Translating responsible business into practice
As momentum builds around the imperative of transitioning to a low-carbon global economy, governments are beginning to define more robust environmental, social and governance (ESG) expectations through regulation.
Through these new regulatory schemes, governments are outlining their core priorities when it comes to embedding ESG in corporate structures and supply chains: reducing greenhouse gas (GHG) emissions, creating more robust due diligence measures, and improving corporate transparency through enhanced ESG disclosure reports.
Advancing responsible production
These priorities form part of a wider focus on the need to promote responsible production through a holistic approach to standards setting across the whole range of ESG issues. This reflects the growing recognition from governments, industry and regulators that production standards across the supply chain have a profound impact on the communities and the environment within and around which industry operates.
In this context, the Copper Mark is working with participants across the copper supply chain to develop their understanding and management of the ESG risks associated with their operations.
This has included identifying gaps in training and policy awareness among staff, supporting enhanced understanding on sites about best practice production and business standards. Another key aspect is identifying areas for development, particularly across greenhouse gas emissions reduction, business relationships, tailings management and due diligence in supply chains.
These are some of the core issues around which market demands are evolving. By embedding these new market expectations across The Copper Mark standards, the framework requires participating sites to keep pace with rising standards to retain or earn The Copper Mark.
For example, 29 Copper Mark participants have publicly available targets for their GHG emissions reductions and several sites in the framework are working to fully meet the Copper Mark’s Criteria 15 on GHG emissions. The Copper Mark is engaged with an additional five participants to fully meet Criteria 31 on Due Diligence in Mineral Supply Chains, ensuring their processes for risk identification and mitigation meet international best-practice standards.
This holistic approach to site assurance—covering the full range of ESG issues—provides end-user companies with the confidence that the copper used in their products has been mined and processed responsibly. The Copper Mark also works to enhance transparency throughout the copper supply chain, supporting end-users’ own due diligence processes and requiring sites throughout the supply chain to make their own processes increasingly robust.
The Copper Mark’s Theory of Change
At its core, The Copper Mark’s Theory of Change recognizes that the copper industry has a responsibility to improve the lives of those most directly and immediately impacted by their operations.
Research from the Sustainable Minerals Institute at the University of Queensland has underlined this imperative with findings that provide a snapshot of the challenges ahead for the copper industry. Of the top 300 undeveloped copper orebodies globally:
- 47 percent are located on, or in close proximity to, Indigenous Peoples’ lands;
- 65 percent are in high water risk areas; and
- 65 percent are located in, or in close proximity to, biodiversity conservation areas.
These statistics reflect the emerging tension between the implementation of increasingly robust, ESG-focused regulatory requirements and the need to increase global production to ensure the supply of copper can continue to support and accelerate the green transition. Understanding the supply chain to identify and manage the associated risks is crucial to ensure the growing demand for copper does not come at the cost of human rights abuse and environmental degradation.
To support responsible sourcing and investment decisions, it is important to increase transparency in copper supply chains: participants in The Copper Mark are required to report publicly on their ESG performance using internationally recognized standards. Seven participating sites in The Copper Mark have, since joining the framework, published their first OECD Five-Step report, supporting the development and implementation of more robust processes of due diligence.
Promoting compliance and improving standards at the site level will require consistent engagement and monitoring, particularly to support companies as they navigate the challenges and tensions around increasing production in the context of rising ESG expectations from governments, investors and end users. Voluntary standards, such as The Copper Mark, have a vital role to play in providing the necessary engagement, enabling sites throughout the copper supply chain to contribute positively to the communities and environments within and around which they operate.