Footprints Found in Sustainability Reports

01 Mar 2005Archived News Energetics in the News

PUBLISHED: Ethical Investor Magazine.

By Meg Webster & Peter Haenke, Energetics Pty Ltd

The mining and resource sectors' early embrace of environmental - and now - sustainability reports is now generating valuable management information systems.

International and local pressure for companies of all industries to provide sustainability information and data is growing day by day. This pressure for sustainability reporting is growing rapidly in many countries, driven by the growth in ethical investment funds, sustainability reporting methodologies and registers, such as the Global Reporting Initiative (GRI), and government policies and programs.

In order to deliver this information businesses need to put in place systems to report on sustainability matters and more importantly develop plans and strategies to improve sustainability.

Over the last 20 years, our firm has helped companies focus on energy management, greenhouse reporting and environmental systems. But now we see a growing interest in sustainability across many sectors. In reporting, the initial attention was primarily on overall environmental reporting but has clearly shifted over the past 5 years towards sustainability reporting (see graph).

Sustainability is now a recognised part of business for many Australian industries, such as the mining and resources sector and a sustainability report is a tangible aspect to this recognition. And the mining industry has been quick on the uptake. For example the 'State of Sustainability Reporting in Australia' report released by the Department of the Environment and Heritage late last year shows that the mining and resources sector currently has the second highest proportion of verified sustainability reports in Australia of all sectors measured.

Over the last decade Australian mining companies have demonstrated leadership by changing their environmental focus to report against a broader set of sustainability measures. Rio Tinto, WMC Resources, and BHP Billiton have all responded to the pressure placed on the mining industry and, partly as a result, are among the 17 Australian companies listed in the global Dow Jones Sustainability Index (DJSI). It is also interesting to note that out of the 316 registered companies in this Index as at September 2004, 65 were financial groups (banks and investment groups). This shows that sustainability is now an accepted part of business reporting and investment decisions.

But a commitment to report is one thing. Delivering a valuable sustainability report with specific targets, measures and comparative data is quite another. Energetics believes that if companies wish to meet growing investor, customer, government and other business reporting requirements, they will need to begin collecting and maintaining up-to-date information on a range of sustainability indicators. It is becoming widely recognised that the ability of a company to provide highly detailed and complete sustainability data sets (i.e. social impact, environmental impact and financial data) for products or services supplied will become a competitive edge in the future.

Data management systems, required for collecting and analysing this data are becoming an important part of annual reporting and on-going performance measurement for mining companies. However, sustainability data is typically not immediately or readily available and it can take a few years of experience to create comprehensive and auditable reports that will stand up to external analysis. So, those companies taking action now to measure, report and act on sustainability issues are positioning themselves for the future.

Some industries have it easier than others when it comes to sustainability reporting. For example a head office centred organisation may need to track just 5 to 10 data sources, whereas data collection for a mining operation can require tracking of over 100 separate data sources. The cost and complexity of data collection may therefore be higher for mining operations than in other sectors. On one mining site we work with, for example, there are over 15 separate data collection systems ranging from log books for water meter readings to on-line data trending for production.

Ad-hoc data collection with basic data management tools may initially seem more cost effective but in the long run strong formalised systems provide better value.

There are many different data collection and reporting tools, but it is increasingly viewed by the mining industry that client server and web-based systems provide highly effective data management due to the complex and intricate nature of mining data required for sustainability reporting. Reporting functions are designed to not only provide accurate, auditable annual reporting but also provide the tools for performance monitoring and reporting for organisations with a variety of data sources.

In the next 10 to 20 years, international pressure to report on sustainability will continue to grow even further. Many mining companies have recognised the market advantage of addressing sustainability and are striving for continuous improvement. Their experience as this develops is interesting. Originally a large number of organisations within the mining industry started public reporting to demonstrate their credentials to stakeholders in order to maintain their current and future access to resources. But now for some at least, the process has proved its own payback through better management, use of resources and reduced risk.

Some sectors are yet to embark on the sustainability journey, but it is fair to say that the business of sustainability and the associated data management systems will become a key element of every Australian industry. Future products and services will be judged on the full range of sustainability criteria not just financial outcomes. Financial data is a very powerful tool in today's world but comprehensive sustainability data holds the key to the future.

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