• ENVIRONMENTAL , SOCIAL AND GOVERNANCE
EXXARO – EFFECTIVE ESG IMPLEMENTATION
By Sharyn Macnamara
‘ Evolution of African Mining : Investing in the Energy Transition , ESG and Economies ’ was the theme at the Investing in Africa Mining Indaba 2022 in May . ESG – Environmental , Social and Governance – issues were extensively discussed as investment is so heavily dependent on the delivery of mining companies in this area . Sharyn Macnamara caught up with Mzila Mthenjane , executive head of stakeholder affairs at Exxaro , after one such panel discussion .
The topic of the discussion was ‘ Building strong and sustainable accountability frameworks – How to improve operating and governmental integrity ; one focal point being – What is effective ESG implementation and how does one embed accountability and transparency ?
Mthenjane , representing Exxaro – a diversified coal mining and renewable energy business operating out of South Africa – took the audience through some of the parameters of the company ’ s ESG implementation and sustainability strategy ; while the IFC ( International Finance Corporation ) – a sister organisation of the World Bank , a member of the World Bank Group and the largest global development institution focused exclusively on investment in the private sector in developing countries – spoke from an investor point of view ; and EITI ( The Extractive Industries Transparency Initiative ) discussed some of the standards their mining company members are expected to adhere to as far as ESG is concerned .
SM : Mr Mthenjane , you mentioned that the impact of ESG depends very much on the difference mining company ’ s make at ground level in the mining sector – implementation being key . What differentiates Exxaro in this space ?
MM : I can respond to that by pointing to some of the ESG indicators and the ratings that Exxaro has achieved within these parameters , and the transparency around these that Exxaro has insisted on over the years .
On the environmental side , there are two key areas of activity that come to mind . Being a major coal mining company , emissions are a
Left to right : Mzila Mthenjane , executive head of stakeholder affairs at Exxaro ; Bady Baldé , director at EITI ( The Extractive Industries Transparency Initiative ); Ekaterina Autet , senior investment officer at IFC ( International Finance Corporation ) and panel moderator , Claude Kabemba , director / Southern Africa Resource Watch ( AMI ).
To summarise a complex discussion with many layers , it was clear that investment is available , but would not become a reality unless ESG was seriously managed in a tangible , reported and transparent way . Societal expectations can no longer be ignored , and the youth in particular , in Africa , and indeed globally , will no longer tolerate a lack of consideration for society and the environment . ESG offers an opportunity for Mining Houses to attract the ‘ right partners ’ – so , not only those interested in returns , but those who value the environment , the society and corporate governance .
From an operational point of view , Mthenjane stressed that for a long time now mining has had to follow sustainable practices , ESG is an expression that has been strongly promoted by the capital markets , and miners have evolved with these requirements . Exxaro has responded to the challenges and opportunities of climate change and has complimented its 45Mtpa coal production business with a 229-megawatt wind energy business to supplement the grid and is following a strategic Just Transition driven by both business and societal goals in the wake of the energy and climate change crisis .
An ESG strategy is being implemented by Exxaro and pulled through at ground level to actually impact the host communities in a very real and positive way .
Sharyn Macnamara , African mining
32 • African Mining • July 2022 www . africanmining . co . za