Coal Operations

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The Coal Operations industry includes entities that mine coal and those that manufacture coal products. Mining activity covers both underground and surface mining, and thermal and metallurgical coal.

Relevant Issues (9 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.
  • Environment
    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
    • Air Quality
    • Energy Management
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
    • Ecological Impacts The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
  • Social Capital
    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
    • Customer Privacy
    • Data Security
    • Access & Affordability
    • Product Quality & Safety
    • Customer Welfare
    • Selling Practices & Product Labeling
  • Human Capital
    • Labor Practices The category addresses the company’s ability to uphold commonly accepted labor standards in the workplace, including compliance with labor laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labor, forced or bonded labor, exploitative labor, fair wages and overtime pay, and other basic workers' rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labor and freedom of association.
    • Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
    • Employee Engagement, Diversity & Inclusion
  • Business Model and Innovation
    • Product Design & Lifecycle Management
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
    • Supply Chain Management
    • Materials Sourcing & Efficiency
    • Physical Impacts of Climate Change
  • Leadership and Governance
    • Business Ethics
    • Competitive Behavior
    • Management of the Legal & Regulatory Environment
    • Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
    • Systemic Risk Management

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for: Coal Operations

GHG Emissions
  • Greenhouse Gas Emissions

    Coal operations are energy intensive and generate significant direct greenhouse gas (GHG) emissions, including carbon dioxide from fuel use and methane released from coal beds during mining and post-mining activities. Regulatory efforts to reduce GHG emissions in response to the risks posed by climate change may result in higher operating and capital expenditures based on the magnitude of their direct emissions. Operational efficiencies can be achieved through the cost-effective reduction of GHG emissions. Such efficiencies can mitigate the potential financial impact of increased fuel costs from regulations that limit—or put a price on—GHG emissions.
Water & Wastewater Management
  • Water Management

    Coal operations have an impact on both the quality and quantity of local water resources. Coal operations are water intensive. The use of water in coal washing to remove sulphur, cool drilling equipment and transport coal in slurry pipelines can impact resources. The severity of these risks can vary depending on the region’s water availability and the regulatory environment. Reducing water use and contamination also could create operational efficiencies for entities and lower their operating costs. Wastewater treatment and discharge often is regulated by jurisdictional authorities. Violating limits on selenium, sulphate and dissolved solids could affect coal operations entities through significant penalties, compliance costs, delays in production or higher costs related to mine closure.
Waste & Hazardous Materials Management
  • Waste Management

    The Coal Operations industry generates large volumes of non-mineral and mineral waste, including solid rock and clay waste, process refuse, and liquid coal waste, which may contain toxic elements such as mercury, arsenic, or cadmium. Waste produced during coal mining and processing operations, depending on its type, can be treated, disposed of, or stored off- or on-site—in impoundments or old mine pits. Improper disposal or storage of hazardous materials or mining waste can present a significant long-term threat to human health and ecosystems through potential contamination of groundwater or surface water that is used for drinking or agriculture purposes. This poses operational and regulatory challenges for coal operations entities. Entities that reduce waste streams while implementing policies to manage risks related to waste containing heavy metals and that have rigorous hazardous waste disposal practices may see lower regulatory and litigation risks, remediation liabilities, and costs.
Ecological Impacts
  • Biodiversity Impacts

    Coal operations can have a range of impacts on biodiversity. Surface mining and mountaintop removal can alter the landscape, removing vegetation and wildlife habitats. Acid mine drainage is particularly significant: it is highly acidic water, rich in heavy metals, formed when surface and shallow subsurface water comes into contact with coal mining overburden, and can have harmful effects on humans, animals, and plants. Biodiversity impacts of coal operations can affect the valuation of reserves and create operational risks. The environmental characteristics of the land where reserves are located could increase extraction costs as a result of increasing awareness and protection of ecosystems. Entities could also face regulatory or reputational barriers to accessing reserves in ecologically sensitive areas, such as the designation of areas where reserves are located as protected areas. Coal operations entities face regulatory risks related to reclamation after a mine is decommissioned, per applicable regulatory requirements to restore mined property according to a prior, approved reclamation plan. Material costs may arise from removing or covering refuse piles, fulfilling water treatment obligations, and dismantling infrastructure at the end of life. Furthermore, ongoing coal operations are subject to laws protecting endangered species. Entities that have an effective environmental management plan for different stages of the project lifecycle may minimise their compliance costs and legal liabilities, face less resistance in developing new mines, avert delays in project completion, and avoid difficulties in obtaining permits and accessing reserves.
Human Rights & Community Relations
  • Rights of Indigenous Peoples

    Entities in the Coal Operations industry can operate and hold assets in areas occupied by indigenous peoples. Entities perceived as contributing to human rights violations or failing to account for indigenous peoples’ rights may be affected due to protests, riots, or suspension of permits. They could face substantial costs related to compensation or settlement payments, and write-downs in the value of their reserves in such areas. In the absence of country laws to address such cases, several international instruments have emerged to provide guidelines for entities. These instruments include obtaining the free, prior, and informed consent of indigenous peoples for decisions that affect them. With greater awareness, several countries are also beginning to implement specific laws protecting indigenous peoples’ rights, creating increasing regulatory risk for entities. Furthermore, indigenous peoples are often vulnerable sections of the population, with limited capacity to defend their unique rights and interests.
  • Community Relations

