Extractive companies may be far from perfect, but nothing is impossible if the industry lets go of its conventional way of thinking and sets the pace for change with consumers leading the way. Doing good while doing bad? A near impossibility? Megha Sureshkar of ESSEC Business School Asia-Pacific explores.
Extractive industries and sustainability
“Mining is like a search-and-destroy mission” – powerful words by American politician Stewart Udall that sums up the adverse consequences of the dangerous craft. The term search-and-destroy, or simply S&D, takes its roots from Malaysia where it refers to a military strategy in which ground troops are inserted into hostile territory, the enemy hunted and destroyed, and the forces withdrawn afterward. Only in the case of the extractive industry, companies force their way into the environment, destroy ecosystems and habitats, and leave behind a barren landscape in the place of a once-lush greenery. Extractive industries and sustainability.
The essential, yet environmentally costly omnipresent industry
An ever-growing global population, never-ending demand for products and steadily increasing living standards are putting more and more strain on the Earth’s resources and the environment. Central to satiating this impatient and demanding mammoth consumer market is the extractive industry – oil, gas and mining – which is being asked to increase production in an uber-challenging landscape and to balance increased production with a strong sustainability focus. However, despite its claims of being sustainability-focused, the extractive industry is overwhelmingly driven by economic rather than environmental or social concerns.
To top it off, the industry has a ubiquitous presence. Oil and gas companies have their mark in almost every part of the world (except Antarctica) and provide materials that can be found in nearly every product we use in our daily lives. They are essential to build roads and houses, and to produce cars, computers, phones, and household appliances. But all this comes at a great cost – air and water pollution, habitat disruption, climate change, oil spills, abuse of local communities etc. Moreover, extractive companies operate on a ‘take, make and waste’ model, built on the assumption that resources are infinite.
Human greed: The driving force behind unsustainability
Development has been synonymous with the notion of ‘having more’. Even as we are nearing close to planetary resource limits, people do not want to let go of their wants. In the 21st century, it has become apparent that human desires have been increasingly given more worth than everything else. It is equally indisputable that the needs of the planet with millions of other organisms living in it and the importance of preserving and protecting them have been belittled in favor of excessive human desires.
Human greed has manifested itself in ways that are causing irrevocable damage to nature. But, how exactly does human greed go beyond its justifiable limits? Look no further than an arm-length away for an illustration. Yes, you guessed it right – a mobile phone. Mobile phones have become a luxury statement rather than a necessity nowadays. Each phone is made up of dozens of precious metals from graphite in the battery to silicon in the processor and many of the key technological features wouldn’t be possible without these elements. Mining for these precious metals creates devastating spills and produces huge quantities of toxic waste polluting water, damaging ecosystems and harming plants and animals. It is not the consumer usage, but the highly energy-intensive mining and manufacturing processes that are required to transform over 20 elements into the handheld electronic device that drive the vast majority of a smartphone’s annual carbon footprint (85-95%).
However, these serious environmental impacts of smartphones are not something that most people consider when they flock to buy the latest model of iPhone. The standout, quirky advertisements of Apple and other phone brands do not tell the grim side of the story. But wait, there is more. Millions of mobile phones are being thrown away every year. Still we are told that we need more, and mining companies go dig up more to make us the products we want. Extractive industries and sustainability.
Smartphones have the potential of being used for 5 to 10 years, but we use them only for an average of 12-24 months. Every month, we have new innovative models introduced in the market, tailored for more convenience and glamour. Consumers want faster, newer and better products, and extraction companies and smartphone providers keep giving them what they want. In any case, pleasure and pain are two sides of the same coin.
On one hand, we have consumers running after luxury and on the other hand we have indigenous communities whose land and human rights are being completely dismissed by the companies who work to get luxury for the rest of the world. Often, only the former side is visible to us while the latter lies hidden or is ignored. And who flips this biased coin? Those ‘indispensable’, greed-fed companies.
Two sides of the coin: Pleasure and pain
Let us continue to explore the idea further and try to retrace the path from consumers’ phones in a rich country like Singapore to the deadly extraction process that takes place in one of the poorest countries of the world, Congo, which also happens to be one of the landscapes with the richest mineral deposits. Take a metro ride for a couple of stops in Singapore and we can witness the penetration of mobile phones in the society. Almost all passengers, irrespective of age, are glued to their smartphones, eyes cast downward and fingers busy gaming or scrolling through Facebook or WhatsApp. Greenpeace and We Are Social Singapore have few interesting statistics. Since their 2007 release, about 7.1 billion smartphones have been produced globally and Singapore has had its fair share of users – the country boasts of 4.27 million smartphone users that account for 91% of its population. Extractive industries and sustainability.
Because of the profound diffusion of smartphone technology, it has become super easy to be connected and entertained. But, at whose expense? We have been looking at only the consumer side of things. What about production? At the very same moment when ecologically short-sighted consumers are busy clicking away on their phones and are sunk in the oblivion of unawares, workers employed by extraction companies in Congo are experiencing appalling, slave-like conditions as they mine for minerals to ensure that there is an unlimited supply of technologies. Thousands of miners, including children, dig by hand. As per a report by the German NGO RESET, workers as young as 10 years old make an average of 1 USD a day working in terrible environments devoid of health or safety standards, digging up materials such as cobalt, tin and tungsten that goes into the production of smartphones. Deaths, injuries, breathing problems and birth defects are commonplace. Extractive industries and sustainability.
