Only a couple of hands rose during our presentation at the CIM BC conference when we inquired if our audience was familiar with either of the Task Forces below.
Key discussion points
We believe that TCFD and TNFD may one day become as important as the ICMM GISTM (Global Industry Standard on Tailings Management). Furthermore, the term "Financial Disclosure" hints, and the protocols are quite clear on this, at the requirement to disclose “real numbers”, and not only deliver “nice words”.
Innovation and change often come with side effects. That means that “going green” or “going circular” or whatever new wave a company decides to ride, will generally come with side effects. There is no magic pill, or snake oil that ensures success if hazards and risks have not been carefully evaluated.
In our presentation, we discussed an industry example whereby a mine that had adopted a “no dam” solution was extensively publicized, and consequentially obtained an environmental award. Mother Nature did not take long to show the promoters that even “no dams” solutions can fail.
Closing remarks
We have often expressed our concerns on excessive enthusiasm with innovation. A rational approach to innovation requires understanding upward and downward risks. Upward risks are those that will bring a positive reward such as a gain. Downward risks are those that bring nefarious results.
Unfortunately, even nowadays, industries can look only at the rosy side of risk, i.e., to the upward side. Years ago, we were claiming that the common practice approach of NPV is one of the culprits of many failed projects. Indeed, it’s formulation rarely includes risks, but simply “gains and expenses”. As a result, especially in times of climate change, many projects with robust NPVs may be “dead men walking”.
