Environmental accomplishments help meet corporate goals

Copious regulations, increasing in number and complexity. New issues, without precedent. Vociferous public interest groups. Changing expectations on all fronts, some of them unreasonable. At the same time, unprecedented international competition and cost consciousness. The burdensome clouds of detail over our industry can make us pine for the simple pan and stream once again. But is there a silver lining? Where do you start to look for it? What’s the payoff, if you find it?

The answers shouldn’t surprise you. There is a silver lining and it’s there for executives with the eyes to see it, the guts to go for it and the talent to get it. By applying some management moxie, the issues of the environment can yield what some believe is the richest silver lining of all. The payoff includes:

— operating performance improvement;

— competitive differentiation;

— improved shareholder relations; and

— improved employee morale.

To find a silver lining, you have to turn a cloud inside out. To find an environmental payoff, you have to turn environmental issues inside out. Consider environmental responsibility as an integral part of your business, and deal with it on the same level as finance, marketing, information technology or human resources.

Ten years ago, public attitudes about health and safety issues could be as irksome to business as the environmental movement is today. But 10 years later, health and safety programs have been assimilated by mining companies to the degree where they hold very high priority. The wheel has simply turned once again.

Environmentalists consider environmental issues to be vital and urgent. Public policymakers view them as difficult balancing acts. Prospectors, operators and investors an uneconomical waste of time and an international competitive disadvantage. These views are all valid if environmental issues are isolated within the context of the old game we used to play.

By “old game” I mean the bashing between interest groups. The reality is, however, that issues of the environment cut across traditional boundaries and the old game is over — the lights are out; the stadium empty; the only players on the field are the ones left wondering why it’s no fun anymore. A new game has started across the street, and its name is not mining or the environment; it’s mining and the environment.

The new game has new rules, of course. These rules are often being made up as the game is being played. If you choose not to play, you might find it begins to play you; in other words, the centre of control is drifting and you may have to move with it. The new rules involve integrating mining and the environment, cradle to grave.

Environmental Assessments can be successful and provide opportunities for competitive differentiation, given an appropriate investment in the process and successful environmental management on existing operations. Day-to-day operations face new regulatory requirements, and they involve managing new relationships and expectations, new plans, new jobs, new technology, new training, information and reporting.

The new Ontario Mining Act is going to set new measures and standards for decommissioning and extend existing requirements for conflict resolution, technology and financing.

How can you tell if you’re on a success track? Success is readiness, which means preparation — a function of time. One of the greatest challenges in mining and the environment is the lack of necessary time. Time to understand the game; study its rules; train to anticipate opportunities and deal with problems effectively; learn from the inevitable mistakes. Environmental issues have adopted social urgency. This is one of the reasons why the leading interest groups are forming joint initiatives, such as Provincial-National Roundtables and other consultative processes on public policy and regulation. Proactively connecting with these interest groups is one measure of successful environmental management.

Being ready also means being willing. And in the new game, the test of will may mean commitment to new principles at the expense of old ones. How will company policy translate into behavior? Policies alone are inadequate — the new game demands performance measures and targets, sufficient to inform and motivate all concerned in your organization. It’s no good having a policy that commits an organization to unrealistic compliance. Better to commit to plans toward compliance, and hold yourself accountable for getting the plans approved.

Finally, being ready has to do with being able. The new game provides lots of opportunities for old dogs. Above all, you need business acumen to apply insight and smoke out the opportunities. You need to make the right tradeoffs and allocate the right resources. That means creative planning, based on thorough research and analysis.

There are opportunities for new abilities too. The payoff of planning is the ability to manoeuvre under pressure. An organization’s emergency response capability is one sure sign of being able to manage the environment by limiting risk. The technical and communication skills needed to deal with the environment are somewhat different than those required in the past. The new game also influences organization and training, the support required to help all the players be their best. The watchwords for both are due care; staff functions can be a help to, but not a substitute for, effective line managers and teamwork. In training, it’s results that count, not the number of courses or procedures in a manual. When the siren sounds, what actually happens next?

Ultimately, your acid test can be your own. New information reports, tracking systems and controls can chart progress and lay out the ground ahead.

As one besieged executive remarked as he tried to look on the bright side, “We seem to be overcome with insurmountable opportunities.” Droll? Environmental issues are already making and breaking companies in competitive situations. In new business development, for example, successful bidders for licences to develop new properties must demonstrate successful environmental management. In mergers and acquisitions, due diligence covers environmental liabilities carried by prospective partners.

The new game has new spectators, who are very good at influencing the players and the referees. Never before have so few managers been expected to handle the expectations of so many public interest groups with so little understanding or patience — and often, such inaccurate and self-serving information. Successful mining executives and successful mining industry must spruce up communications fast. The book has been written on how not to do it. But there’s hope and successful experience to build on. Alternative conflict resolution processes are proven credible with public policymakers, leading environmentalists, first nations and industry. And in this case, time works for winners, not against them.

Fraser Wilson is a partner in Ernst & Young’s Environmental Management Practice.