Rio Tinto Environmental Pollution - Case Study Example

Sustainability Initiative Proposal: A Case of Rio Tinto Environmental Pollution Name Institution Course Date Executive Summary Rio Tinto is the world’s leading metal and mining company. However, the report has indicated that the British-Australian company is facing a number of sustainability issues, key among them being environmental pollution. The company’s operations cause massive pollution in different parts of the world, which impacts negatively on people and the environment. The report has highlighted the sustainability initiatives that Rio Tinto’s management should adopt to address the environment issues. These include promoting initiatives to manage air, climate change, land, and waste. Proper implementation of the proposed measures will impact positively on the environment, improve its reputation and has a positive influence on Rio Tinto’s bottom line as indicated with the help of the triple bottom line framework. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Rational 5 Options 6 Air 6 Climate Change 7 Land 7 Waste 8 Recommendation 8 Triple Bottom Line Impact Analysis 8 Risk Assessment 9 Implementation Plan 10 References 11 Introduction Rio Tinto is British-Australian mental and mining company. Founded in 1873, Rio Tinto has grown to become the world’s leading metal and mining company (Davis et al. 2000). Despite the growth and success that the company has registered over the years, the company faces a number of sustainability challenges that it needs to address because they affect the reputation and the ability of Rio Tinto to continue operating. The major sustainability issue that Rio Tinto should consider addressing has to do with pollution. The operations of the company are impacting negatively on the environment in all the countries where the company operates its mining activities. In the Salt Lake City, Rio Tinto is responsible for about 30% of air pollution, area that usually ranks lowest in terms of air quality. In Namibia, the operations of Rio Tinto is not only damaging the environment, but also impacting negatively on the health of the workers and the local population because of the radiation emitted by the uranium (Conde, 2014). In fact, reports from Namibia indicate that many of the former workers in Rio Tinto mines have since died from cancer and other unknown complications which they contracted when working on the mines. Additionally, the operations of Rio Tinto in Mongolia and other parts of the world have been a threat to the water supply to the local populations as well as biodiversity (Neate, 2013). In fact, the company is facing protest in almost all the countries, where it operates because of negative environmental impacts and human rights breaches. As such, to ensure sustainability, the management of Rio Tinto has no option but to initiate sustainable development programs that focuses on addressing the environmental issues that it is currently confronted with to ensure success. Rational As indicated above, Rio Tinto is facing environmental sustainability issues in almost all the countries where it operates and this affects its reputation and ability to continue operating. Therefore, the best way to address the issue it to promote sustainability development that focuses on addressing the environmental and health problems resulting from its operations. Sustainability development involves engaging in activities that meet the needs of the present generation without compromising the future generations’ ability to meet their own needs (Jackson et al. 2011). Therefore, addressing the environmental and health problems through sustainable development will help enhance the reputation of the company that is currently damaged. As things stand, Rio Tinto is associated mainly with negative image because of its adverse impacts on the environment and human health. As such, it is only by addressing the environmental problems through sustainable development that the company will be able to repair its image, thus enable it get more contracts even in countries, where it has been blacklisted for its adverse effects on the environment and human health. Addressing the sustainability issues it faces through sustainable development will also enable it avoid the lawsuits that are being filed against the company in many countries. There are many lawsuits ongoing in courts in different parts of the world for issues related to environmental damage and human health, as well as human rights abuses (Neate, 2013). These lawsuits are costly to the company and are affecting its bottom line. Besides the lawsuits, there are many instances of protest against Rio Tinto in different parts of the world where the company operates and this affects the company’s image. As such, adopting a sustainable development to deal with the environmental and health issues facing the company will go a long way in promoting sustainability of the company in the mining industry. Options Air Rio Tinto has several options available for it to address the environmental sustainability issues it face, which each strategy targeting each facet of environmental impact, including air, biodiversity, climate change, energy, land, waste and water. It is important for the management of Rio Tinto to recognize that the operations of the company results in the emission of large volumes of gases and particles that impact negatively on the atmosphere and population as explained earlier. The emissions result from a variety of activities, including burning fossil fuels, smelting metals and moving ores and waste (Davis et al. 2000). However, there are a number of things that Rio Tinto can do to minimize air pollution. The management of Rio Tinto should ensure that the emissions are constantly reviewed and proper controls are applied to minimize emissions. In particular, the company should ensure that emissions are controlled at source. To achieve this, Rio Tinto management can build a furnace to enhance production efficiency and to minimize air quality effects. The company can also minimize air pollution through regular monitoring of dust fall-outs to ensure that it is below the industrial and residential threshold. The environmental impacts of the company also impacts negatively on biodiversity (Neate, 2013). Therefore, as part of Rio’s sustainability initiative, the company should focus on managing biodiversity. To manage biodiversity, the management of Rio Tonto should develop a strategy that ensures that all sites understand the risk and impacts to biodiversity. In this case, sites that present serious risk to biodiversity come up with