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.
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:
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.
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:
of global mining executives are planning to increase their long-term investments in sustainability and ESG initiatives
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:
Drive oversight and accountability for net zero across the organization by:
Embed net zero into your strategy to maximize value and build resilience in a changing climate. This means:
Structure the company to achieve net zero with an operating model designed to meet your targets. Key actions include:
Integrate net zero across the supply chain to build a connected, smart and efficient low-carbon ecosystem by:
Net zero will require significant investments in research, development and innovation. You’ll need to:
Demonstrate your willingness to finance net-zero transformation by:
Provide transparent and balanced information on your progress by:
Communicating your net-zero strategy
Telling your story in a clear and straightforward way
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
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.