Enhancing sustainability in the extractive natural resources sectors, Jan 2013

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John Poulsen is a CSR and natural resources management specialist, with extensive experience from South and Southeast Asia. His work transcends numerous extractive sectors, including mining, forestry/plantations, and oil/gas.

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Enhancing sustainability in the extractive natural resources sectors, Jan 2013

  1. 1. SASIN, Bangkok, 17 January 2013 John Grynderup Poulsen
  2. 2.  Extractive sectors are significant drivers of the economic development of many countries Dilemma of massive demand and diminishing resource availability Increasing overlaps between resource exploitation and interests of the broader public (includng local communities) Often largescale and longterm operations penetrating and affecting many levels of society • Immense opportunity for these sectors to contribute to a sustainable foundation for the countrys future
  3. 3.  Forwho? – whose interests weigh highest? Hierarchical set of priorities Gradual and continuous improvement • Long-term sustainability reached through series of short-term improvements/benefits
  4. 4.  Spatial • Local (project site), Regional, National, International/Global • Contribution/effect of the project Temporal • Life cycle approach Trade offs among these Compromises
  5. 5.  Partly depends on the spatial planning/design of the operations, underpinned by three overriding objectives: • Maximizing efficiency of operations, hence profitability • Minimizing adverse and offsite social, ecological and environmental impacts and influences on local communities  Easier to monitor and manage adverse environmental and ecological impacts within a relatively small area  More effective protection and conservation of forests and biodiversity, including the ecosystem services upon which communities may depend • Maximizing social benefits to local communities and the environment upon which local communities depend
  6. 6.  Human rights Indigenous people Land acquisition Environment - land and water Social – benefits/costs to local communities, OHS, … Corruption
  7. 7.  Lack of clarity, ambiguity New and evolving laws and regulations, particularly aligning these with the national development priorities
  8. 8.  Establishing projects always requires substantial private/domestic/foreign (direct) investments Does sustainability affect the investment climate?
  9. 9. The company/corporation level Broader stakeholder values The country/national level Shareholder Values SE ‘External’ factors: national level Investment, FDI conditions, political stability, Market Requirements reputation (corruption, transparency, etc.)
  10. 10. Shareholder Values Broader stakeholder values SE Index of sust. Perceptions, PR, … CSR, Sustainability
  11. 11. Supply & Demand Stock Price Movements Economic Data Company AnnouncementsInvestor Sentiment Analysts earnings estimates
  12. 12.  Equator Principles IMF Performance Standards Business systems Certification, ISOs, …
  13. 13.  Often perceived as a risk, rather than an opportunity Tightly managed to ensure clear corporate messages Communication and stakeholder engagement are inextricably linked Corporate Messages • Tendency to avoid or hide sensitive issues, rather than address such issues head on • Multiple target audiences
  14. 14.  Strategic corporate messages and information effectively conveyed to intended target audiences/stakeholders Prioritizing information sharing and communication Appropriate means of communication for each target audience/stakeholder Preparedness for entering negotiations and discussions with stakeholders Means to reach stakeholders, and for stakeholders to reach the company Improving internal flows of communication
  15. 15.  Create a conducive atmosphere Ensure top level endorsement and support Work at multiple levels, both vertical and horizontal Create room for asking provocative questions, and embracing disagreement • Challenge and question conventional wisdom and biases Usually no lack of technical knowledge Explain risks to business and enterprise Targeted, personal discussions with key individuals
  16. 16.  Incorporating comprehensive environmental, social and governance perspectives • May add additional value to the production, through reputation and any market-driven demands • Will reduce risks for company reputation, through adverse impact on communities, environment, etc. CSR, including community development projects, as a means to reduce exposure to risk CSR approaches as a means to respond to and prepare for risks, i.e., build resilience CSR, including community development projects, as a means to offset any unavoidable negative impacts of operations
  17. 17. Comm. Dev.Internal Risks External
  18. 18.  As a means to buffer against local instability/ies Local instabilities can pose major corporate risks • Operational risks • Investments • Disturbances
  19. 19.  Understand scale-dependent impacts of operations • Cost and benefit analyses at multiple scales System dynamics as a means to build common understanding/vision, both within the organisation, and with external stakeholders
  20. 20.  Corporate messages on sustainability Strategy and policies for sustainability and CSR Align these with performance indicators of GRI and/or other global initiatives Internal awareness throughout the organization, vertical and horizontal, e.g., finance, HR, environment, OHS, ... Code of conduct Mainstreaming CSR business systems into the entire structure including through bilateral discussion with system managers (linkages)

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