an action plan to understand and mitigate the impacts. The efforts that the company should adopt to minimize negative impacts on diversity include avoiding the use of poison chemicals or leaving them on the mining sites, as well as ensuring that waste is treated before being discharged. Climate Change The mining activities that Rio Tinto engages in emit large volumes of greenhouse gases into the environment and this is causing climate change (Davis et al. 2000). Currently, climate change is a serious environmental problem that the world is trying to address. Therefore, to address the climate change problem, Rio should consider minimizing its dependent on fossil fuel as a source of energy. Instead, the company should consider switching to alternative sources of energy such as solar, and wind, which are greener. Land Land is another area that is adversely affected by the operations of Rio Tinto. In areas that the company performs mining activities, forests are cleared to give room for mining activities. At the same time, the mining operations cause massive damage to the land by exposing them to erosion and this impacts negatively even to the lives of the local populations (Conde, 2014). To address the environment problems caused to land, the management of Rio Tinto should consider rehabilitating mining areas and to ensure that all disturbed lands are returned to the status as it were before land use. To achieve this, the company will have to ensure that rehabilitation activities are started at the earliest time possible during the operations’ lifecycle. Waste Rio Tinto can also address the environmental issues it faces by adopting effective waste management programs. The company generates large quantities of mineral and non-mineral wastes during operations and these impacts negatively on the environment and the workers and the local population (Davis et al. 2000). To minimize waste, Rio management should consider characterizing its waste, project the probable long-term behavior of waste and perform monitoring. Additionally, the company should ensure that waste is properly treated before disposal, which should also be conducted responsively. Recommendation Although there are many options available for Rio Tinto for addressing the environmental issues it faces, the best option is for Rio Tinto to build a furnace to enhance production efficiency and to minimize air quality effect. This is because the environmental problem that Rio Tinto causes has their genesis in mining operations itself. As such, building a furnace to improve production efficiency and minimize air quality impacts will help address most of the environmental problems highlighted above. Triple Bottom Line Impact Analysis The triple bottom line (TBL) is an accounting framework for analyzing a firm’s sustainability programs in terms of social, economic and environmental sustainability dimensions ((Jackson et al. 2011). On environmental dimension, the proposed measures to address the environmental issues will impact positively on the environment as it would ensure that Rio Tinto minimizes its emission of carbon into the environment; ensure proper land use and disposal of waste products. For instance, Rio Tinto ranks among the companies with the largest emission of greenhouse gases to the environment that causes global warming. Therefore, the proposed measures, such as ensuring switching to greener sources of energy, such as solar and wind will see the company cut down its carbon emission, thus mitigating climate change, which is beneficial to the environment. On economic dimension, the proposed measures will impact positively on Rio’s bottom line. Although implementing the proposed measures will involve huge investments that would be costly for Rio Tinto, it will impact positively on the bottom line of the company as it would portray the firm as a responsible company. This way, the company will be able to attract customers to the company, thus resulting in increased revenue and profits. Besides, addressing the environmental problems as detailed above will help minimize the lawsuits that have always impacted negatively on Rio Tinto’s profits (Jackson et al. 2011). On social dimension, the measures to address the environmental problem will impact positively on the people, especially workers and the local population by ensuring that their health is not compromised (Jackson et al. 2011). To the investors, addressing the environmental problems will help improve the reputation of Rio Tinto, thus making it attractive for investors, which in turn will results in higher returns on their investments. Risk Assessment As much as the measures to address the environmental issues facing Rio Tinto would be of benefit to the company and its stakeholders, a number of risks are involved that the company will have to find a way of overcoming to ensure that the proposed measures are implemented. First, the company faces the risk of incurring high cost to implement the proposed measures. Implementing the proposed measures will require huge financial investment that might put Rio Tinto into liquidity problems. Second, the company faces the risk of resistance from part of the managers, shareholders and staff that might not want the proposed changes be implemented. Additionally, some operations might have to be stopped to implement the proposed measures and this is likely to affect the firm’s performance. Implementation Plan Considering that there are many issues to be addressed, it is projected that it will take approximately six months to implement the proposed initiatives. In the first month, the company will put in place the resources needed and ensure that it has the right manpower to implement the measures proposed. The other four months will be spent implementing the proposed initiatives. References Conde, M. (2014). Namibia’s Rössing – Rio Tinto mine causes environmental and health problems. Retrieved from http://www.ejolt.org/2014/05/namibias-rossing-rio-tinto-mine-causes-environmental-and-health-problems/ Davis, R. A., Welty, A. T., Borrego, J. Morales, J. A., Pendon, J. G., & Ryan, J. G. (2000). Rio Tinto estuary (Spain): 5000 Years of pollution. Environmental Geology 39(10), 1107-1116. Jackson, A., Boswell, K., & Davis, D. (2011). Sustainability and triple bottom line reporting –What is it all about? International Journal of Business, Humanities and Technology, 1(3), 55-59. Neate, R. (2013). Rio Tinto accused of environmental and human rights breaches. The Guardian 18 April, viewed 10 November 2016 https://www.theguardian.com/business/2013/apr/18/rio-tinto-environmental-human-rights-breaches Read More