The first month of 2024 brought significant regulatory, investment, and legal developments shaping the sustainability landscape for mining and construction businesses. Key highlights include:
- Expanded carbon pricing schemes: New Australian and international policies are increasing compliance costs.
- Surge in green steel investments: Major mining and construction companies are funding low-carbon steel production.
- Growing ESG litigation risks: Companies face heightened legal scrutiny over climate claims and environmental impact.
These trends signal rising financial, operational, and legal risks, requiring executives to act proactively.
Expanded Carbon Pricing: Higher Costs for Emissions-Intensive Industries
January 2024 saw expansions in carbon pricing schemes, affecting businesses with high emissions footprints.
Case Study: The Australian government lowered the baseline threshold for Safeguard Mechanism facilities, requiring more companies to pay for carbon offsets (Clean Energy Regulator, 2024). Additionally, the EU’s Carbon Border Adjustment Mechanism (CBAM) increased costs for Australian exporters of steel, aluminium, and cement.
Industry Response
- BlueScope Steel partnered with carbon credit firms to offset its emissions liabilities, securing lower CBAM charges.
- BHP and Rio Tinto adjusted their carbon trading strategies, purchasing higher-quality offsets to reduce penalties.
- Downer Group integrated carbon cost projections into its long-term financial planning to manage future risks.
Executives must assess carbon pricing impacts, integrating compliance costs into business strategies.
Green Steel Investments: Reducing Carbon Footprints in Mining and Construction
The global push for green steel gained momentum in January, with new investments in low-carbon production technologies.
Case Study: Fortescue Metals Group (FMG) committed $2 billion to green steel projects, including hydrogen-based steelmaking, aiming to reduce iron ore processing emissions (FMG, 2024).
Industry Response
- Bluescope Steel secured $700 million in government grants to scale up its electric arc furnace technology.
- BHP partnered with Chinese steelmakers to trial low-emissions iron ore processing methods.
- Multiplex integrated green steel into commercial building projects, cutting embodied carbon by 20%.
Executives must identify supply chain opportunities to incorporate low-carbon materials in operations.
ESG Litigation Risks: Companies Facing Legal Action Over Greenwashing Claims
Legal action against misleading ESG claims intensified in January, increasing corporate liability risks.
Case Study: The Australian Competition and Consumer Commission (ACCC) filed lawsuits against three major companies for false sustainability claims, including:
- A construction firm falsely advertising materials as “100% recycled” without verification.
- A mining company overstating its decarbonisation progress in investor reports.
- An energy provider misrepresenting gas projects as “carbon-neutral” (ACCC, 2024).
Industry Response
- Stockland Group implemented third-party ESG audits to verify sustainability claims.
- Lendlease established an internal compliance team to review all public climate statements.
- Government agencies launched new ESG reporting guidelines to improve corporate transparency.
Executives must strengthen ESG compliance and avoid greenwashing risks by ensuring all claims are evidence-based.
Strategic Imperatives for Executives
- Manage Carbon Pricing Risks: Assess carbon cost implications and optimise offset strategies.
- Invest in Low-Carbon Materials: Collaborate with green steel suppliers to reduce supply chain emissions.
- Strengthen ESG Compliance: Conduct independent sustainability audits to avoid litigation risks.