Interview of the Month: Noora Puro on GRI’s new mining standard (GRI14)
The Global Reporting Initiative (GRI) recently released the Mining Sector Standard. The latter is a comprehensive, global sustainability reporting standard that focuses on the impacts of mining. The Standard provides a common set of metrics that represents the broad information needs of stakeholders, providing a baseline for transparency in the sector. Below is our discussion with Noora Puro, Senior Manager of Standards at GRI, where she explains different aspects of this new standard.
The GRI recently launched its new mining sector reporting standard, why did you choose to focus on this sector?
The Sector Standards, which are the newest addition to the GRI Standards family, were introduced to increase quality, completeness, and consistency of reporting by companies in a sector. The first sectors to tackle were determined by the extent and severity of impacts – currently we have standards covering oil, gas and coal; agriculture, aquaculture and fishing; and mining.
While GRI reporting has been embraced by many leading mining organizations – with over two-thirds of the largest mining companies in the world using GRI to report sustainability information, the quality of reporting by the sector is widely considered inadequate and not up to stakeholder expectations. Especially the practice of aggregating information to company level has been identified by investors, academia, civil society and many others as not sufficient level of detail to reflect on key local impacts.
The importance of the sector managing its impacts well is also growing, with mining being at the intersection of the many crises the world faces: climate change, biodiversity loss, conflict, and inequality. Failure to manage impacts could have profound implications for clean energy transitions, fuel biodiversity loss, and jeopardize the wellbeing and rights of people affected by mining.
What kind of companies does this standard target? Or put another way, how do you define the mining sector?
GRI 14 covers organizations involved in exploration, extraction, and primary processing of all types of minerals, metallic and non-metallic, except for oil, gas, and coal – as these already have existing Sector Standards. The scope also includes organizations that undertake supporting activities for mining, such as transport and storage, when integrated into the mining organization’s core operations, as well as suppliers of specialized products and services to mining organizations.
Metal processing, commodity trading are excluded and will be covered by further Sector Standards.
What sustainability topics are covered within the standard? Are there some topics that are particularly unique to mining?
The standard addresses a comprehensive range of issues, listing 25 topics as likely to be material for most companies in the sector. They are roughly divided into five main groups: environmental issues, local community impacts, workers, transparency over payments and ethical business practices, and a few cross-cutting topics.
The environmental issues feature topics like climate change and GHG emissions, biodiversity, air emissions, waste and tailings management, and water. For local communities, economic contributions such as employment, procurement, community investments are covered, as well as social impacts on health and well-being. Topics also include specific impacts related to land rights and resettlement, rights of Indigenous Peoples and issues related to security personnel.
The worker topics include health and safety, training, wages, benefits, and diversity, alongside other fundamental rights at work, such as child and forced labor, discrimination, and freedom of association and collective bargaining.
The standard also has a cluster of financial transparency topics, building on GRI Topic Standards on tax, anti-corruption and public policy, but supplemented with disclosures from the EITI 2023 Standard, including on beneficial ownership, contract transparency, and project-level reporting of financial flows.
Finally, a few topics that cross-cut many dimensions of sustainability: critical incident management, closure and rehabilitation, and conflict-affected and high-risk areas. These all have potential to have serious impacts on communities, the environment, and workers. I should also mention gender which runs as a common theme across throughout the standard, with expectations for gender-specific management approaches and disaggregation of data per gender in various topics.
One topic included in the list is completely new to the GRI system and is quite unique to mining, which is artisanal and small-scale mining (ASM). The framing of the topic is on the interactions of large-scale mining organizations with ASM, which are often informal operations but important sources of income for many rural communities, especially in lower-income countries. Due to the frequency of these interactions, ASM is seen as an important stakeholder group for larger mines, and expectations are rising for large-scale organizations to manage these relationships well. Companies are also expected to mitigate negative economic or human rights impacts that might occur from the interactions, and in some cases even support ASM operators in improving their activities and help them formalize.
Mining companies can also be involved with negative impacts from ASM such as mercury pollution or child labor through their business relationships – meaning, if they purchase minerals from ASM, which is by some accounts expected to increase in the future.
Linking to one of SFG’s key impact themes, peace, does this standard have additional reporting requirements for companies operating in conflict-affected or fragile settings?
The standard lists a dedicated topic for operating in conflict-affected and high-risk areas, where there is a higher risk of human rights abuses, such as forced labor, child labor, sexual violence, and other violations of international humanitarian law. The expectation is that operating in these situations – or sourcing from organizations located in areas affected by conflict – requires enhanced due diligence. The topic puts a spotlight on the efforts companies undertake to identify red flags and potential risks, and enquires about adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
How will this standard be helpful to investors?
Investors are increasingly interested in information detailing the impacts of mining companies on the external world – not only how sustainability issues might affect the company’s prospects.
As we know, there is a major need for investments targeting climate solutions, many of which rely on minerals and metals. Investors know that the sector has traditionally been plagued with human rights violations, corruption, and environmental issues, and there is a certain nervousness about fast-tracking critical minerals projects without fully understanding the impacts down the line. As Adam Matthews, Chair of the Global Investor Commission on Mining 2030 pointed out during the launch of the GRI Mining Standard, investors need to have assurance that companies across jurisdictions are operating according to the same standards, and to assurance that they are supporting the companies that are adhering to the best possible standards, especially in the light of the low-carbon transition.
Investors have leverage with companies and can trigger improvements towards common global sustainability goals, but they need better and more granular data in order to fully understand the impacts and compare across companies, mine sites, and commodities.
We hope that investors will embrace this standard as the baseline for transparency for mining companies, to engage on the themes and topics and urge more disclosure, which will help direct efforts towards a more sustainable and accountable mining sector.
Download the standard: https://www.globalreporting.org/standards/standards-development/sector-standard-for-mining/
