How to integrate ESG for junior exploration and mining companies

August 15, 2023

Junior miners have specific challenges when it comes to ESG.

Implementation of an ESG strategy is becoming increasingly important for junior exploration and development companies. But just what does it take to ensure that your firm is adhering to the highest ethical, social, and environmental standards?

Mineral explorers and developers face unique challenges when implementing an ESG strategy. These include limited internal expertise, time constraints, and the need to demonstrate effective spending to investors. One way to overcome these obstacles is by following the structured approach of a management system.

Why a management system?

Every company, no matter how large or small, have some form of system to manage their legal, ethical, and fiduciary responsibilities, which are typically expressed internally as policies, codes, legal compliance and reporting requirements. A management system does not necessarily mean software, it is the set of processes or activities that are undertaken to ensure the company can manage regulatory compliance – to begin with. As the organization grows so does the complexity (and criticality) of the management system, necessitating the need for software. However, junior mining companies (particularly explorers) with their simpler systems are in the perfect position to start the integration of ESG, even without software.

When your company is small, integrating ESG into your management system sets the foundation for a strong company culture as you grow. It becomes ingrained, serving as a guiding thread throughout your organization’s journey.

The table below outlines each component of a “typical” management system and how  how to expand it to incorporate additional ESG requirements. You’ll notice the last row is an “addition.” While not an explicit element of a management system, communication is of utmost importance and should not be overlooked. Stakeholders have a vested interest in understanding the nature of the company operating on their land or within their community.

How to integrate ESG into each management system component.

Management System Components
Policies
Planning
Implementation
Checking and Corrective Action
Management Review
Continual Improvement
Communicate
Most junior companies do this...
Create policies to meet listing requirements and may also have Environment and OHS; or even Stakeholder Engagement Policies.
Undertaken a risk assessment - either informal or formal.
Establish operational procedures to ensure activities are conducted in compliance with legal requirements.
Collect data to monitor environmental performance to ensure regulatory compliance.
Reviews usually undertaken by exception (i.e., if there is an incident).
Usually there is nothing formal to facilitate continual improvement.
The majority of junior companies do not include ESG when they communicate company information. Some have web pages that acknowledge good environmental and social practices, but with no supporting information.
So do this as well...
Consider creating policies for Partnerships and Collaboration; Equity, Diversity and Inclusion; Climate Change and GHG Emissions.
Conduct a materiality assessment that assesses risks and opportunities associated with ability to conduct work in the region.
Integrate social practices into operational procedures based on the priorities identified by the materiality assessment.
Use the results of your materialilty assessment to determine what if any additional data is useful - always include GHG emissions, and potentially land clearing and rehabilitation.
Ensure leadership team are involved in discussions that include ESG.
Identify and address emerging issues as soon as practical and learn from others and best practices.
Create a webpage and add your Policies and Position Statements. Include what your intentions are, even if you don't yet have ESG targets that are measurable.
Tips & Tricks
Position statements, which take less time and don't normally required Board approval, can be created at this stage rather than policies.
If you're an early stage explorer do an internal materiality assessment only. If you're a developer then you should do a full materiality assessment.
Ensure that any policies or position statements have associated operational procedures. There is no point have a Biodiversity Policy if your exploration teams don't know about it. In addition, acting in a manner that is counter to your stated policies misleads and creates mistrust.
If you're monitoring then you'll have a database of sorts - usually an excel spreadsheet, which works well. It's a good idea to start thinking about adding GHG emissions data, but keep it simple - calculate using fuel invoices. Another tip is to calculate how much land you've cleared and then rehabilitated.
Consider setting targets, even for the exploration phase. For example, disturbed land is rehabilitated within a certain timeframe.
Keep abreast of evolving best practices in ESG - it is a rapidly changing space.
A simple webpage is all that is necessary at this stage. But be authentic, don't use boilerplate language - everyone can see through it anyway. And never make sweeping commitments that you may not be able to keep.

This method simplifies ESG implementation, making it manageable for small to mid-size companies. By integrating ESG into existing frameworks, there is no reinventing the wheel or addition of a separate workflow potentially adding a time-consuming and not always useful data collection burden on an already stretched workforce.

The management system framework offers a practical starting point. In addition, management systems aren’t rigid; they are designed to continuously improve and can easily be adapted if something changes. They are also designed to scale in alignment with the company, seamlessly integrating ESG into day-to-day operations from the very beginning. To ensure a relevant and effective ESG strategy, it’s important to regularly reassess your ESG approach, incorporate emerging issues and embrace best practices.

For a comprehensive and tailored approach to integrating ESG into your company’s management system, do not hesitate to reach out to us. We’re eager to share our expertise and support your journey towards a sustainable and socially responsible mining operation. Contact us today for more information.