Clean energy is imperative to arrest catastrophe
This week the mining industry, investors and governments from across the continent gather in Cape Town for the annual African Mining Indaba, under the banner of this year’s theme: “Evolution of African mining: investing in the energy transition, ESG and the economies”.
The subject is timely. We are told that environmental, social & governance (ESG) factors are part of capital allocation decisions by institutional investors the world over. This is in no small measure because the global climate emergency is unquestionably upon us.
Africa requires no reminder of the imperative race to net-zero emissions by 2050, as the beleaguered coastal communities of KwaZulu-Natal tally the devastation of last month’s floods while 20-million people are facing climate-related famine in the Horn of Africa. There can be no delay in transitioning to clean energy if we are to have a hope of arresting climate catastrophe.
The urgency of tackling climate change also means environmental criteria — the “E” in ESG investment — have occupied prime place in the responsible investment discussion. But as this week’s events in Cape Town get under way we would do well to turn our attention to the “S” in this acronym, and the vital role Africa’s communities will play in ensuring the sixfold increase in transition energy minerals — including cobalt, copper, and zinc — required by 2030 to meet our climate goals.
It is these communities on which the world will rely to power the global energy transition, and which will choose whether to grant companies social licences to operate on their lands, transform their social fabrics and irrevocably alter their physical environments.
Central to the energy transition must therefore be respect for the human rights of these groups. At minimum this means legitimate consultation with and consent from them, robust human rights and environmental due diligence, and access to remedies for communities when things go wrong.
The recent publication by the Business & Human Rights Resource Centre of its transition mineral tracker, a tool for investors to assess the human rights records of these companies, suggests the industry has a way to go.
The tracker documents allegations of corporate human rights abuse over the last decade, ranging from erosion of land rights to toxic pollution, diversion of scarce water resources, attacks on communities and their human rights defenders, and failures to effectively consult.
Companies operating in Africa figure prominently in the tracker, including Glencore, Anglo American, First Quantum and Vedanta. The Democratic Republic of the Congo and Zambia — big producers of cobalt and copper on the continent — were home to most of the alleged violations in Africa.
At the same time, the global drumbeat of community opposition to mining projects, often rooted in such allegations, is difficult to ignore. Just this year we have seen the disaffection of communities surrounding the Las Bambas copper mine in Peru, whose protests have halted that giant mining operation; the decision by Chile’s government to decline a crucial expansion permit for Anglo American’s Los Bronces copper mine, reportedly due in part to public health concerns; and Serbia’s termination of Rio Tinto’s lithium project in Jadar after fierce community opposition.
Here in SA, the successful battle by community groups resisting enlargement of Tendele Coal’s Somkhele Mine, and the backlash against Shell’s offshore seismic exploration, highlight that communities can and do bring large resource projects to a standstill.
Frequently, these protests are characterised as obstacles to job creation, and the protesters as bent on arresting development. It appears to be tempting to blame them for the real threat this resistance poses to the green energy transition and to resource development in general.
But we should consider that growing opposition by communities demanding a true say in their own development is not the problem to solve. It is rather the extractive industry that needs transformation, to one that consistently includes effective community consultation and consent, shared prosperity and co-ownership of any future energy transition.
The precarious health of the world’s climate simply cannot rely on an extractive model that has left so many mining-affected communities impoverished and leaves others, looking now to the history of the industry, resolving to resist the development of untapped resources on their lands. This indaba, with its focus on ESG and clean energy, provides stakeholders a critical opportunity to examine what it means to invest in a just energy transition: one that is fast, but also fair.
Investors who manage long-term capital have a real stake in ensuring their investee companies deliver the reliable supply of raw materials needed for the green energy transition. These institutions therefore also have a critical role to play in ensuring that the often-neglected social aspect of ESG investment, including human and worker rights, is not crowded out by emphasis on environmental aspirations.
Instead, environmental and social responsibilities must be fully integrated — on equal footing — into new ESG standards, if we are serious about our climate goals and the development of a mining industry that can support them.
A sustainable transition is only possible if it is just, and recent events make clear that transition mineral mining companies must pursue social compacts with their host communities that are equitable, responsible and the product of true negotiation.
ESG investors must hold them to it. Without this, the race to net zero risks ending in a limp to the finish line.
• Clements is director for international programmes, and Kibugu Africa region head, with the Business & Human Rights Resource Centre.
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