As investors, shareholders, and a broader group of stakeholders are increasingly taking environmental, social, and governance (ESG) factors into consideration, miners are taking steps to integrate ESG into corporate strategies, decision-making, and stakeholder reporting. As indicated by EY’s Top 10 business risks and opportunities for mining and metals in 2022 report, there will be increased stakeholder pressure over issues such as land management, biodiversity and water management. To add to this, companies are also under increasing pressure to take more responsibility for their impact on communities and go beyond their regulatory obligations. Miners can leave a positive legacy well beyond the life of the mine if they contribute to the economic and social growth of the regions where they operate.
At Business for Development, we believe there is a significant opportunity for the resource sector to align their community development programs that work to support economic and social growth, with their environmental programs, and accordingly support their commitment to net-zero emissions, biodiversity and leaving a positive legacy.
To mitigate the impact a mine can have on a community (especially in developing countries), many companies, as part of their social license to operate, develop agriculturally based community development programs. These programs can be aligned more strongly to environmental outcomes.
Agriculture can have a significant impact on the environment. While negative impacts are serious, and can include degradation of land, biodiversity and water, agriculture can also positively impact the environment, for instance by trapping greenhouse gases within crops and soils and even re-establishing biodiversity.
Here are two ways a mining company can hit the E in ESG through their community development programs which can have positive environmental impacts.
To protect natural ecosystems critical to biodiversity and climate change mitigation, food must be produced with ideally no net expansion in the area of agricultural land. Without action, cropland and pastureland are projected to increase by nearly 600 million hectares by 2050 to feed 2 billion extra people.
When mines close, most company’s focus on rehabilitating the land to its previous natural state. One of the greatest opportunities is to repurpose this land to economically empower communities through agriculture. Thus, reducing the requirement to clear land to grow food. Business for Development is conducting a pilot in South Africa, where we are looking at repurposing mine land and water to grow winter wheat. Mine land and water could also be used to grow biofuels, which means virgin land can focus on growing food crops.
Farming is a significant and growing source of carbon emissions. To limit agriculture emissions the sector must address the demand for 50 percent more food while reducing emissions by two-thirds from 2010 levels.
Governments and businesses are joining farmers and local communities, securing new agreements to protect nature and accelerate the shift to sustainable agriculture and land use practices by making them more attractive, accessible and affordable than unsustainable alternatives.
The mining sector can be part of this partnership ecosystem, working with governments and commodity buyers to support the application of Climate Smart Agriculture near mine sites, and as a result lining up whatever is produced by farmers to markets that wish to purchase traceable, sustainably produced agriculture. Business for Development has achieved this for Cotton On Group, who thanks to the Kwale Agribusiness Program, has secured traceable and sustainably produced cotton.
Business for Development has for over a decade advocated, piloted, developed and implemented community development programs in partnership with the resources sector. One focal area has been to create non-mine reliant economies through developing agribusinesses with communities. This has resulted in economic empowerment, social cohesion and the establishment of strong governance systems. If executed properly, these programs can also have a positive environmental impact – leaving a positive legacy for communities for generations to come.
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