I recently attended the International Finance Corporation (IFC) Corporate Responsibility Forum in Washington, D.C. – an event for CR practitioners in the extractives sector and those of us who provide technical assistance to oil, gas and mining companies on the IFC’s Performance Standards. It was a very thought-provoking event.
Social investments are often a condition of IFC financing or a contractual obligation of host governments. There may be a considerable lag before new extractives projects generate taxes or royalties that governments can spend on social and economic development, especially with green-field projects. Further, today’s oil, gas and mining operations are highly technical and mechanized, creating fewer prospects for employment beyond the construction phase. Together these factors have an enormous influence on stakeholder expectations and extractives companies’ abilities to acquire and retain their ‘social license to operate’.
As poll data has indicated, trust in companies remains at an all-time low thanks to the global financial crisis. Yet stakeholders expect the private sector to find innovative solutions to our critical sustainability challenges. The bar has therefore been raised for companies in demonstrating the value they create through resource extraction.
Two sub-themes of the conference, Beyond Philanthropy: Strategic Community Investment and Measuring the Returns on Sustainability Investment spoke to this reality. There were two presentations I found particularly useful.