By Johannes Kotilainen
Mining is necessary; electronics, buildings, cars, solar panels,
batteries, windmills, all forms of technology, and almost everything requires
at least some resource to be extracted. Many of these products are created to
lessen our impact on the planet, but they still rely on mining. As a result,
how the mining is done becomes vital.
Sustainability in business is driven by the bottom line, and many of the
benefits of embracing sustainability relate to lower operating costs. The less
direct effect on profits comes from the marketability, consumer opinion,
relating market share, and employee retention, all of which are increased by
incorporating sustainability into the business model. Mining, like every other
industry, can extract these benefits.
Recently the World Economic Forum was hosted in Davos, and with it came
a report from Corporate Knights, listing the top 100 most sustainable companies
from around the globe. This year, Canada’s Teck
Resources Limited (TSX: TCK.B)
placed #29.
So how can a company from an industry that is known for its unsustainable
habits and for its lack of environmental concern make the list? Quite simply,
by leading their industry. Teck has implemented new practices and is being
transparent on how resources are used in their operations. This allows them to
see where they are spending the most money, and minimize the use of these
resources, resulting in lower costs, while minimizing their ecological
footprint.
Teck currently sources 25% of its energy usage from non-carbon emitting
sources. The majority is generated through hydro, and they have developed a
wind farm composed of 55 turbines. Even more beneficial is to cut energy use at
the source. Teck plans to cut energy use
by 1000TJ by the end of the year from their base line year of 2011.
Currently they are on target, and one of the simple solutions to
achieving this was to implement a no-idling policy on heavy equipment and
vehicles. 1000TJ is a large sum of energy. It is roughly equivalent to 150,000
barrels of oil. This is not just a good thing for the environment but also Teck’s
bottom line. Producing the same amount at a higher profit margin is better than
just upping production. Being more profitable in tough times means that they
can increase their profits without having to increase production. In tough
times, demand does not usually increase. Having a better profit margin is the
easiest way to improve profits when demand is down, which is exactly what Teck
has achieved.
Energy use is just one example of how integrating sustainability into
the business model directly increases profits; recycling water, efficient waste
management, and retaining employees all contribute to the bottom line. The
second area that Teck is leading the mining industry is in its contributions
back to the community and environment. In the past Teck got hit hard for not
being sustainable, and the damages it caused to communities and the environment
surrounding its operations. Today they
have done a complete 180 from where they were a decade ago. Teck places value on
where they operate, they strive to provide a safe working environment and
opportunities to learn and further employee’s careers. Teck has become a
steward to the environment; they purchased 7,000 hectares in B.C. for
conservation, one of the largest private sector investments in the province’s
history. Showing that it can also make
contributions that are not just about reducing their impact.
Teck is leading the mining industry, by proving that sustainability is
achievable, and can benefit a corporation’s profitability in many ways. It also
shows that even a company that was once environmentally unfriendly can become
friendier. If the mining industry can do
it and see the benefits then every other industry has something to gain from
imbedding sustainability into their procedures, not just other mining
companies. Teck is also creating a framework for new mining industries to
follow. Instead of having to back track from bad practices, new and smaller
mining companies can embrace sustainability from the start or when expending
and see the benefits without having to rework what they did wrong.
Find out why
sustainability is important in business and investing: http://www.smallcappower.com/posts/why-sustainability-is-important-in-business-and-investing-johannes-green-investing
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