This article features extracts from the Role of Social Responsibility session at the 2024 LBMA/WGC Sustainability & Responsible Sourcing Summit.
The panel comprised Joanne Lebert (Executive Director, IMPACT), Estelle Levin-Nally (CEO and Founder, Levin Sources), and Marianna Smirnova (Senior Director, Responsible Sourcing and Standards, RMI). Jennifer Peyser (Executive Director, RMI) moderated the session, which explored the frameworks that define the S in ESG (Environmental, Social, Governance) and what direction industry initiative and companies are moving to in the ESG space.
Jennifer Peyser (JP): As we look across these frameworks with a different but developed sense of what social responsibility is, what is getting in the way of achieving that vision?
Joanne Lebert (JL): Despite the assumption that they don’t care, there’s definitely an increasing number of companies interested in not only doing no harm, but actively doing good. But they’re struggling to figure out how to do this, how to quantify it, and how to know what is and isn’t working, because they’re often far removed from where the good is supposed to be happening.
From an NGO perspective, what we’re seeing is a lot of greenwashing. Just recently, for example, we saw Dutch airline KLM lose a consumer protection lawsuit because of claims related to their ‘fly sustainably’ market logo. Companies are being called to provide data to back up any sustainability claims because consumers are looking out for that.
Another concern is around what I would call ‘data washing’, which is sometimes intentional and sometimes isn’t. This is what happens when activities and social performance are reported as outcomes and results. There is a big difference between saying ‘I’ve completed X amount of training’ and ‘I’ve achieved gender equality’. Claims are being made based on activities, but activities are just a step towards a much larger outcome, so we must be careful about what we say we’re achieving.
The panel from top to bottom: Jennifer Peyser, Joanne Lebert, Estelle Levin-Nally, Marianna Smirnova
JP: What is going on culturally at companies? What is influencing how companies are thinking about social responsibility?
Estelle Levin-Nally (ELN): We do a lot of advisory work with companies that are trying to deal with artisanal and small-scale miners and their concessions. We’ve done it across different mineral categories, but very often in gold and very often in high-risk contexts.
In 2015, I was in Mozambique dealing with an artisanal mining issue and I had an interview with a bunch of artisanal and small-scale miners, during which they told me about some very serious human rights allegations against the security services. I took this story back to the site manager who laughed and said, ‘Don’t be ridiculous. Why are you listening to these people?’ He then went on to explain to me in very racialised terms why I couldn’t trust anything they’d told me. In that case, it was racism that was preventing a range of early warning and grievance mechanisms from working, including my professional recommendation to take action.
Another aspect is ideological or political differences. I had a client whose ASM management programme in their mine in West Africa had failed. When I asked why, they said, ‘Because our security guys are right-wing and social performance guys are left-wing, and we couldn’t align politically to agree on the right strategy.’
All of this is institutional, but it’s also about culture and how essential soft skills and leadership are. It doesn’t matter how beautiful your ESG plan is. If you can’t bring people along with you and excite them, it’s just not going to work, which translates into a lot of failed effort, wasted resources, not having enough money to do everything you need to do, and letting down communities and affected stakeholders.
JP: There are tools available to assist in the evolution of social responsibility. How have you seen these tools evolve in response to lessons learned about social responsibility?
Marianna Smirnova (MS): For those who don’t know about the Responsible Minerals Initiative (RMI), we are an industry initiative that represents a variety of different industries. Our scope started with 3TG and cobalt but has expanded beyond that to emerging and critical minerals. Our objective is to provide tools and guidance to support you in solving these issues, whether that’s in your supply chain or within your company.
When I came into the RMI, it was very interesting because, while we were doing fine work in operationalising the OECD Due Diligence Guidance, I was also visiting smelters and refiners and observing people in flip-flops near furnaces, water run-off in the local water supply chains, and really horrendous attitudes about women and minorities in the workplace.
Unfortunately, depending on the location, a lot of that is still the reality. How do we, as an industry initiative, encourage change? Our journey has evolved a bit and some of that is due to drivers, such as regulatory requirements, investors, CSOs, NGOs, and impacted individuals.
We were discussing when is an appropriate time for a minerals industry initiative to start bringing these expectations to our members, entities and stakeholders. At RMI, we started with cobalt. It was a very interesting pivot because cobalt in the Democratic Republic of Congo (DRC) is a very high risk and complex issue, but it’s not necessarily directly tied to conflict. The critical challenges are around child labour and Occupational health and safety (OHS) issues, and this is where we started moving our cobalt standard beyond the OECD Annex II risks, adding explicit requirements around engagement with ASM and managing the child labour and OHS risks.
JP: How do we go beyond reporting risk to taking action?
ELN: The first thing we need to do is rationalise how much it costs to do what I call the ‘hygiene factors’ of due diligence. The reason we have the six steps of responsible business conduct is, ultimately, to help avoid adverse impacts. To get to that point, we have to spend so much money on the management systems, the audits for tracking effectiveness, and the reporting, in order to understand the data. By the time you’ve done all of that, there’s not always a lot of money left to do the stuff that drives change.
This may be controversial but I don’t think traceability should be for profit. Traceability is the means, not the ends, and I think we need to make these things as cost effective as possible.
JP: IMPACT has been doing a lot of work on data for a purpose, data for change. What does that look like to you and how can that be operationalised?
JL: We’ve been testing supply chain due diligence in artisanal gold in a number of different contexts for several years. With all these added requirements, it’s more challenging but we also want to know if we’re making a difference, so we started questioning ourselves several years ago. It’s very clear that you have to design the approach with the community, ideally with them as part of the data collection and analysis, in order to benefit. But how do we do this efficiently, in a cost-effective way, where we’re not just monitoring progress?
We’re doing impact evaluation in a way that essentially reduces how complex all of this is for analysis. But sometimes there are unintended consequences. When we first introduced supplies traceability in the DRC, our monitoring and evaluation system revealed that the income of male workers in the supply chain were increasing, while women’s income was not.
We were unintentionally increasing gender inequality as an organisation committed to gender equality.
Then we really started investing in making monitoring and evaluation as easy as possible. So, we created Bloom, which allows the user to pick the priorities, the sustainable development goals, the ESG standards and their subcategories. It produces one single data collection framework that essentially tells you how to collect the data and then does the analysis.
JP: Speaking again to collaborative action, what can be done by the community and what is better done collectively, rather than company by company?
MS: Regarding access to tools, the risk readiness assessment is free, and not just for RMI’s entities and members. It is free for everyone who chooses to use it, and yet it still has the element of data protection. It’s a tool for you to see where you are in terms of your performance, but you have to give your explicit permission to then share your particular outcomes with another company, which can be used for peer learning.
It’s more about reframing social responsibility. It’s not just about gender equality and having a policy. It’s about pivoting to diversity, equity, inclusion, and having rightsholders at the table.
It’s more about reframing social responsibility. It’s not just about gender equality and having a policy. It’s about pivoting to diversity, equity, inclusion, and having rightsholders at the table.
