The Negative Impact of ESG on the Australian Minerals Supply Chain

Abstract

With the full implementation of the ESG standards in Australia, supply chain management in the mining industry faces challenges. This research utilized Mineral Resources Limited (MRL) as an example to discover how environmental (E), social (S), and governance (G) factors affect supply chain management. It applies MRL management costs and operations to analyze and integrate with the academic literature on ESG frameworks and supply chain management. It concludes with three points: Environmental management issues affect the delivery of minerals downstream in the supply chain, and an EMS system should be applied to manage them dynamically. Community cooperation and employment equity issues affect the cooperation and operation of mining businesses upstream of the supply chain, so the Community Engagement and Development Program (CEDP) system should be adopted to maintain community communication. Non-transparent governance issues affect both upstream operations and shake downstream investors' confidence. The Governance Enhancement and Compliance Programme (GECP) system can enhance decision-making transparency and compliance with governance policies. This research bridges the gap in negative ESG impacts on the mining industry. It proposes three new systems that serve as a model for future company adoption to cater to ESG standards.