With environmental, social and governance (ESG) aspects often related to solving issues in an area or country, thinking is starting to shift away from managing the Covid-19 crisis and vaccine delivery to the just energy transition.
A panel discussion on ESG hosted during the first day of the Joburg Indaba on October 6 highlighted the variety of views stakeholders in the mining sector have on the mining industry’s contribution to a just energy transition.
The Minerals Council South Africa recognised that energy is a critical element of every aspect of human development, but also acknowledged that a just energy transition should take into account the socioeconomic implications of changes, taking care to leave no one behind.
The council says pragmatism must prevail during a transition to minimise disruptions to reliable electricity supply.
Minerals Council CEO Roger Baxter and president Nolitha Fakude stated that the council would like to see policy measures to accelerate the adoption of green hydrogen and renewable energy, as well as support for the development of new clean coal technologies.
Shareholder activism organisation Just Share executive director Tracey Davies, meanwhile, said no one knows yet whether a just transition is possible and that could only be determined by trying to achieve a just transition.
She deemed the biggest barrier to South Africa achieving a just energy transition as the balancing act between energy security and clean energy.
“Our over-reliance on coal will put us in a worse off space in terms of development in the long term.
“Tackling poverty, inequality and climate change are all interlinked. It is the developmental opportunity of our lifetimes to embrace an energy transition across all industries of the economy, not just in coal.”
Speaking to other ESG issues coming to the fore in recent times, Davies explained further that inclusivity and change in society could never be achieved if leadership itself was not inclusive and representative of the broader population.
She said the general 30% women representatives at board level-type targets were still too low and not reflective of the society we live in.
She pointed out that a major problem in the mining industry, holding it back from achieving ESG targets, was culture. Davies explained that it was one thing to attract more women into the mining environment, but another entirely to respect and value their input once they were there.
“Unfortunately, as the crescendo of ESG increases, so does ‘greenwashing’ whereby companies’ ESG efforts only look good on paper, without real change being effected,” she noted.
She suggested that one solution would be for ESG targets to be linked to the remuneration of people making these commitments and holding them accountable for reaching those commitments.
On the energy transition topic, Fakude mentioned that there was not a single solution to reaching net zero carbon emissions by 2050, but rather multiple pathways – some of which are in the mining industry’s control and others necessitating partnerships, including with funders.
“We have to accept that, over time, we will continue to have coal feeding the baseload energy grid, but we must continue looking at viable decarbonisation technologies.”
On the inclusivity topic, Fakude said a just energy transition also involved socioeconomic issues, such as inclusion of women and black people at all levels of decision-making and operations within a company.
She believed Covid-19 highlighted the fragility of South African society, with spiking youth unemployment and civil unrest amid the pandemic showing the urgency for businesses to consider inclusion when undertaking transitions.
Gold Fields CEO Chris Griffith said the company certainly saw a pathway to carbon neutrality, in terms of Scope 1 and 2 emissions by 2050 and had actively been advancing its renewable energy plans – in power generation and mine vehicles – to that end.
He explained that a just energy transition could not be achieved by just one or two initiatives, or technologies, and neither in just a few industries. Griffith believed the solution lay in a holistic approach with everyone coming to the party.
Griffith considered the increased scrutiny of corporate governance globally, as part of ESG, a good thing.
“There are many different metrics companies are being measured on, but people are beginning to understand the necessity of diversity, inclusivity and transparency, and I am confident that the mining industry can continue making inroads in this regard.”