Sustainable copper supply chains: Evaluating ESG risks through the lens of regulatory compliance and risk assessment strategies

Abstract

The global demand for copper is projected to increase by approximately 3.5 times by 2050, yet the mining industry faces significant challenges in meeting this demand due to inherent risks within the copper supply chain. The industry's ability to address the supply chain risks will largely depend on its capacity to manage Environmental, Social, and Governance (ESG) issues. Leveraging current technology and real-time data collection is crucial for efficiently and effectively mitigating ESG risks, as it enables prompt identification and response to potential issues. However, the absence of standardized metrics for ESG compliance presents a critical barrier. This study aims to develop a retrospective and qualitative assessment to evaluate ESG risks in the copper supply chain through a regulatory compliance lens and apply risk assessment strategies across different stages of the supply chain. Our findings indicate that while local, national, and international regulations, rights, and guidelines are extensive, effective application and adherence to these standards can significantly reduce ESG risks. We conclude that regional governments should play a leading role in establishing a robust ESG framework with accountability and transparency to support sustainable copper supply chains and ensure the industry's future viability. We recommend the integration of data-driven technologies in ESG assessment and compliance.