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How BC miners can move from net-zero ambition to action

Climate change is a rising focus for the mining industry. According to PwC’s 2021 CEO Survey, 76% of global mining and metals executives said they were concerned about climate change and environmental damage, up from 57% a year earlier.

As the focus on environmental, social and governance (ESG) factors continues to rise, a growing number of mining companies, including BC miners, are setting targets to reduce their greenhouse gas (GHG) emissions. We’re seeing a range of commitments by miners, with some planning to reduce emissions by a certain percentage by a particular date, others looking to achieve carbon neutrality and a smaller number aiming for net zero by 2050. 

The Scope 3 challenge for mining companies

A major challenge in reaching net zero for miners is making it happen across the supply chain. The Greenhouse Gas Protocol breaks emissions down into three scopes:

  • Scope 1: Direct emissions, which at a mining company are those from its own operations.
  • Scope 2: Indirect emissions from inputs a miner purchases, like electricity.
  • Scope 3: All other indirect emissions in the value chain, such as end uses.

Few miners have made net-zero commitments to date, in part because Scope 3 emissions tend to be significant. The challenges are particularly significant for BC miners producing steelmaking coal. They may need to look at solutions like carbon capture and storage to reduce their carbon footprints. Those producing base metals, like copper, nickel, lithium and cobalt, have an advantage given their role in the low-carbon economy. But they’ll also need to prioritize reducing emissions, particularly since their customers will increasingly look to lower their carbon footprints across the supply chain.

 

 


The path forward for BC miners

While there are challenges, British Columbia offers miners some advantages on the path to meeting climate change targets. Our province’s carbon tax regulations, for example, keep miners on track to reduce emissions and ahead of other jurisdictions. British Columbia also offers miners access to low-cost hydroelectric power, which will be critical as electrified mines become closer to reality.

We know miners are ready to do their part. Our CEO Survey found 70% of global mining executives are planning to increase their long-term investments in sustainability and ESG initiatives. But many have yet to factor climate change into their strategic risk management activities, and we know this is a complex issue that will require major efforts by miners. So what’s the path forward?

One organization showing the possibilities is Microsoft Corp., which has worked with PwC to create a blueprint for companies as they move from ambition to action. The result is a nine-step journey to help companies achieve net zero:

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of global mining executives are planning to increase their long-term investments in sustainability and ESG initiatives

PwC's 2021 CEO Survey
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Ambition

Set your ambition in line with achieving global net zero by 2050 and limiting warming to 1.5 C. Define what this looks like for them by:

  • Understanding total emissions impact across the value chain
  • Prioritizing actions, like efficiency and electrification initiatives, to deliver your net-zero commitment
  • Developing a credible carbon offset approach, including measures to avoid, reduce and remove emissions

 

Governance

Drive oversight and accountability for net zero across the organization by:

  • Making sure those at highest level assume responsibility for delivering net-zero transformation
  • Establishing net zero and climate change as standing agenda items at the executive level
  • Assigning management oversight of net-zero transformation
  • Evaluating the net-zero incentives structure 

Strategy

Embed net zero into your strategy to maximize value and build resilience in a changing climate. This means:

  • Understanding how net zero is changing market dynamics and value
  • Assessing the capabilities required to succeed in a net-zero future
  • Identifying options for delivering a net-zero strategy
  • Developing a business case for net zero
  • Aligning the operating model to the net-zero strategy 

Enterprise transformation

Structure the company to achieve net zero with an operating model designed to meet your targets. Key actions include:

  • Establishing a clear structure of responsibilities and accountabilities to deliver net zero
  • Harnessing culture and people
  • Putting in place policies, processes and a measurement framework to achieve net-zero transformation
  • Engaging with customers
  • Accelerating technology and digitization programs

Supply chains

Integrate net zero across the supply chain to build a connected, smart and efficient low-carbon ecosystem by:

  • Applying existing supply chain transformation initiatives to emissions reduction efforts
  • Assessing emissions and climate impacts across the supply chain
  • Giving suppliers incentives to reduce emissions
  • Building supplier capacity to deliver net zero
  • Developing a connected and smart supply chain ecosystem among suppliers

Innovation

Net zero will require significant investments in research, development and innovation. You’ll need to: 

  • Embed net zero into corporate research and development and innovation activities 
  • Set aside financing to develop innovative net-zero solutions 
  • Invest in developing products and services that deliver net zero 
  • Unlock internal barriers to net-zero transformation 
  • Build an innovation ecosystem through partnerships 

Finance

Demonstrate your willingness to finance net-zero transformation by:

  • Developing your investment strategy 
  • Embedding net zero into corporate finance decision making 
  • Identifying and prioritizing sources of financing 

Transparency

Provide transparent and balanced information on your progress by:

  • Communicating your net-zero strategy 

  • Telling your story in a clear and straightforward way

Engagement

Engage with stakeholders to support change at pace and scale. This requires you to: 

  • Develop an engagement strategy 

  • Lead by example 

  • Influence the value chain 

  • Promote policies and behaviours that accelerate progress 

A time for action and ambition

These nine steps offer a framework for moving forward, which will be especially important for BC miners that have yet to take a hard look at the gaps they need to address. While we’ve seen the conversation around ESG matters and climate change advance significantly across the BC mining industry, we also know companies have some way to go in translating commitments into concrete plans.

Even so, we believe setting ambitious targets is the right approach. Many of the changes to come will require long-term commitments, which means now is the time for BC miners to look at the life cycle of their assets and reset their strategies for the shift to a low-carbon economy.

 

Contact us

Mark Patterson

Mark Patterson

BC Mining Leader, PwC Canada

Tel: +1 604 806 7160

Mike Harris

Mike Harris

Partner, Risk Assurance Services, PwC Canada Board Chair, ESG Practice and Net Zero Leader, PwC Canada

Tel: +1 604 806 7711

Sarah Marsh

Sarah Marsh

Partner, National ESG Report and Assurance Leader, PwC Canada

Tel: +1 604 806 7123

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