sustainable development and to ensure its long-term contribution. The industry has since then come a long way and improved its sustainable development performance in many areas. But how far has the industry been considering environmental (“strong”) sustainability in its approach? And how does this compare to companies in other sectors and leading organizations such as the United Nations, World Business Council for Sustainable Development and the Global Reporting Initiative?

This paper presents results from a literature review, looking at how far the mining industry has considered environmental sustainability in its approach. It explores, if the current efforts of the largest mining companies are aligned with the efforts of companies from other industry sectors, as well as the position of leading organizations.

We conclude that the mining industry is not setting on the wrong sustainability paradigm at this stage, but is at risk of falling behind societal expectations on climate change and the leaders from other industries on natural capital considerations. The industry can improve by considering the Paris Agreement in its approach to climate change, considering natural capital as an industry, e.g. through working with the Natural Capital Coalition and more broadly by pro-actively thinking about what the consequences of “strong sustainability” would mean for their business models.

Introduction

Mining has for centuries, even millennia, been a source of great economic wealth but also social and environmental concern (e.g. Agricola, 1556). The “great acceleration” of economic growth after World War II (Steffen et al., 2015a) meant that demand for mineral resources was growing exponentially (e.g. Moser, 2016). This increase in production meant that mines became more in numbers and larger and so did the social and environmental consequences – leading to ever more conflicts- e.g. to name just two related to the largest mining companies in the world, BHP and Rio Tinto, Ok Tedi in 1984 and Bougainville Copper in 1989 - and putting ever more pressure on the industry to improve its social and environmental performance.

Based on these concerns, the CEOs of the largest mining companies came together in 1998 at the World Economic Forum in Davos and decided that a new approach to tackle these problems was needed. The Global Mining Initiative (GMI) was launched to define what sustainable development (SD) should mean to the industry and how it would contribute:

One of the greatest challenges facing the world today is integrating economic activity with environmental integrity, social concerns, and effective governance systems. The goal of that integration can be seen as ‘sustainable development’. In the context of the minerals sector, the goal should be to maximize the contribution to the well-being of the current generation in a way that ensures an equitable distribution of its costs and benefits, without reducing the potential for future generations to meet their own needs. The approach taken to achieve this has to be both comprehensive – including the whole minerals chain – and forward-looking, setting out long-term as well as short-term objectives. (IIED 2002)

Since then, mining has progressed in many ways including its understanding of sustainable development, its approach towards health and safety and towards community relations (see e.g. Buxton, 2012, Franks, 2015). But how far has the industry been considering environmental sustainability in its approach?

It was environmental problems, as a result of the “great acceleration” that brought the issue of environmental sustainability to the attention of the public. The Club of Rome published “The Limits to Growth”, which states that

“the earth's interlocking resources – the global system of nature in which we all live – probably cannot support present rates of economic and population growth much beyond the year 2100, if that long, even with advanced technology” (Donella et al., 1972)

The United Nations (UN) played a key role in developing the agenda. In 1987, the UN's World Commission on Environment and Development came up with a definition of sustainable development that today is still the one most often referred to:

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (WCED, 1987, paragraph 1)

What is interesting though is that the next sentences, which link sustainable development to sustainability, are hardly ever considered in these references:

“It contains within it two key concepts:

• •the concept of 'needs', in particular the essential needs of the world's poor, to which overriding priority should be given; and
• •the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs.

Thus, the goals of economic and social development must be defined in terms of sustainability in all countries - developed or developing, market-oriented or centrally planned. Interpretations will vary, but must share certain general features and must flow from a consensus on the basic concept of sustainable development and on a broad strategic framework for achieving it.” (WCED, 1987 paragraphs 1, 2).

Although it does not give a clear definition of sustainability (“interpretations will vary”) there is a link between development and ecological limits.

Five years later, one of the outputs of the UN's Conference on Environment and Development in Rio de Janeiro, the so-called Rio declaration (United Nations Conference on Environment and Development, 1992) put a stronger emphasis on human development relative to environmental protection.

The Rio declaration was key for SD to be modelled using three pillars or spheres on equal footing as shown in Fig. 1.

Further UN conferences with relevance were the Millennium Summit in New York in 2000 and the Conference on SD, or Rio +20, in 2012. At the former, the Millennium Development Goals (MDGs), a set of eight goals were agreed upon. At the later, the key result was the non-binding document “The future we want” in which it was agreed to develop the Sustainable Development Goals (SDGs, see below) to succeed the MDGs.

The above described UN processes highlight a key aspect relevant to the sustainability debate: The differentiation of strong vs. weak sustainability.

