Australian Mining spoke with DYNA Engineering general manager Thomas Greaves about how the METS company is responding to changing ESG practices in the industry.
When it comes to environmental, social and governances (ESG) practices, the resources sector understands that it cannot afford to avoid the issue.
Customers, employees, communities, stakeholders, custodians and regulators are increasingly expecting companies in the industry to prove they are getting better at implementing and managing their ESG policies.
According to the ‘Responsible Mining Foundation (RMI) report 2022’, 94 per cent of mining companies scored less than 20 per cent on 15 ESG metrics, with many found to be ineffective at tracking and reporting their management.
DYNA Engineering general manager Thomas Greaves told Australian Mining one of the biggest challenges for businesses in the mining industry is the management of pollution, including greenhouse gas emissions.
“As everyone becomes more aware of mining’s impact on the planet, ESG has turned the spotlight especially bright on this industry,” he said.
“Environmental policies to improve ESG include greenhouse gas emissions, energy and water usage, and climate-risk mitigation. And companies that effectively implement these policies often recognise benefits.
“As environmental factors are addressed, they may see a cost reduction in energy and water usage, operational improvements, and even develop better relationships with their customers, suppliers, employees and local community.”
When it comes to social policies, there are several that, if implemented effectively, can significantly strengthen a company’s connection with customers, employees and other stakeholders.
But implementing these policies is the tricky part. Although most companies have some level of controls in place, a weakness in any governance area can allow an incident to cause reputational damage, lawsuits, loss of social license to operate, and more.
Greaves said one of the most significant examples of DYNA’s ESG considerations was the recognition and introduction of its high-density polyethylene (HDPE) conveyor guards.
“The guards are made from environmentally sustainable HDPE, which in itself is recycled and recyclable, instead of the traditional high-energy-hungry and environmentally straining steel,” he said. “Our mining customers have supported these HDPE conveyor guards enthusiastically, in many cases supporting their own ESG initiatives.
“We have also invested heavily over the past couple of years in additional facilities and staff purely to enable us to add more sustainable HDPE products to our range.”
Greaves also pointed to DYNA’s work in certification against International Standards Organisation (ISO) in the three categories of quality, environmental, and occupational health and safety management systems.
“These certifications relate to the company’s activities in the design, manufacture, supply, inspection, and maintenance of conveyor systems and guarding, including related services,” he said.
Benefits of embracing ESG
Mining equipment, technology and services (METS) companies that can effectively incorporate and communicate their ESG practices can benefit from risk reduction and improved cash flow.
Those that don’t, on the other hand, may soon experience significant impacts to their businesses, including potential loss of customers and difficulties in attracting and securing employees.
Greaves said there was a connection between a company’s financial performance and its embrace of ESG considerations.
“The respected ‘McKinsey Quarterly Report’ back in November 2019 showed ESG linked to cash flow in five important ways,” he said.
“It facilitates top-line growth, reduces costs, minimises regulatory and legal interventions, increases employee productivity and optimises investment and capital expenditures.
“Every business owner and company director is interested in improving cash flow.”
DYNA Engineering will continue to support and implement ESG practices in its own operations.
This is, in part, because METS providers could decide to which prospective customers they would consider supplying their goods and services. This choice could be based on how well a particular customer accepts and applies an adequate level of ESG considerations.
Greaves said it was actually the reverse of the conventional process, whereby the customer selects its suppliers based on the product, price, availability or after-sale service.
“The reality being if they didn’t favour ‘yours’ they could simply go another supplier,” he said. “This should not be mistaken as a veiled threat; it’s simply an acknowledgement of what could very easily happen due to the accelerating surge of ESG considerations requirements swelling and gaining momentum globally, especially for businesses operating in the mining and mineral processing sectors.
“In a way, it’s similar to how some of the major superannuation funds are now making ethical considerations as well as financial ones when deciding where to invest members’ money. Or which brand of jogging shoes an athlete might select based on which country they were made in and that government’s policy on underpaying workers already in poverty.
“Companies operating in the mining and mineral processing industries can no longer take a ‘wait and see’ approach with ESG. Not only will it soon become a minimum acceptable expectation of every stakeholder, but understanding and adopting ESG practices can actually provide significant benefits for those companies.
“Fortunately, it’s not too late to get started transforming into a more sustainable and competitive business by truly embracing ESG practices.”
This feature appeared in the April 2023 issue of Australian Mining.