Mining companies globally are being urged to take an interest in managing their environmental, social, and corporate governance (ESG) risk.
In the mining sector, ESG risk is a massive issue for companies. This is largely because of the opacity of the mining supply chain. Supply chain risk plagues mineral and mining companies, and often they are unable to have full visibility over their value chains due to a lack of viable tracking.
Where is the ESG risk?
The problem with ESG lies in the convoluted nature of global mining supply chains. Many mining companies have good intentions but an inability to gain visibility over their vendors and mineral sources.
Of course, the resources that require company-wide ESG visibility can be exhaustive and financially draining. As such, this leads many companies to avoid it – so, where exactly is the business case for supply chain sustainability?
How will ESG practices help?
Other than the necessity of involving ethics and human rights in your supply chain for long-term sustainability, there are a few ways implementing ESG standards could help your company:
- Future standards
The mining industry is moving towards better ESG standards globally. Very soon, transparent reporting could be a necessity. Managing ESG risk in your company could set you ahead of the movement and protect you from any sudden demands.
- Saving cost and efficiency
While creating transparency throughout your supply chain might seem time-consuming and costly, it can, in fact, have significant short and long-term benefits.
Knowing your supply chain enables you to better know your company and that your supply chain aligns with your company values. It also helps you to identify any points of weakness or potential issues within the supply chain.
For example, a miner might implement a tracking system and discover that there is large amounts of resources being lost at one point in the supply chain. This could be due to a variety of things, not all of them nefarious. However, it’s important that the miner identifies where the product is going and mitigates the problem to avoid unnecessary costs.
- Reputational gains
A company’s reputation can heavily influence its success. Both supply chain partners and consumers may abandon or boycott your company if there is a significant issue with ethics and/or sustainability.
Regardless of company values, making sustainability and ethics key to your organisation will only improve your reputation. It shows that your company has empathy and global awareness.
How we can move towards improved supply chain ethics
There are a myriad of ways that mining companies can implement ESG – chief among them is implementing more advanced technology. This isn’t exclusive to large companies. Smaller companies can also implement technology within their supply chains, though they might not be able to boast an in-house team.
This could mean anything from using an ‘out-of-the-box’ platform, using a software-as-a-service product, or having a company create a bespoke platform for your company. Primary technologies that support supply chain ESG tracking are blockchain technology, artificial intelligence, and automation. You can read more about potential options for implementing blockchain in your company here.
The ideal solution is a platform that integrates several of these nascent technologies. Blockhead Technologies’ platform STAMP Supply integrates a variety of technologies, including blockchain, to create a streamlined and smart view over mining company supply chains.
Implementing advanced technology enables mining companies globally to ensure their adherence to ESG and optimise their time and costs. This can provide massive reputational value and help companies to advance their ethical and sustainable goals.