Mining companies are embedding environmental, social and governance (ESG) considerations into project planning as early integration can help secure finance, manage risk and avoid costly project delays, says environmental and sustainability consultancy SLR Consulting corporate sustainability director Simon Clarke.

ESG has shifted beyond compliance, with investor expectations, community needs and environmental performance influencing project viability and long-term operational resilience.

He says companies that address these issues from the outset are better positioned to secure financing, maintain their social licence to operate and avoid delays.

While the mining industry seeks new sources of critical minerals and high-quality ore bodies, many of the most accessible deposits have already been developed, pushing exploration and project development into increasingly environmentally sensitive regions where biodiversity, water resources and ecosystem functions require careful management, says Clarke.

At the same time, climate change is placing additional pressure on water availability and quality, creating greater uncertainty, and increasing regulatory and stakeholder expectations. As a result, he says mining companies face heightened scrutiny from regulators, investors, communities and civil society organisations.

In this regard, Clarke says securing and maintaining a social licence to operate has become one of the defining factors in the success of new mining developments.

“Mining companies are operating in communities where land supports livelihoods, so stakeholder engagement is vital. Issues such as relocation, employment expectations and cultural heritage have become fundamental project considerations.”

As a result, he says financial institutions are applying more rigorous ESG criteria when evaluating projects.

“We work closely with investors and their requirements continue to become more stringent. Before committing significant capital, they want assurance that projects are being developed responsibly and that ESG risks are being managed effectively,” says Clarke.

Early Planning

Clarke says leading organisations focus energy and resources on the ESG issues that are most material to their business, rather than attempting to address every sustainability challenge equally.

Further, he notes that some sustainability initiatives now present clear financial benefits and highlights renewable energy as a notable example.

“Ten or fifteen years ago, large-scale renewable-energy projects were often viewed as too expensive. Today, many mining companies are investing because renewable energy has become a lower-cost option while also improving energy security and reducing emissions.”

However, not every ESG investment delivers immediate financial returns. Infrastructure designed to withstand increasingly severe flooding or other climate-related impacts, for example, may represent a significant upfront cost with benefits realised only over the longer term.

“The organisations leading in ESG understand which sustainability issues are material to their business and take a longer-term view of these investments. They are protecting their reputation, maintaining their social licence to operate and managing future risks, rather than focusing only on short-term financial returns.”

Clarke believes one of the most effective ways of managing ESG risks is to integrate sustainability considerations during the earliest stages of project planning. He says decisions made during feasibility and design have a far greater influence on project outcomes than changes introduced after construction has started.

Early engagement helps companies identify environmental constraints, culturally significant sites and community concerns before mine layouts and infrastructure are finalised. It also helps reduce costly project delays arising from stakeholder opposition.

Early planning also creates opportunities to incorporate lower-carbon technologies, such as battery-electric mining fleets and renewable-energy systems, while allowing engineers to design infrastructure that reflects future climate conditions rather than relying on historical weather patterns.



Given the breadth of ESG issues, Clarke says mining companies require multidisciplinary support that combines engineering, environmental, governance and social expertise. Technical specialists work alongside engineers on issues such as tailings storage facilities and waste-rock dumps, while social specialists engage directly with affected communities.

“The value comes from integrating sustainability thinking into all functions within the organisation from board to ground level, and not relying on the ESG team to address the issues alone,” he says.

Clarke also points to efforts to simplify sustainability reporting, including the introduction of the International Financial Reporting Standards’ (IFRS) Sustainability Disclosure Standards (IFRS S1 and IFRS S2), which provide a global baseline for sustainability- and climate-related financial disclosures. Within the mining sector, this trend towards harmonisation is reflected in initiatives such as the Consolidated Mining Standard Initiative, which aims to establish a single responsible mining standard supported by mining and metals advocacy group ICMM and other organisations.

He says the initiative addresses one of the longstanding challenges within sustainability reporting – the proliferation of standards and reporting frameworks.

While IFRS S1 and IFRS S2 are helping to establish a global baseline for sustainability disclosures, Clarke says having a common benchmark for the mining sector will improve consistency and make sustainability performance more comparable across organisations.

Unlike financial reporting, Clarke says sustainability data has historically been difficult to compare as organisations have measured and reported sustainability issues in different ways.