The gold standard: what can the industry learn from gold miners’ SDG efforts?

The Covid-19 pandemic has presented governments and industry with an unforeseen bump in the road when it comes to achieving part of the United Nations’ (UN) 2030 Agenda, the Sustainable Development Goals (SDGs), with disruptions to businesses and wider economies presenting something of a more immediate crisis to resolve.

The World Gold Council’s report on gold mining’s contribution to the UN SDGs makes the argument that the pandemic has reinforced the very premise of these SDGs. How the mining industry responded to the pandemic, both in terms of protecting their workforces and the wider communities around mine sites, could form a good model for advancing sustainable development beyond the current crisis.

The United Nations Development Programme (UNDP) has underscored the potential for the mining industry to take a leading role in achieving the SDGs since the goals were laid out in 2015. But what can the wider industry learn from gold’s sustainable development successes?

According to the World Gold Council, responsible gold mining and its related activities can have “a transformative effect on socio-economic development in countries where gold is found”. When gold miners operate to high social, environmental, and safety standards, gold can provide employment opportunities, improve local and regional infrastructure, and increase tax revenues. The Council says that in 2013, the gold industry made an economic contribution totalling over $171bn to the top 15 gold mining economies.

Noting the lack of a specific framework for how the gold industry can advance sustainable development, the World Gold Council in 2019 launched its Responsible Gold Mining Principles (RGMPs).

“Our member companies, the world’s leading gold miners, form partnerships with governments and communities to extract gold in a way that creates sustainable benefits for the people of the countries they operate in,” World Gold Council CFO Terry Heymann says. 

“The Responsible Gold Mining Principles, launched by the World Gold Council in September 2019, after extensive consultation with third-party stakeholders including governments, civil society and NGOs, set out an overarching framework as to what constitutes responsible gold mining.”

The World Gold Council hopes these RGMPs will become a “credible and widely recognised” industry standard. Developed with reference to the SDG targets and indicators, implementation of the RGMPs will also mean mining companies are delivering on a number of SDGs across the categories of global partnerships, social inclusion, economic development, and environmental responsibility.

Heymann continues: “The RGMPs are an ambitious set of 51 individual principles that cover all material aspects of environmental, social, and governance (ESG) related to gold mining.

“Implementing companies are required to publicly disclose their performance and receive external assurance on this disclosure. Gold mining that is undertaken in conformance with the Responsible Gold Mining Principles can support sustained social and economic development, consistent with the UN’s Sustainable Development Goals.”

A sector-specific framework may provide a more actionable route to delivering on SDGs. The 17 goals outlined by the UN in 2015 have been criticised for sometimes being contradictory, and research in 2018 noted the SDGs Means of Implementation targets are “imperfectly conceptualised and inconsistently formulated”. 

That report also said there is weak evidence connecting the Means of Implementation targets to the UN’s outlined Outcome targets. The World Gold Council’s RGMPs allow for a reconciliation of which SDGs gold miners can affect, and how they can affect them. While the International Council on Mining & Metals has a similar outline, there is no sector-specific guidance for producers of different materials, which could be a barrier to effectively working towards SDGs.

Historically, the mining industry has been a contributor to many of the challenges the SDGs were created to address: environmental degradation, displacement of populations, worsening economic and social inequality, corruption, increased health risks, and human rights abuses. Strides have been made across the industry in recent decades to mitigate, manage, and move away from mining’s historically negative reputation, and indeed the UNDP has claimed the mining industry could feasibly contribute to all 17 SDGs.

In the World Gold Council’s report on the gold mining industry’s contribution to the SDGs, World Gold Council CFO Terry Heyman wrote: “The SDGs are a roadmap to a better, more sustainable future. They were specifically designed to confront some of the most pressing global challenges of our time - poverty, inequality, climate change, environmental degradation, conflict, and social injustice. In 2020, we must review progress in the knowledge that the progress made in recent years risks being thrown in to reverse by the Covid-19 pandemic.”

For a mining company, there’s a business interest in working towards the UN SDGs. Increasingly, investors are conscious of the ESG practices of businesses and industries they invest in – from 2012 to 2018, total assets in sustainable investments more than doubled from $13.3tn globally to $30.7tn.

We’ve also seen major investment banks increasingly reluctant to fund projects that are seen as unsustainable; notably, BlackRock, in January 2020, announced plans to sell off its $500m in coal investments and increase its sustainable investments.

Mining companies committed to the SDGs also stand to benefit from improved relationships with governments and host communities, as well as better access to financial resources.

The effects of the Covid-19 pandemic on global business have been well documented, with the mining industry hit with temporary shutdowns or part suspensions of mine sites. The wider socio-economic effects, though, present challenges to national governments beyond the immediate economic rebound. The UNDP estimated that global human development - a combination of education, health, and living standards – could fall this year for the first time since records began in 1990.

When the world was thrown into disarray by the rapid spread of the novel coronavirus in the first half of this year, mining companies responded admirably despite the unprecedented challenges they faced with mine closures and other restrictions. Many embarked on local or regional initiatives, procuring testing equipment for mine workers and host communities, or donating funds to humanitarian efforts. In April 2020, World Gold Council member Newmont launched a $20m fund to support host communities, governments, and employees to defend against Covid-19.

The aftermath of Covid-19 will likely see renewed humanitarian pushes in the areas hardest hit by the pandemic’s economic impacts. Perhaps usefully, mining operations tend to be found in ecologically sensitive or less economically developed areas. It’s possible that the huge disruptions to the lives and livelihoods of people everywhere owing to this pandemic could effectively write off the UN’s 2030 target for the achievement of the SDGs. But mining companies always had a pivotal role to play in that target, and a renewed push across the mining industry for sustainable development could go a long way to getting those goals back on track.