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SASIN, Bangkok, 17 January 2013
John Grynderup Poulsen
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Extractive sectors are significant drivers of the
economic development of many countries
Dilemma of massive demand and diminishing
resource availability
Increasing overlaps between resource exploitation
and interests of the broader public (includng local
communities)
Often largescale and longterm operations
penetrating and affecting many levels of society • Immense opportunity for these sectors to contribute to a
sustainable foundation for the country's future
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For who? – whose interests weigh
highest?
Hierarchical set of priorities
Gradual and continuous improvement • Long-term sustainability reached through series
of short-term improvements/benefits
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Spatial • Local (project site), Regional, National,
International/Global
• Contribution/effect of the project
Temporal • Life cycle approach
Trade offs among these
Compromises
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Partly depends on the spatial planning/design of the operations, underpinned by three overriding objectives: • Maximizing efficiency of operations, hence profitability • Minimizing adverse and offsite social, ecological and
environmental impacts and influences on local communities Easier to monitor and manage adverse environmental and
ecological impacts within a relatively small area
More effective protection and conservation of forests and biodiversity, including the ecosystem services upon which communities may depend
• Maximizing social benefits to local communities and the environment upon which local communities depend
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Human rights
Indigenous people
Land acquisition
Environment - land and water
Social – benefits/costs to local
communities, OHS, …
Corruption
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Lack of clarity, ambiguity
New and evolving laws and regulations,
particularly aligning these with the
national development priorities
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Establishing projects always requires
substantial private/domestic/foreign
(direct) investments
Does sustainability affect the investment
climate?
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Shareholder Values
Broader stakeholder values
Investment, FDI
SE
Market Requirements
‘External’ factors:
national level
conditions,
political stability,
reputation (corruption,
transparency, etc.)
The company/corporation level
The country/national level
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Shareholder Values Broader stakeholder values
CSR, Sustainability
Perceptions, PR, …
SE Index of sust.
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Stock Price Movements
Supply & Demand
Investor Sentiment
Company Announcements
Analysts earnings estimates
Economic Data
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Equator Principles
IMF Performance Standards
Business systems
Certification, ISOs, …
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Often perceived as a risk, rather than an opportunity
Tightly managed to ensure clear corporate messages
Communication and stakeholder engagement are inextricably linked
Corporate Messages • Tendency to avoid or hide sensitive issues,
rather than address such issues head on
• Multiple target audiences
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Strategic corporate messages and information effectively conveyed to intended target audiences/stakeholders
Prioritizing information sharing and communication
Appropriate means of communication for each target audience/stakeholder
Preparedness for entering negotiations and discussions with stakeholders
Means to reach stakeholders, and for stakeholders to reach the company
Improving internal flows of communication
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Create a conducive atmosphere Ensure top level endorsement and support Work at multiple levels, both vertical and
horizontal Create room for asking provocative
questions, and embracing disagreement • Challenge and question conventional wisdom and
biases Usually no lack of technical knowledge Explain risks to business and enterprise Targeted, personal discussions with key
individuals
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Incorporating comprehensive environmental, social and governance perspectives • May add additional value to the production, through
reputation and any market-driven demands • Will reduce risks for company reputation, through
adverse impact on communities, environment, etc. CSR, including community development projects,
as a means to reduce exposure to risk CSR approaches as a means to respond to and
prepare for risks, i.e., build resilience CSR, including community development projects,
as a means to offset any unavoidable negative impacts of operations
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Internal External
Comm. Dev.
Risks
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As a means to buffer against local
instability/ies
Local instabilities can pose major
corporate risks • Operational risks
• Investments
• Disturbances
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Understand scale-dependent impacts of
operations • Cost and benefit analyses at multiple scales
System dynamics as a means to build
common understanding/vision, both
within the organisation, and with external
stakeholders
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Corporate messages on sustainability Strategy and policies for sustainability and CSR Align these with performance indicators of GRI
and/or other global initiatives Internal awareness throughout the organization,
vertical and horizontal, e.g., finance, HR, environment, OHS, ...
Code of conduct Mainstreaming CSR business systems into the
entire structure including through bilateral discussion with system managers (linkages)
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