Value beyond compliance
The mining industry has an extremely relevant role in society, providing comfort, well-being and quality of life. A study by Deloitte in partnership with the Brazilian Mining Institute (IBRAM) presents a new approach to creating value for mining companies, governments and communities in Brazil.January | 2021
In recent years, companies in the mining sector have invested significant amounts in policies aimed at preserving the environment and developing local communities. Despite these investments, the idea that miners get rich at the expense of society is still widespread – at the same time that their economic and social contribution is questioned.
According to the “Value beyond compliance” study, carried out by Deloitte in partnership with the Brazilian Mining Institute (IBRAM), this is a global trend that does not only affect mining companies. Society has demanded from organizations of all sizes a clear position on issues that go far beyond their products or services. As important as having a quality product or service is to ensure that its origin and production respect society’s values. Themes such as transparency, purpose and trust are increasingly present in the agendas of stakeholders.
The report also points out some ways for industry organizations to deliver value beyond compliance through actions in the following areas: human rights, relationship with communities, diversity and inclusion, taxes, regulatory changes, and transparency.
To be successful in the future and fit into the logic of a sustainable and responsive market, mining companies must deal with a scenario in which the financial return will increasingly depend on the response of organizations to issues that, until recently, were seen as profit inhibitors – but which today are recognized as tangible and intangible enhancers to organizations, in the form of reducing fines, litigation, improving image and attracting investments.
In this new paradigm, mining companies need to find ways to guarantee the continuity of business success, not only from the financial aspect, but from the “social license” point of view. They must embrace the opportunity to lead this agenda of value beyond compliance. Achieving common social development goals and measuring the true socioeconomic impact depends on the approximation between these three actors – governments, society, and companies.
More than challenges, these themes mainly present important opportunities for mining companies to promote closer ties between the sector and society. In this way, in addition to being more profitable, they become more responsible.
The value generated by going beyond compliance
For many years, compliance has been seen as an obstacle to companies’ businesses for limiting revenue-generating actions. In addition to being outdated, this concept proved to be flawed, as compliance leads to profit by guaranteeing credibility, reliability, security, and continuity of operations. Companies that put immediate profit as their only goal end up distancing themselves from it and risking their own business subsistence.
The Deloitte report shows that generating positive impacts – and reducing negative ones – in society is not just one of the social functions of companies, it is an indispensable element for business success. Mining companies that believe in value beyond compliance stand to gain.
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