Voconiq: De-mystifying the Social Dimension of ESG

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In the evolving landscape of modern mining, the spotlight on ESG (Environmental, Social, Governance) principles has intensified, and the industry has become quite proficient at improving their operational strategies and meeting ESG guidelines. However, when it comes to the ‘S’ in ESG, many mining organisations feel that the intricate community relations and societal impacts entailed pose challenges for data-driven assessment.

Unlike the clear-cut metrics available for environmental impact assessments or the structured frameworks defining corporate governance, the Social dimension of ESG remains under-developed. Understanding community sentiments, gauging the impact of mining operations on local groups, and fostering positive relationships often involves qualitative assessments, contextual understanding, and active engagement.

Social metrics are imperative for the tens-of-thousands of mining employees who have KPIs tied to a social licence to operate (SLO), and offer opportunity and differentiation through instruments like Sustainability-Linked Loans and Bonds (SLLs, SLBs). There are several challenges here, including what are fair, robust measures against which mining companies and their employees evaluate their success in managing social risk and improving social performance. Often, course measures are used that do not speak to the actual nature of the risk itself – they don’t often incentivise the right behaviours.

Voconiq has developed a community survey approach, translating sentiments into actionable data for companies. Their process collects and analyses community attitudes over time, fostering deeper understanding and facilitating engagement between companies and communities. This approach enables mining companies to address environmental concerns, mitigate social risk, increase trust, and integrate local voices for sustainable operations. Essentially, they are bringing the voice of the community into the company.

Founded in 2019 by a team of social scientists at CSIRO and spearheaded by CEO Dr. Kieren Moffat, Voconiq emerged from a decade-long research legacy, offering innovative solutions to enhance social performance within industries by harnessing advanced data analytics, engagement science, and tailored advisory services for mining companies.

Today, we're privileged to have a Q&A session with Dr. Kieren Moffat, CEO of Voconiq. Kieren is a dedicated social scientist aiming to foster meaningful connections among communities, businesses, sectors, and governments. Previously a Senior Research Scientist at Australia's CSIRO, he applies quantitative social psychology in diverse global industries, spanning 20+ countries, to enhance community trust and amplify citizen voices in impactful decision-making.

All functions in mining are watching the SLO space now – in part because Boards are paying more attention to these areas, and their connection with executive remuneration and staff bonus frameworks. ESG KPIs have been there for a while but “Social” KPIs have been quite limited, often with an internal focus (e.g., diversity & inclusion, safety) or a narrow external focus (e.g., reputation).

Sustainability Linked Loans are a very exciting means for aligning financial and community interests to drive performance, but the number of these that include an externally focused social KPI is vanishingly small per IFC reporting – maybe one or two only.

So, there’s a huge opportunity space for companies to differentiate in the eyes of the market and financial institutions, and see value created for shareholders through doing better in their relationships with communities.

Again, the learning journey is just starting. There are several mining companies that are seeing the value of more closely tying their social and financial performance through an SLL mechanism. One of the challenges we have worked through recently with a customer is developing social metrics that their financial partners will see are robust, fair, and acceptable for a coalition of banks participating in an SLL. This is really taking quantitative social data to a whole new level, and we see this as the next frontier for companies seeking to professionalise and elevate social performance to the same level as every other part of their business. 

There’s certainly been some pretty strident criticism of SLLs in that context but my experience with the banks involved in these transactions is that they are extremely focused on the outcomes that will be delivered against the KPIs set. They are also very quick studies of new approaches and, in our case, deeply appreciated the science-base that underpins Local Voices and Voconiq’s work more generally. It’s also on those companies like Voconiq that are in the thick of establishing robust social metrics to deliver against the promise of SLLs and similar mechanisms. In our work, transparency is very important – for communities themselves to see their own data and engage with it in conversation with our customers. It’s not only part of an ethical research approach but also good practice, and as we’re seeing with the rise of SLLs, good business. The opportunity to align company and community interests through a financial instrument like an SLL is just too important to let it pass the industry by.

Every major miner has their own challenging case study in where it all went wrong. It’s how they respond that matters, to ensure that impacted communities and individuals are meaningfully considered and looked after, and real steps are taken to ensure it can’t happen again. Having strong empirical evidence that social performance strategies are delivering the outcomes that companies and communities need, while also recognising and quantifying the level of risk a company is holding is exactly where we live every day. We bring the voices of community inside the companies we work with to help them listen effectively and know exactly where to focus to manage social risk and deliver lasting value for communities, regions, and nations. We built Voconiq to do that systematically and consistently across social and jurisdictional contexts to enable companies to ‘see’ their social performance effectively.

Ready to de-mystify the Social dimension of ESG in mining? Get in touch with Voconiq to empower your company's social performance, reduce risk, and drive lasting positive change in mining operations.