Narrowing the intention-action gap
Extractive companies are nowhere close to being sustainable and will continue to be so unless the demand that drives them to exploit ruthlessly diminishes. Till then, companies will engage in greenwashing while continuing to drill for oil in the Arctic or minerals in Congo. On the consumer side, for most people, climate change remains a relatively abstract problem that might have little impact on their lives and may happen in the distant future to polar bears.
People downplay distant problems or those that haven’t affected their immediate family or friend circle. Many consumers, especially Millennials, say that they want products that are sustainable. Despite growing awareness, ethical consumerism is still a niche market and a frustrating paradox remains. Consumers who advocate the use of eco-friendly products and services do not follow through with their wallets or more modest demands. Going back to our previous example of smartphones – why won’t people stop going after new products and succumbing to nomophobia despite knowing their adverse social and environmental costs?
Sure, such devices look great and greet you with an endless mix of articles, emails and posts throughout the day, but the self-enforced isolation that they cause creates an adverse impact on our social development and reduces our empathetic capacity. Awareness alone is not enough. Empathy and compassion are what drives change. Narrowing this intention-action gap is therefore very important to decelerate demand for extractive product categories. Extractive industries and sustainability.
Consumer Backlash: The only solution
Almost all extractive companies have a business model that is inherently unsustainable and environmentally destructive. Their only effort at sustainability is the occasional philanthropy, which plays a marginal role in the strategy of the companies. Consumers should see right through this facade. But catching the attention is not enough – consumers should act. There should be a global abandonment of consumer selfishness – the feeling of “I am what I have”. Extractive industries and sustainability.
Only then would product advertisements stop playing on people’s needs for ‘false’ security and inadequacy. Only then would the few who run the extractive industry stop exploiting human nature – desire. It is the consumers who hold the key to put a stop on their own infinitely expandable desires. They should revolt against the unethical practices of the industry, but first, they must ‘walk the talk’. Instead of dismissing their own responsibilities of shaping a sustainable demand and leaving the duty to the production bodies, consumers should initiate change, develop compassion and shift their thinking to “I am what the planet has”.
Going Circular: Make simple, buy less, make it last
Shift in consumer thought process will force extractive companies to be sustainable and if they still hold onto traditional practices, there is the last arrow in the quiver – pressure from regulation. If consumer pressure does not move the companies, people can go to their respective governments – ignite the collective ire and make their voices heard. Governments can then enforce the circular economy concept to companies and demolish the ones that don’t adhere.
Grants and governmental aid can be made available according to the degree and pace of implementation of circularity. But how can an extractive company that engages in, say mining, play a critical role in a circular effort? As the primary source of minerals, the mining sector can influence downstream production processes to ensure that products are designed and produced in such a way that makes it easy to separate the minerals upon disposal, thus making their recycling and reuse a simple process.
Mining companies can work directly with manufacturers to come up with modular approaches to design and development. In the case of smartphone production, this could mean designing a device with separated blocks attached to a main board. This way, the lifespan of the smartphone can be extended as different blocks could be upgraded or repaired easily without the need to replace the entire device, thereby reducing wastage and demand for further exploitative activities.
By changing the way we ourselves as consumers buy and reuse smartphones, the unsustainable trajectory of smartphones can be transformed into something sustainable. It all starts with us, consumers. And this is just one example of a product.
Clean up during and after
Government regulations can make restoration processes mandatory and ensure that companies take full responsibility to restore the landscape of the region subjected to extraction. When extractive activities cease in an area, restoration processes must be completed by the concerned company. In fact, reclamation can begin while extraction is still occurring in another area of the mine. Thus, mining and restoration can go hand in hand throughout the life of a mine. The government should make sure it supervises these efforts. Extractive industries and sustainability.
Near impossibility is potential
Sustainability will never come naturally to extraction. Getting from today’s grim reality to tomorrow’s sustainable industry is definitely an exceedingly difficult task, but with time, effort and heart, what may seem impossible can become possible. But, given the long lead time for projects in the industry, consumers need to drive the change TODAY. As such, through their demand, companies would get started to set a vision and actively follow the path to sustainability. Extractive companies may be far from perfect, but nothing is impossible if the industry lets go of its conventional way of thinking and sets the pace for change with consumers leading the way.
Useful links:
- Link up with Megha Sureshkar via LinkedIn
- Read a related article: Sustainable extractive companies – the way to survival or conscientiousness?
- Discover the ESSEC Business School Asia-Pacific campus in Singapore
- Download this and other features in Global Voice magazine #14.
Learn more about the Council on Business & Society
The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.
Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.
- ESSEC Business School, France-Singapore-Morocco
- FGV-EAESP, Brazil
- School of Management Fudan University, China
- IE Business School, Spain
- Keio Business School, Japan
- Stellenbosch Business School, South Africa
- Trinity Business School, Trinity College Dublin, Ireland
- Warwick Business School, United Kingdom.