“Weak sustainability” can be seen as an extension of neoclassical welfare economics and is based on work by Robert Solow (e.g. Solow, 1986) and John Hartwick (e.g. Hartwick, 1977), were in principle human capital (infrastructure, education, living standards, culture, etc.) can substitute natural capital (water, air, mineral resources, but also ecosystem services such as pollination by bees or photosynthesis by plants, etc) (“substitutability paradigm”) and sustainability is achieved when the total stock of capital is grown or at least sustained for future generations.

In opposition to this view is “strong sustainability”, which in essence says that the buildup of human capital is not completely interchangeable with, but limited by natural capital. This means there are environmental limits that have to be considered in order to ensure environmental sustainability (“non-substitutability paradigm”) (e.g. Ayres et al., 1998, Neumayer, 2003). Neumayer (2003) states that science can't provide an answer to which sustainability paradigm is “correct”, but argues that “a combination of distinctive features of natural capital with the prevalence of risk, uncertainty and ignorance make a persuasive case for the preservation of certain forms of natural capital that provide basic life-support functions” (p. 4).

An example to illustrate the difference between both views is the use of coal in energy production, which would be limited under “strong sustainability” by climate change, air pollution, etc. but unlimited under “weak sustainability” if the benefits of cheap energy and jobs outweigh the environmental concerns. Whilst this is only one example it shows the importance of the paradigm differentiation to the mining industry, as it can have a significant impact – from operational water use restrictions (e.g. South African platinum mines in 2013), shareholder resolutions on climate change (as faced e.g. by Glencore in 2016) all the way to threats to the business model faced by coal mining companies.

We argue that, with the Rio declaration and the emergence of the three pillar model (“weak sustainability”), the sustainability aspect, expressed through environmental limits (“strong sustainability”) got sidelined. In recent years, this “strong sustainability” position or at least the parts of it related to natural capital as stated by Neumayer (2003) above is becoming increasingly important on the societal agenda, given pressures such as climate change and biodiversity loss.

Could the mining industry again be falling behind societal expectations (Tost et al., 2017) by setting on the wrong paradigm? To test this argument, we conduct a literature review into the current state of the global environment (Section 2), how this relates to sustainability considerations in academia and leading institutions (Section 3) and how it relates to the status in the mining industry (Section 4) and compares to other industries (Section 5) before presenting our conclusions in Section 6. With regards to environment, we select and focus on three issues considered highly material to mining including by the industry itself: climate change, water and biodiversity.

Section snippets

Climate change, water and biodiversity

The “great acceleration” has led to tremendous growth in the demand for mineral resources. More generally, it has let to tremendous global growth in GDP and population. Global population grew 5-fold to currently 7.5 billion and global economic output as measured by GDP grew more than 20-fold, as shown in Fig. 2 (from Krausmann et al., 2009).

On the upside, this meant big improvements to the living standards of a large proportion of humanity. On the downside, it meant a massive transformation of

Academia and leading institutions

Ecological Economics is an area of academic research most relevant in the context of “strong sustainability”. Influenced by the “The Limits to Growth” (Donella et al., 1972) and contrary to neo-classical economics, ecological economics sees the economy as a subsystem of the environment, the “Earth system”, which is materially a (more or less) closed system, only open to solar energy. In this view, economic growth “encroaches on other parts of the finite and non-growing whole, exacting a

Mining – weak or strong?

In December 2014 this journal published a special volume on the “sustainability agenda of the minerals and energy supply and demand network” (Moran and Kunz, 2014a, Moran and Kunz, 2014b). Considering all papers submitted, Moran and Kunz, 2014a, Moran and Kunz, 2014b propose a definition for “Operating Sustainably” at a single operational level and at regional scale. At the global scale they argue for “weak sustainability”:

“The tension between the extents to which capitals can be exchanged has

Other industries – weak or strong?

Subsequently, the mining companies are compared with large companies in other industries listed in Table 3. These companies are chosen because they are the leaders of their respective sector in the current DJSI (RobecoSam, 2016) – itself based on a “weak sustainability” position - and the sector has some relation to mining, e.g. as a customer, supplier or financier.

The criteria and process used are the same as described in section 4, although some of these companies do not consider all three

Conclusions

Whilst we find evidence for concepts supporting “strong sustainability” in academia and the WBCSD, they have not yet become mainstream in the leading institutions analysed, i.e. the UN - except for climate change (through the Paris Agreement) and biodiversity (through the Aichi Biodiversity targets). The UN's SDGs can be considered the current status of societal expectations and can be seen as a hybrid as described by Neumayer (2003): “Weak sustainability“ overall but “strong” in certain areas

‍