How Anglo American created an integrated approach to decarbonisation in high velocity situations
Full-impact decision-making – a lightbulb moment for sustainability
By Shell on Sep 02, 2021
Embedding sustainability into the lives of consumers around the world might not be as easy as flicking a switch. However, rethinking our approaches to the basic materials that go into everyday actions, such as turning on the lights, can make a big difference to global decarbonisation efforts.
Take copper, for instance. When you cook a meal, there is a good chance your pans are made with copper. When you look at your phone to check your messages, that is a swipe right for copper. And when you switch on the lights, copper wiring carries the electricity that powers almost everything you do. Copper is essential for everyday life and growth, yet few people think about the value that copper brings to society. For example, copper is a key product for renewable electricity generation and distribution, for the electrification of transportation (in all its forms) and for other innovative and emerging technologies such as smart grids and the hydrogen economy.
Laura Brooks, Group Head of Sustainability Integration & Impact for Anglo American, however, understands the role that the products delivered by the mining industry can play in driving decarbonisation – from renewable energy solutions to the digital connectivity that empowers greater digital access for society.
This is just one element of what Laura refers to as Anglo American’s ‘full-impact decision-making’ process that informs the company’s strategic direction. It is also why she disagrees with the notion that there is a paradox between decarbonisation and growth.
“We can create a cleaner, greener world through the products we produce, and that's exciting,” says Laura. “So, I don't think that there needs to be a paradox between growth and sustainability. I think they can both be a positive force for driving our decarbonisation efforts.”
Bringing a values-driven response to high-velocity situations
Mining would certainly fit the mould of a what the World Economy Forum dubbed a paradox industry, looking to increase its output while simultaneously improving its environmental impact. The COVID-19 pandemic has had a marked effect on production, which decreased by about 42% in 2020 due to a fall in demand and workforce restrictions according to McKinsey.
This does not seem to have halted the need or desire within the industry to pursue decarbonisation efforts. According to our latest research, seven out of ten mining leaders say that the pandemic has accelerated their sustainability journey by up to five years – with 45% indicating that the budgets in this area have increased during the crisis.
The industry response aligns with Anglo American’s reaction to the pandemic. “We asked ourselves quickly, what is going to be our COVID-19 response?” says Laura. “The term ‘High Velocity Leadership’ is exactly right because it really does describe what was happening. People were making decisions very quickly, but what I saw at that time was that the decisions were also driven by purpose and values.”
This demonstrates Anglo American’s full-impact approach to decision-making, with thoughts swiftly turning to the company’s wider responsibility as a global leader. “So, in terms of our pandemic response, we were thinking about how we support the 100,000 people we have working globally; asking what we need to do to protect them,” explains Laura. “But then, very quickly the conversation stepped outside our fence line to look at how we support the communities in which we operate.”
These values-driven responses to the pandemic highlight how organisations across the industry were keen to live up to their wider social responsibilities, even during such an unpredictable time for their businesses.
In our recent survey of senior figures from across the mining industry, we discovered that:
- 59% see decarbonisation as an urgent priority for their business and already have plans in place to approach it
- 69% say that the pandemic has accelerated their decarbonisation efforts by up to five years
- 45% say their budgets for decarbonisation and sustainability increased during the pandemic
- 45% view sustainability as a responsibility to their communities
- 78% see sustainability as important to new business opportunities and bids
The importance of embedding sustainability into an organisation
A vital element in how Anglo American was able to focus on its social and environmental impact during a time of crisis was the fact that sustainability was already embedded into the heart of the organisation and its decision making. In this way, the company’s decarbonisation efforts were part of its everyday operations with each site and Group Function having five year sustainability plans that are embedded into core business planning – meaning continued progress regardless of external pressures.
“In March 2018, we launched our Sustainable Mining Plan that sets out deliberately ambitious commitments for 2030,” says Laura. “These commitments were approved at board level. But it’s not just about driving the delivery of a particular goal; it's also focused on how we embed sustainability across the business. For this reason, I’m particularly focused on our leadership and our culture – to ensure that sustainability is embedded in the decisions we take across the business every day and making sure that we are driving the delivery of goals in an integrated way.”
