The risk to ESG with environmental data noncompliance

The risk of not being compliant with your environmental information has never been greater. Consumers are increasingly vocal about their expectations for how companies treat the environment. Boards and executive teams are under scrutiny to establish ESG initiatives and report against them.

Is your environmental monitoring ready for the spotlight?

Global survey shows miners concerned about ESG scrutiny

EY surveyed global mining and metals executives, mostly from the C-suite, for their annual business risk and opportunities report. ESG remains the number one risk for mining and metals companies in 2023, according to the survey results.

More than three-quarters of respondents (76%) are concerned about investor scrutiny on water management. Three in ten (31%) are worried about Scope 1 and 2 emissions and 15% say Scope 3 emissions are an issue they need to manage.

Miners say they are being pressured to improve ESG reporting and transparency. It’s incredibly difficult to achieve without a good way to manage the myriad types of environmental data miners are responsible for.

EY advises mining and metal companies can mitigate risk and maximise opportunity when they “extract more insights from data — better decisions start with data.” Miners are responding to that advice. Nearly four in ten respondents (39%) are prioritising ESG metrics and reporting, with 11% saying greenhouse gas inventory tools are a priority in the next one or two years.

Accessible environmental data for ESG reporting is lacking

An article in Canadian Mining Journal reports on the growing recognition that many mining companies lack accessible data to inform opinions and decisions about ESG. Being able to quickly answer the question, ‘Are we compliant?’ is proving far more difficult than it should be. There is no shortage of sustainability reporting frameworks but they often don’t have the right level of detail for accurate reporting to satisfy investors, stakeholders, and even employees. Miners need to better understand risks associated with:

• Biodiversity
• Ecosystem services
• Water – ground, surface, and potable
• Mine waste and/or tailings
• Air quality
• Noise
• Soil
• Meteorology
• Land disturbance
• Flora and fauna
• Energy
• Carbon footprint
• Greenhouse gas emissions
• Hazardous substances
• Rehabilitation activities.

The very real threat of “greenwashing”

While ESG aspirations were once looked upon favourably, desire is no longer enough. Reputational damage is no longer the biggest risk to lack of compliance. Companies and their boards are on notice that regulators are watching out for overinflated ESG credentials. The Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) have both said greenwashing investigations and related enforcement action are key priorities for 2023. The education period is over.

According to the Australian Institute of Company Directors (AICD), in the not too distant future greenwashing will be met with civil court actions and increasing penalties that are significantly more than current infringement penalties. As competition to gain influence with green credentials heats up, regulators are receiving referrals from companies concerned about what their competitors are doing — or not doing — about ESG. Companies that are making false or inflated claims about ESG will be found out.

What good reporting looks like

Major mining companies are increasing transparency of their environmental management to demonstrate compliance.

• Rio Tinto is reporting against the International Council on Mining and Metals water stewardship commitments.
• Fortescue is publishing extensive reports on how they safeguard natural systems like the climate, biodiversity, and water.

To achieve this kind of reporting, companies need help capturing, verifying, and reporting on all their environmental data across the entire organisation.

Why environmental monitoring is essential for ESG

If you’re not currently meeting your ESG obligations, introducing an environmental data management system into your operation is a good way to begin. It allows you have a complete understanding of all your obligations in one place. You need technology to support you as you transition to your environmental goals. For example:

• Do you understand your exposure to climate-change–related transition?
• Are you capturing all the operational improvements related to a low carbon transition and decarbonisation?

Software like EnviroSys allows you to get ahead of your environmental compliance so you can quickly and accurately report on your company’s renewable targets with confidence. Having trustworthy data protects you from greenwashing claims and gives your leadership teams critical information to make competitive business decisions around ESG.

Making a real difference to your ESG initiatives

While compliance and reporting are necessary to meet your ESG obligations, perhaps the biggest benefit of an environmental monitoring system like EnviroSys is a positive impact on the environment. Real-time detection of trends and issues with data visualisations lets your company proactively manage environmental risk and minimise damage before it occurs.

EnviroSys lets you meet the challenges of environmental data management by providing a single source of truth for all your environmental information. It handles the top concerns of miners like water, emissions, and tracking the direct and indirect environmental impact of operations. In fact, EnviroSys handles the complexity and scale of multiple types of environmental data, with everything you require to track, report, and stay compliant. With EnviroSys, you also have a seamless way to share your environmental data between all the necessary systems required for compliance, without the need for manual handling, including:

• Laboratories
• IoT devices and telemetry
• Business intelligence and corporate reporting
• Third-part software applications.

Discover Envirosys for environmental monitoring

Find out more at the EnviroSys product page. You can also watch the EnviroSys Overview video. Or contact the acQuire team to learn how you can minimise your ESG risk with better insight from your environmental data.