For businesses across the globe, 2024 looks set to be another year of flux. The mining and metals sector in particular faces complex headwinds and tailwinds, as well as heightened expectations and demands.
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To thrive as well as survive, requires these companies to become more agile, exhibit strong leadership, skilled talent, and a heightened focus on sustainability, climate, and equity. The 2024 edition of Deloitte’s global mining and metals report, Tracking the Trends, outlines two trends that could prove pivotal to this.
Putting purpose at the heart of mining and metals
Today, the expectation that businesses should stand for more than just maximizing profits is becoming more common. This is leading many to reconsider their purpose, answering the all-important question: “why does this company exist?” The answer can serve as a powerful beacon for decision making and, ultimately, growth.
Purpose-led companies go beyond making money to become agents of human idealism and societal progress. This is not only the right thing to do but, when brands become a force for ideals, they give people a reason to care about and contribute to their successes which makes them more valuable and advantaged.
Worley, for example, is investing US$65 million over three years to develop solutions for customers in areas aligned with its purpose. The company is educating its workforce and identifying innovative ways to meet its sustainability challenges, as well as those of its customers. In 2023, 41% of Worley’s total revenue was sustainability-related, up from 35% in 2022, and by 2026, the company aims for 75% of its total revenue to be sustainability related.
However, purpose-led growth requires new value to be created for stakeholders, rightsholders, and operations. Plans and strategies should also be rearchitected toward common goals, and leaders and employees should try to demonstrate that intention consistently. Most importantly it requires commitment and alignment over time.
Here are three ways that companies can get started:
- Ignite a founders fire: A CEO can become the founder of an era within their company. The key lies in identifying the ideals that they value most, and how these values could align with the company’s business model and be leveraged to drive value. This process could take the form of a simple interview with the board or could be much more complex. It will look different for every business. Either way, test the outcomes with the wider leadership team to ensure their commitment.
- Establish a reputation team: Organize a subset of the executive leadership team whose responsibility is to infuse purpose into the company’s actions and communications. Clear governance helps ensure oversight and delivery.
- Think about branding: This will act as a creative platform to cohere communications, actions, and environmental, social, and governance efforts of the company. Give people reasons to join in support of the company and the change it aims to lead through linking these reasons to important human ideals, such as equality, freedom, and peace.
Building capacity for a credible energy transition
Climate change is one of the greatest challenges of our time, and the private sector has an important role to play in delivering a credible energy transition that provides shared outcomes for all stakeholders. Mining and metals companies that act swiftly could be rewarded through enhanced resilience and value generation opportunities.
Many companies are now focusing on which actions count as truly “credible” and how they can uphold leading practices. These will vary by sector and geography to accommodate technological and physical dependencies, as well as just and equitable transition principles. However, a good example comes from Schneider Electric. In 2022, carbon emissions from the company’s procurement of goods and services made up the bulk of its scope 3 upstream emissions. In response, Schneider developed The Zero Carbon Project, collaborating with more than 1,000 suppliers with the goal of halving their collective carbon footprint by 2025. Over 1,300 supplier participants have now undertaken technical training about decarbonization.
Here are three ways, based on steps from the Climate Leaders Coalition’s Credible transition to net zero report, delivered by Deloitte Australia, to help companies accelerate their transition efforts.
- Ask questions: Laying the foundation for credible transition plans requires leaders to ask questions of their teams, boards, and investors. Creating mechanisms for this and maintaining an open dialogue is vital to producing meaningful outcomes.
- Foster ecosystems thinking: Organizations that adopt a strategic and rounded approach to collaboration across a network of vendors, clients, and peers should be able to better recognize their impacts on and dependencies upon nature, communities, and society. This can inform opportunities to add value over time and mitigate or manage potential threats.
- Leverage relationships: Timely, impactful actions require organizations to work within, and beyond, their historic boundaries to identify synergies and overcome barriers. Industry associations and working groups often convene thought leaders to discuss shared challenges and can provide critical mass to accelerate plans and actions.
Providing positive change for people and planet
As providers of the critical raw materials needed to build and power a low-carbon world, and feed and house a fast-growing population, mining and metals companies hold huge potential as agents for positive change. By redefining their purpose and advocating for a more credible transition, companies can help to create a more sustainable and equitable future for society, for the environment, and for themselves.
To learn more about these topics, read the full version of Tracking the Trends 2024.
