People are becoming more aware and concerned about environmental degradation and social and economic issues related to the exploitation of natural resources. In fact, there has been a gradual redefinition of the role that international companies play, as society expects them to accept broader responsibilities for the management of the environmental and social impacts of their activities on communities and the environments in which they operate.
These changes have contributed significantly to increasing the exposure to legal, economic and regulatory challenges for extractive industries. There is also an increased risk to their reputation.
Here is a non-exhaustive list of the social and environmental challenges for extractive companies :
- Relations with local communities and management of complaints
- Implementation of dialogue with stakeholders
- Local employment
- Worker demobilisation at the time of production and closure of the site
- Human capacity building
- Processes for compensation and resettlement that are fair and transparent
- Measuring the performance of social investments
- Pollution of water resources
- Closure and restoration of sites
- Reduction of carbon footprint
- Deforestation and loss of biodiversity
- Air pollution
- Noise pollution
- Transparency and respect of the legislative framework, standards and norms
A simple glance at this list helps us understand that extractive companies are increasingly exposed to a variety of complex issues.
They must therefore put in place new strategies to anticipate, understand, quantify and minimize the risks they face on a daily basis.
In addition, social, environmental and economic issues are often interrelated and may arise in the legal, political, financial spheres of business. This can cause reputational risks for a company.
Environmental and social issues must be well managed, taking into account all the activities of a company. From the simplest project up to highest levels of management, regardless of where the company operates or at what stage of development a project might be, these issues are increasingly of integral importance to successful value creation and preservation for businesses in the mining and oil & gas industries.