    Coal operations take place over a number of years and can have a wide range of community impacts. Community rights and interests may be affected by the environmental and social impacts of operations, air emissions, waste generation, wastewater discharges, and decommissioning activities. Coal operations entities often need support from local communities to be able to obtain permits and leases and conduct their activities without disruptions. The expected value of reserves could be affected if the community interferes or lobbies its government to interfere with the rights of a coal entity in relation to those reserves. In addition to community concerns about the direct impacts of projects, the presence of coal mining activities may give rise to associated socioeconomic concerns related to education, health, and livelihoods. Coal entities that are perceived as engaging in rent-seeking and exploiting community resources without providing any socioeconomic benefits in return may be exposed to the risk of resource nationalism actions by host governments and communities that restrict their activities or impose additional costs. Entities in the extractives industries can adopt various community engagement strategies in their global operations to manage risks and opportunities associated with community rights and interests, such as integrating community engagement into each phase of the project cycle. Entities that adopt a “shared value” approach may be able to provide key socioeconomic benefits to communities while maintaining profitable operations.
Labor Practices
  • Labour Relations

    Coal mining entities face inherent tension between the need to lower the cost of labour to remain price- competitive and the need to manage human resources to ensure long-term performance. Working conditions related to coal operations are usually physically demanding and hazardous. Labour unions play a key role in representing workers’ interests and managing collective bargaining for better wages and working conditions. This makes the management of labour relations critical, as conflict with workers can result in labour strikes and other disruptions that can delay or stop production, leading to significant lost revenue and reputational damage. Continued labour stresses can impact the long-term profitability of the entity. At the same time, positive outcomes of effective labour engagement can include enhanced work practices, labour utilisation, as well as the reduction in safety incidents, accidents, or fatalities.
Employee Health & Safety
  • Workforce Health & Safety

    Safety is critical to coal mining operations due to the often hazardous working conditions. Fatalities or injuries can result from a number of hazards associated with the industry, including accidents, cave-ins, explosions, and flooding. Due to these hazards, the industry is characterised by higher-than-average fatality and injury rates. Coal miners are also susceptible to long-term health risks such as chronic lung disease, commonly known as “black lung” disease, as well as mental health problems. Specific federal health and safety laws protect coal mining workers and make provisions for compensation for black lung disease. These can impose additional costs on entities or lead to regulatory penalties. Changes in legislation can result in additional liabilities. An entity’s ability to protect employee health and safety, and to create a culture of safety and well-being among employees at all levels, can help prevent accidents, mitigate costs and operational downtime, and enhance workforce productivity.
Business Model Resilience
  • Reserves Valuation & Capital Expenditures

    Coal entities may be unable to extract a significant proportion of their coal reserves if greenhouse gas (GHG) emissions are controlled to limit global temperature increases. Stewardship of capital resources while considering medium- to long-term trends, particularly related to climate change mitigation actions, is critical to prevent asset impairment and maintain profitability and creditworthiness. Globally, regulations and policies are and may continue to be put into place to limit GHG emissions from coal-fired power plants—the customers of coal entities—thus reducing demand for and the price of coal. Coal demand also is being affected by regulations governing other harmful air emissions that apply to coal-fired power plants. An expansion of GHG-mitigation regulations may increase the magnitude of potential financial impacts in the medium to long term. Along with improved competitiveness of alternative energy technologies, these jurisdictional regulations and policies pose long-term risks for the reserves and capital investments of coal operations entities.
Critical Incident Risk Management
  • Tailings Storage Facilities Management

    Coal waste impoundments or fine coal refuse ponds, also called tailings storage facilities (TSFs), can leak and contaminate water supplies when mismanaged, potentially leading to adverse impacts to the environment or human health. These impacts may carry financial implications such as regulatory penalties, compensation payments, and remediation or compliance obligations. Entities’ ability to lower the number and size of fine coal refuse ponds and ensure the structural integrity of impoundments can help minimise such impacts. Even though the type of materials stored in coal refuse impoundments are characterised with lower flowability than those in the Metals & Mining industry, a catastrophic failure of such facilities (e.g., a dam failure) can still release significant volumes of waste and materials that are potentially harmful to the environment, leading to high-consequence impacts on ecosystems, human livelihood, local economies, and communities. Such catastrophic incidents may result in significant financial losses for entities and may erode their social license to operate. Robust processes and approaches to tailings facilities design, management, operation ,and closure, as well as appropriate management of associated risks, can help prevent such incidents from occurring. Entities that adopt robust practices to maintain the safety of TSFs may do so through assigning accountability for tailings management at the highest levels of the entity, conducting frequent internal and external independent technical reviews of TSFs, and ensuring that mitigation measures are implemented in a timely manner in case of a safety concern. Additionally, a strong safety culture and well-established emergency preparedness and response plans can mitigate the impacts and financial implications of such events should they occur. Company obligations related to long-term remediation and compensation for damages may result in additional financial impacts in case of a failure. An entity’s ability to meet such obligations after an incident occurs is an additional component of emergency preparedness.

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