SASIN, Bangkok, 17 January 2013

John Grynderup Poulsen

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

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

Spatial • Local (project site), Regional, National,

International/Global

• Contribution/effect of the project

Temporal • Life cycle approach

Trade offs among these

Compromises

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

Human rights

Indigenous people

Land acquisition

Environment - land and water

Social – benefits/costs to local

communities, OHS, …

Corruption

Lack of clarity, ambiguity

New and evolving laws and regulations,

particularly aligning these with the

national development priorities

Establishing projects always requires

substantial private/domestic/foreign

(direct) investments

Does sustainability affect the investment

climate?

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

Shareholder Values Broader stakeholder values

CSR, Sustainability

Perceptions, PR, …

SE Index of sust.

Stock Price Movements

Supply & Demand

Investor Sentiment

Company Announcements

Analysts earnings estimates

Economic Data

Equator Principles

IMF Performance Standards

Business systems

Certification, ISOs, …

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

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

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

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

Internal External

Comm. Dev.

Risks

As a means to buffer against local

instability/ies

Local instabilities can pose major

corporate risks • Operational risks

• Investments

• Disturbances

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

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)