In the race to net zero, it’s clear that mining is critical. From wind turbines to electric cars, building and operating many of the hallmarks of the energy transition requires minerals that must be mined.

Last year, Palladium Director of Green Infrastructure Erin Leyson and her team pointed to legacy investing as a trend to watch for 2023. The term, and trend, refers to mining companies investing in programs that can sustainably support the communities in which they work, even beyond the time of a mine’s operation in the area.

There’s a clear shift already in the works, so where does that leave mining, and more importantly, mining communities for 2024?

“Scrutiny of ESG (environment, social, governance) is on the rise, especially from investors who are looking to mitigate climate change and de-risk their investments into critical mineral operations,” Leyson explains. “As there’s a doubling down on ESG, mining companies need more data and better reporting on ESG indicators.”

Reporting will continue to be a challenge for mining companies (as it is for any sector faced with a plethora of ESG indicators to report on), and Leyson adds that there are new reporting guidelines being published at a breakneck pace. But much like any other sector, it’s difficult to get everyone on board to report on specific metrics.

“Many companies are now looking for tools to track those indicators, such as the number and types of programs deployed to improve skilling outside of the workforce, number of families improving their incomes in a catchment area, farmers with improved access to markets. It’s easy to track inputs and outputs, but now they are trying to measure outcomes and that’s harder,” she says.

Though they’re implementing ESG programs and legacy investing, without a system in place to measure the results, it’s difficult to prove these programs are actually delivering on ESG imperatives. “We’re currently building geo-mapping and dashboard solutions for our mining clients, which will not only help them to better track their work, but more importantly, better speak about their impacts with communities and investors.”

Those measurement tools and the need for data indicate another smaller shift: the refocusing on external communications. “A lot of what we’re seeing now is that mining companies are turning outwards,” adds Leyson. “They’re reporting their progress to communities and investors to secure and maintain the two things they need: social license to operate; and capital to grow the operations that deliver energy transition metals to the world.”

As COVID-19 changed the global landscape, mining companies strengthened their supply chains and built out their workforces to ensure they could continue producing the metals the global economy needed. As the world has rebounded, mining companies are now looking forward and focusing on the aspects that will help them open new frontiers—legacy investing and telling that story to communities and investors.

Despite the shift in focus onto external stakeholders and better impact measurement, Leyson notes that there’s still a lack of focus on Indigenous groups. “It’s a situation really unique to mining because they’re some of the few companies around the world regularly interfacing with Indigenous groups.”

“We’re not seeing indicators built to evaluate that relationship across all the many ESG indicators out there, and I’m hopeful that in 2024, we’ll see the general ESG frameworks catch up and start to more regularly capture that complicated nexus of land, people, and minerals,” she explains.

The reality is that mining communities should be focused at the centre of any work with mining organisations because we, as a global economy, cannot successfully transition to a green economy without them. “I hope that 2024 is a year that continues to move us towards a reality of inclusive growth," Leyson says, "where companies, communities and the planet benefit from the move to a greener economy."

Contact info@thepalladiumgroup.com to learn more.