Fighting climate change trumps supplying minerals for energy transition — report

The report found that globally, there are low levels of familiarity with companies in the mining, metals and minerals (MMM) sector.

Of all surveyed, only 15% could name at least one mining company.

The most well-known mining companies named are Vale, BHP and LKAB while the least well-known are Freeport McMoRan Antofagasta and CRH.

Popularity score: average

Globally, the MMM sector has a Trust & Like Score (TLS) – Caliber’s reputational metric – of 66 out of 100, which puts it on a par with the automotive and ehemicals sectors – and means it’s better perceived than the energy, banking and telecoms sectors.

“The sector’s middling reputation – on our scale, a Trust & Like Score of 66 is merely average – won’t raise many eyebrows either,” the authors said, noting extractive industries rarely win prizes for popularity or transparency.

Split perceptions

Most people have a better perception of the sector than they did five years ago, the survey found — 39% of respondents said that they perceive the industry to have a more positive societal impact and just 13% say that they think the industry has a more negative societal impact than five years ago.

“Our expectation was that the industry would not have been seen to have been improving as much due to rising public expectations for companies related to their ESG performance and the very central position of the MMM industry in impacting climate change,” Søren Holm, senior advisor at Caliber said in an emailed response to MINING.com.

On average, MMM companies are perceived most favorably for their offering, ability to innovate, and leadership. Conversely, they are perceived less favorably for their impact on the planet, their relatability, and how ethically they conduct business, the report found.

Perceptions of the sector split on ESG — 40% of people have a very positive perception of MMM companies on offering and innovation while on average, 35% of people have a positive perception of MMM companies on ESG attributes, while 7-10% perceive them negatively – and most on environment.

What those surveyed pinpoint as serious issues for the sector to address are, unsurprisingly, reduction of carbon emissions and harm to people and the planet.

“[W]hat surprised us was the priority placed by respondents on the industry’s efforts to fight climate change over the industry’s ability to secure a steady supply of raw materials, “Holm said.

Most surveyed think the industry must do less environmental harm; with the sector’s use of water identified as the most serious issue.

“With a more transactionally bound group of informed stakeholders, we typically tend to see a sterner focus on delivering products, services, innovation, and bottom-line results rather than ESG-related metrics,” Holm noted.  

While 67% of respondents say improving efforts to fight climate change is at least as important or more important than ensuring a steady supply of raw materials needed for the green energy transition, 20% think it is most important for MMM companies to focus on fighting climate change.

Respondents say reducing the environmental impact of extraction is the primary issue to address — 38% of mention the negative impact on water usage and cleanliness as the most serious issue related to industry operations.

Global regulation?

Overall, 80% of respondents think regulatory levels should stay as they are or be increased — but overarching regulation on a global scale would be difficult to impose and enforce, as most mining companies are subject to regulation by jurisdiction.

“We don’t see a framework for a regulator with a global reach. From a reputation perspective, the idea of conforming to a set of global standards or regulations is a double-edged sword,” Holm said.

“Adhering to global regulations shows that the company wants to do as much as other companies, which will be a good signal to send to its stakeholders if the standards or regulations are perceived to be sufficiently ambitious in all market operations,” Holm said.  

“However, that is a difficult scenario to imagine, as there are different levels of maturity of MMM operations in different markets, different worker regulations, [and] different environmental laws,” he noted. “A global regulator would be desirable, but the imagined route to establishing such a body will be long and full of obstacles – the COP is a good example of the difficult path to deciding on global standards, ambitions, and targets.”

When asked what the mining industry could do to improve its reputation, Holm said showing a reduction in CO2 emissions, having no negative impact on the local population in connection with mining sites and extraction of materials, and showing how the industry invests in better technology for more efficient extraction are top of mind.

“The industry’s low familiarity also presents a problem for its reputation,” Holm said.

“An important and much-debated industry means that people unfamiliar with any company are basing perceptions on limited information. By communicating publicly and establishing clearer positions on topics of public interest, companies can take more control of how their reputations are shaped.”