South Africa

Details

  • Service: Advisory, Risk & Compliance, Sustainability Services
  • Industry: Oil & Gas, Mining
  • Type: Survey report
  • Date: 2011/01/31

Mining

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Climate change deep underground for mining sector 

The mining sector has adopted a wait-and-see approach to climate change actions, with a small number having implemented sustainability measures and others citing the lack of a quantifiable business case to introduce any response to climate issues.
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Less than 20% of global mining sector players believe that climate change is a significant driver for new initiatives in their organisation, with almost 50% of the sector reporting that their organisations had not quantified the potential cost of climate change on their business. A small sector is also waiting for better market signals before making any decisions on climate change. These are some of the key findings of a recent survey into climate change and the mining sector. 

 

Titled Responses to the Climate Change Debate: KPMG Mining Industry Survey, the study also found that approximately 60% of respondents said that their organisations had not implemented structural changes to address climate change issues, while over 60% had not measured their carbon footprints and do not include climate change in dealings with suppliers and customers.

 

The survey covered North America, the Asia Pacific region, Africa, the Middle East and South America with close to 60% of companies working with market capitalisation of US$1 billion or more. Only 30% of the organisations are somewhat intending to change their policies to address the climate change issue.

 

Some respondents felt that a cautious approach was best or questioned the effectiveness of changes to address this issue outside of existing structures. Others felt that they were at an “awareness building” stage, with additional action planned for the future. Still others felt that the small size of their organisations made such core changes unsuitable.

 

The survey was conducted in light of the lack of consensus on climate change at the climate change summit convened in Copenhagen in 2009. “While over half (57%) of the organisations surveyed have not changed their structure or management to address climate change issues and are also not intending to take such initiatives, we believe that the situation in South Africa is much more positive,” says Ian Kramer, Head of Mining – Africa.

 

“Despite a growing number of scientists and government agencies arguing that climate change is a real threat, and the International Council on Mining and Metals (ICMM) recognising that sustained global action is required, the global survey findings highlight that there are significant differences in opinion among senior mining executives about the issue. In South Africa, however, a large number of mining companies are responding to the challenge by adopting climate-friendly practices.”

 

Kramer attributes South African responses to climate change to the diversity and maturity of the local mining industry as well as a growing awareness of the impacts of climate change in the local economy.

 

The survey also pronounces on the degree to which mining organisations have taken steps to tackle climate change and address new or proposed environmental regulations. These include the factors responsible for the lack of sustainability measures by the majority of mining organisations, an evaluation of climate change as a significant driver for new initiatives in the mining sector and an evaluation of the impact of market conditions on sectoral plans to address climate change.

 

“Some of the reluctance to move can be attributed to regulatory uncertainty. However, the release of the South African Green Paper (on Climate Change) gives the sector an opportunity to make its voice heard and address some of the issues that the paper seems to neglect in terms of impact on mining,” says Kramer.

 

The survey also makes a number of recommendations on the mining sector and its mitigation and adaptation to climate change.

 

Among these are the need to make climate change a strategic and fully integrated part of corporate policies, new initiatives, acquisitions, supplier relationships and business models. The development of strategies that identify and quantify opportunities and risks related to climate change is also recommended in conjunction with ongoing dialogue with stakeholders, suppliers and business partners.

 

Kramer adds that “There is an ongoing need to assess present and proposed legislation and their impacts on the sector and individual organisations”.

 

In addition, Shireen Naidoo, head of Climate Change and Sustainability at KPMG points to the need to adopt best practices for reporting in support of relevant regulations.

 

“While business generally is moving towards improvements in measuring, reporting and verification (on their carbon emissions and sustainability), we still have a bit of a way to go to get it completely right. I do believe that the South African mining sector is working hard to get its reporting standards compliant with best practice, however.”

 

Contact

Contact

Ian Kramer
Head of Mining - Africa
Tel: +27 11 647 6646
ian.kramer@kpmg.co.za

 

Carel Smit 
Head of Energy & Natural Resources Markets in Africa at KPMG
Tel: +27 (0)11 647 7065
enr@kpmg.co.zan

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