Laura explains how this works in practice: “Let’s say we want to drive a climate change initiative with some new technology that could have an unplanned impact on job creation or water security. […] We have to make sure that we take a full-impact approach to those decisions and look at our commitments in a holistic way.”
This integrated, full-impact approach means that wherever sites are – from Brazil to Australia – sustainability is not a separate plan sitting to one side of the business. Sustainability commitments, including decarbonisation efforts, are built into every area of the business from discovery to marketing.
“This is absolutely critical and fundamental,” says Laura. “Because the business activities (such as drilling) are happening in the mining space. So, unless sustainability is connected to business activities, you're not going to understand what's going to drive your sustainability impact – positive or negative.”
I don't think that there needs to be a paradox between growth and sustainability. I think they can both be a positive force for driving our decarbonisation efforts.
The ground-level impact of full-impact decision-making
Anglo American’s full-impact decision-making approach lays out a clear blueprint for making sure that decarbonisation is a central element of its operations at a group and site level. But what is its impact on the ground?
Laura gives the example of the thought process that goes into the automation of a site’s drilling equipment in Northern Cape, South Africa. “Our Sishen iron ore mine introduced automated drilling, which provides us with the benefit of improved energy and water efficiency”, she explains. “Going further, you're also moving people from frontline work to a control room. So, there are safety benefits too. And we found that it helped us from an inclusion and diversity perspective, with roles now much more accessible to all genders and people with disabilities. Those were all the upsides of that one decision to automate drilling.”
There was also an assessment on the potential impact on jobs. This is, again, where the full-impact approach comes into play. “Instead of relying on the automated drilling maintenance company from Johannesburg, we were able to upskill a local supplier to carry out that maintenance and create new jobs in the community”, explains Laura. “This is why we call it full-impact. We think about the full primary and secondary consequences to make intentional decisions that mitigate any risks or negative impacts associated with them.”
We have to make sure that we take a full-impact approach to decisions around sustainability and look at our commitments in a holistic way.
Pulling business levers to deliver on decarbonisation goals
At the site level, we can see the positive impact of full-impact decision-making. However, a lot of work has gone into embedding sustainability values, including decarbonisation and social impact, into the organisation from the top down.
“Before we get these integrated plans into place, we had to think about how we change our culture, our mindset, and our leadership,” says Laura. “We’ve had to understand the levers we can use to drive sustainability across the business. For example, making sure sustainability is included in quarterly performance reviews.”
It helps that, in Laura’s experience over the last 20 years, sustainability has shifted, and become a non-negotiable – and that allows her to draw on senior leaders for their influence to underline the importance of building sustainability into the company’s day-to-day operations.
“Our senior leaders have been very influential in shifting the mind-set. Our CFO clearly articulates investor expectations on sustainability, and the CEO of our Marketing business lays out customer and end consumer expectations for sustainability,” she explains. This underpins the commercial importance of sustainability for the business. “So, if we're sending our iron to a steel maker and that steel maker is selling their steel to car manufacturers who are selling cars to end consumers with sustainability expectations, it's not just about those very local impacts; it's about how these different stakeholder pressures are coming down the value chain.”
Resolving the paradox in mining
Ultimately, Anglo American’s full-impact approach supports Laura’s assertion that driving sustainability and growth in mining does not necessarily result in a paradox – even in high velocity situations like the pandemic.
From her perspective, there is no paradox between sustainability and growth. We can grow sustainably by understanding the full impact of our decisions. If anything, with three-quarters of mining leaders viewing decarbonisation as vital to new business opportunities and bids, a focus on sustainability will only become more critical in the coming years.
Whether it is the lifecycle effects of copper bringing light to houses around the world, or the workforce changes that come with the automation of the machines that drive your business, it is time to think about the full impact of your operations on the environment and your responsibility to the communities around you.
