Making mining more sustainable requires new perspectives on investments and financial decision-making. Swedish Mining Innovation has funded an initiative to resolve this, by developing the holistic value model.
With a new model, the industry can both show that ESG (environmental, social, governance) factors have a real impact on investment decisions, but also that by considering these factors new types of financially relevant short and long-term risks and opportunities will be included, and hence improve financial transparency and performance.
The issue – lack of transparency and information
The project is initiated and led by Nordic Strategy Partners along with a cluster of international industry stakeholders.
– While ESG factors have an immediate impact on financial results, they are not typically included in financial modelling. By changing this, mining companies can make more informed investment decisions on all their projects where positive and negative ESG-effects are directly included, Niklas Grönberg from Nordic Strategy Partners explains.
A new perspective on profitability and growth
To achieve this, the project team has assessed and bench-marked over 200 global standards, models and frameworks within the area of ESG and financial modelling. Industry players and key organizations in Sweden, Europe and Canada have contributed with insights.
– We’re overwhelmed by the response on this project. All over the world and across industries, organizations recognize the need for a tool that integrates ESG-factors, but so far, no-one has a solution. A key challenge, but also an opportinity, is how quickly this field is evolving – it’s been crucial to continuously align our progress with new frameworks and even regulatory changes, Grönberg continues.
Impact and next steps
The holistic value model is currently being piloted by Boliden, and Nordic Strategy Partners are developing industry guidelines for how to adopt and use the holistic value model in mining organisations.
– We are very excited to present the first generation of a holistic value model to stakeholders and we look forward to further develop and enhance this tool in partnership with the industry, Grönberg concludes.
