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Like all major industries in today’s environment, mining, minerals, and metals companies know they need to lower their greenhouse gas emissions and reduce their carbon footprints. However, a program for collaboration would help as global decarbonization also fuels the demand for mined natural resources. As the world progresses toward electrification and digitalization, it needs increased access to critical minerals such as nickel, copper, aluminum, cadmium, and lithium. All of these are required to build new infrastructure, EV batteries, photovoltaics, and AI-ready computing equipment. So mining, mineral, and metal companies and their extended ecosystem of suppliers are battling on two fronts. They need to reduce their carbon emissions while finding ways to step up the production of critical materials.
Modern requirements in carbon accounting
As companies focus on their environmental, sustainability, and governance (ESG) goals, they must address and document three scopes of decarbonization.
- Scope 1 involves decarbonizing regular day-to-day operations, including efficiency and conservation efforts.
- Scope 2 includes decarbonizing the company’s power supply and considering the carbon footprint of energy purchased from a power producer or utility.
- Scope 3 requires decarbonizing the company’s supply chain, including supplier business operations.
Source: Adapted for WP99, GHG Corporate Value Chain (Scope 3) Accounting and Reporting
Scopes 1 and 2 fall typically within a business’s direct area of control. They may require learning and investment, but managing and reporting on those elements is comparatively easy. Scope 3, however, requires companies to be able to report on and account for all supplier behavior. Given the number of suppliers a company may have – from dozens to hundreds or even thousands – this becomes a considerable challenge. A recent Loadstar article revealed that more than half of companies are unprepared to meet the incoming European Union regulations by quantifying their Scope 3 emissions. Similar laws are coming into play in multiple regions. Companies around the globe are likely equally unprepared to address these new regulatory requirements.
An estimated 75% to 95% of carbon emissions from mining companies come from their Scope 3 inputs. Companies must find a way to ensure comprehensive and accurate reporting on Scope 3 across the industry. However, this is a journey best taken collaboratively.
Introducing Materialize
To help mining, mineral, and metal companies confront this challenge, Schneider Electric has launched a new initiative called Materialize in association with the industry non-profit Global Mining Guidelines Group (GMG). Materialize is an accelerator that builds a strong collaborative industry network. It will educate and empower the sector’s supply chain to decarbonize their operations and positively contribute to net-zero targets for themselves and the companies they supply.
Before Materialize, Schneider Electric launched supply chain decarbonization through several successful programs across different industries. The Energize program for pharmaceutical manufacturers is one example. Introduced in 2021, Energize has over 20 major pharmaceutical sponsors and over 500 registered suppliers. The pharmaceutical program launched five global power purchasing agreements to help members access greener energy at a reduced cost. Schneider Electric also introduced programs for the semiconductor value chain, called Catalyze, and for the aerospace industry, called RENEWay. These programs allow sponsor companies to demonstrate industry leadership around supply chain decarbonization efforts and lead their entire supply chain toward a sustainable approach.
Advantages for Materialize members
Mining, mineral, and metal companies looking to address carbon emissions can join Materialize as a program sponsor and invite their entire supply chain to participate. Sponsors and suppliers gain access to a variety of tools via a digital platform where they can
- engage expert guidance on energy efficiency, decarbonization and GHG reduction,
- access educational resources around renewable energy and digitalization of sites
- opportunities to participate in collective clean energy purchase agreements,
- and more.
The Materialize program focuses on both target segment companies and their suppliers. The goal is to eventually build a comprehensive collection of carbon emissions data across companies at every level of the supply chain, enabling and simplifying Scope 3 reporting. The accelerator is action-orientated and will help suppliers with their Scope 1 reductions through efficiency and electrification efforts. It will also help suppliers with Scope 2 reductions through renewables and clean energy initiatives. At the same time, it will assist suppliers with circularity through product lifecycle and end-of-life recycling plans.
The potential for positive impact already attracted the attention of additional stakeholders. We are considering an extra category to include industry organizations and government agencies that wish to endorse the program.
As sponsors and suppliers join, the community’s insight and suggestions will refine the program and its tools. Ultimately, community input will ensure that Materialize truly meets the specific needs of the mining, minerals, and metals market.
How to engage
Mining, mineral, and metal companies contribute essential resources for global decarbonization progress. Crucially, they need to simultaneously address their own environmental concerns. To support the market, they need workable solutions that simplify the way forward. Joining a program like Materialize is one opportunity to work as part of the mining community to build a collaborative and sustainable future.
Please visit the website if you’d like to become a Materialize program sponsor or learn more about Schneider Electric and/or the Global Mining Guidelines Group.
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