Effectiveness of Sustainability Disclosures in the Mining and Metals Sector – a Critical Analysis
Author
Asnani, Namita
Metadata
Show full item recordCitation
Asnani, Namita. 2022. Effectiveness of Sustainability Disclosures in the Mining and Metals Sector – a Critical Analysis. Master's thesis, Harvard University Division of Continuing Education.Abstract
Economic activity and sustainable development share a common overarching purpose: to improve quality of life. The difference lies in prioritization of stakeholders, and spatial and temporal impacts. Sustainable development explicitly incorporates welfare of all stakeholders and accounts for environmental impacts in the short and long-term while economic growth is primarily concerned with enhancing monetary value of tradeable goods and services.The mining and metals industry plays an important role in enhancing quality of life. It enables infrastructure development and provides employment opportunities. It also has negative environmental and social impacts. It is critical to minimize them, and the first requirement is to measure them. Deteriorating ecosystems and sub-standard safety and health conditions impact local communities and employees, and to make useful choices in supporting or opposing mining activities they need to know the extent of these impacts. Investors need this information for risk assessment of their invested capital, and consumers to make choices based on their value system. This makes credible transparency important and urgent.
The purpose of this thesis was to identify the extent to which sustainability disclosures of the world’s top mining and metals companies meet the needs of their stakeholders. My hypothesis was that they are currently not meeting them in a credible, relevant, and sufficient manner. Sustainability reports tend to be hyperbolic, discussing lofty future targets and expanding on a few initiatives rather than including concise and relevant performance data. This may be done unintentionally or to distract from more important, larger issues. In addition to examining the current situation, the thesis constructed a proposal for a next-level sustainability performance dashboard for mining and metals corporations.
The research methods included developing a best practice sustainability performance reporting framework based on current commonly used frameworks and examining the extent to which the top 25 corporations (by revenue in 2020) adhere to it. The results showed that none of the corporations are obtaining a reasonable or high level of third-party assurance on the material impacts identified by them. The industry Mean Transparency Index of all sustainability categories was 59%, with a minimum of 32% for economic impacts and a maximum of 92% for female diversity. The Industry Mean Transparency Index of all companies’ sustainability performance is 55% with a standard deviation of 20, and lowest and highest indices of 10% (scored by Southern Copper, USA) and 90% (scored by Newmont, USA) respectively; only 12% of relevant mining site level data was reported across the 25 companies.
Significant implications of the above findings include the low credibility of sustainability disclosures: companies have a proclivity to give disclosures that are easy to provide or make them look good, leaving out other significant topics; transparency of disclosures varies widely across companies; and local communities are not being served by the current reporting practices. To overcome these shortfalls, I provide a proposal for a next-level sustainability dashboard that could be adopted by mining and metals corporations globally, integrating simplicity, comparability, and accessibility in addition to credibility, relevance, and sufficiency of performance disclosures.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAACitable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37373374
Collections
- DCE Theses and Dissertations [1304]
Contact administrator regarding this item (to report mistakes or request changes)