ESG: Track, Trace & Provenance – Where is the future headed?
The disappointment of COP26's lack of consideration of critical minerals and raw materials is difficult to hide. As world leaders gathered to discuss grand plans for decarbonisation, the focus was solely on the ambitions, with little consideration of the how, where and when this decarbonisation would take place. How will we extract all the necessary materials to create the green technology and associated infrastructure as responsibly as possible? Where will all these raw materials be coming from? Will we get all the raw materials out of the ground in time to make a difference and build the wind turbines, electric vehicles, solar panels we need for renewable energy?
How we source critical minerals will ultimately impact whether these green alternatives are truly green, or if they come with a heavy price tag of CO2 emissions and environmental damage.
On the Monday morning of the last week of COP26, the Critical Minerals Association hosted a breakfast chat with industry leaders to discuss how blockchain and provenance verification technologies are shaping environment, social & governance (ESG) expectations. Jeff Townsend, Founder, CMA was joined by Jamie Strauss, Founder, Digbee, Douglas Johnson-Poensgen, Founder, Circulor and, Nathan Dubrich, Head of Sales, Source Certain International.
You can watch the event here:
Discussion highlights
The discussion began with the guests’ perception of how the landmark COP26 climate talks of the last two weeks have developed the conversation around action on ESG. All agreed that the Glasgow summit has foregrounded the responsibility of the financial sector to drive ESG-compliant behaviour and meaningful reporting of progress at all stages of supply chains. Douglas Johnson-Poensgen noted that the engagement of the financial community seen at COP26 is a crucial step towards incentivising sustainable, responsible supply chains for a net-zero future.
Jamie Strauss noted that the mining industry’s strategic importance in the transition to net-zero was not highlighted enough at the COP26 talks and declarations, citing an enduring political misperception of the mining sector.
Mining is often perceived as a dirty undertaking. A misconception, which has led the UN Secretary-General António Guterres, to compare mining with “digging our own graves”. Ironically, only mining can dig us out of the climate change challenges and be the driving force behind sustainable growth.
Of course, perceptions are difficult to change, and cannot be shifted without industry’s collective effort to consistently demonstrate high ESG standards and tackle greenwashing. Nathan Dubrich agreed that there is now a wider shift towards actively re-gaining the public’s trust through transparent and most importantly validated ESG compliance.
Companies need to understand various ESG standards and their requirements, provenance of raw and processed materials, and the role of blockchain tracking through supply chains.
Self-assessed ESG reporting holds little value without independent verification which can be difficult due to the remoteness of site locations, and the difficulty of mapping the complex flow of materials and minerals from source to end product. Companies need to be asking the right fundamental questions about all parts of a supply chain, getting the right people on board, and ensuring independent assessment and technologies to validate ESG claims.
Collaboration between industry and government is essential to deliver action, whether through subsidising costs, making progress more achievable for mining companies, or incentivising management with the opportunity to be rewarded for leadership on ESG transparency. Responsible extraction is not just an industry challenge but a global challenge. Every company has a role to play as it feeds into critical mineral supply chains, from the upstream through to the downstream. Collaboration at every stage is the way forward.
More on our guests’ backgrounds in ESG
Jamie Strauss is the Founder of Digbee, a platform for responsible disclosure in the mining industry, bringing the sector together to understand disclosure and risk mitigation.
Douglas Johnson-Poensgen is Co-Founder and CEO of Circulor, which develops tech solutions for tracing responsible sourcing and inherited carbon in industrial supply chains.
Nathan Dubrich represents Perth-based tech company Source Certain International, which focuses on analysing provenance in supply chains for greater transparency and integrity in ESG claims associated with production and sourcing.
To read more about Environmental, Social, Governance and Critical Minerals, have a look at the Critical Minerals Association's 'Blueprint for Responsible Sourcing of Critical Minerals,' featuring case studies from Circulor, Digbee and Source Certain here.
Article written by Olimpia Pilch, Critical Minerals Association & Emma Maia Smith, MSc Environment, Politics, Society, UCL