Navigating asset transitions for a sustainable and equitable future
Closing major assets like power stations or mines can profoundly impact local communities, sometimes leading to job losses, a decline in local services, and a drastic reduction in population. In today’s world, there’s a clear expectation that mining and utility companies navigate these transitions thoughtfully. This requires developing a comprehensive stakeholder consultation and communication engagement plan, one that communicates a responsible transition and explores a wide variety of options to support impacted stakeholders. The industry is seeing a growing focus on ensuring that external stakeholders are included more as part of this process to consider the community and socio-economic impact of decisions made. By involving the right people and resources, we can better support communities through these challenging changes, minimising any negative impacts and paving the way for a more sustainable future.
What does a sustainable and equitable asset transition look like?
Australia has robust environmental standards for asset closure, requiring thorough land assessments and remediation to make sure the land is safe, stable and non-polluting. In many cases, carbon and biodiversity offsetting is employed as part of the transition. However, there is room for improvement in integrating economic, social, and intergenerational equity into these transitions.
Traditionally, land reuse options — like reforesting, turning land into grazing areas, or creating water reserves — can take 20 to 30 years to develop. These approaches often fail to generate the economic activity needed to replace the jobs lost when a major asset like a power station or mine closes. The result can be “ghost towns” where there are few opportunities for those left behind.
Arguably, in some regions, the voices of traditional landowners are not adequately sought or captured prior to asset planning and transition. Without legislative requirements and strong company values and strategies to support positive indigenous outcomes to enforce such practices, some companies can still avoid engagement with these groups when defining what success looks like for the transition of an asset. This kind of oversight risks undermining the cultural and social fabric of the community and overlooks the opportunity to co-create more inclusive and sustainable solutions that are respectful of cultural heritage.
For asset transition to leave a better, more inclusive legacy, we need to involve all stakeholders, including traditional landowners, and create economic opportunities that align with the community’s needs, values and aspirations. It means thinking beyond short-term fixes and working towards solutions that offer long-term benefits for generations now and into the future.
What are our options?
Land capability or suitability assessment is a critical step in determining the future of sites undergoing transition. In Australia, the process involves more than just deciding what to do with the land. It’s about navigating complex zoning constraints, environmental considerations, and community, business and socio-economic needs to find the best possible future use.
Many companies are open to a variety of ideas for repurposing land, from creating parks and hotels to developing spas and recreational areas. The reality is that many sites, particularly those associated with industrial activities, like coal-fired power stations, face a range of limitations that may present barriers to land uses more sensitive in nature.
As an example, land contaminated by metals, hydrocarbons and other containments and remediation requirements often restricts a transition to light industrial use, making more ambitious and sensitive land use projects difficult to realise. On the other hand, large areas of former mining sites can be better suited to agricultural reuse, depending on limitations associated with steep slopes and available remediation options.
Another key factor to consider is the financial viability of either retaining ownership or selling the land. The land rehabilitation process required to make a site suitable for a new purpose can be costly. Most companies will naturally lean towards options that offer the highest returns with the most cost-efficient rehabilitation and least long-term liabilities. This financial bias can sometimes limit the scope of creative or community-focussed land reuse projects.
Asset transition also offers the opportunity to embrace the principles of a circular economy. Companies can repurpose materials from existing property, plant and equipment for new developments on the land, reducing waste and potentially lowering costs. Taking this approach supports sustainability goals while also adding in a layer of innovation to the asset transition process.
Who do we need to involve?
Involving the right stakeholders is crucial for asset transitions to be sustainable and equitable, starting with local communities and governments. Communities are looking to companies for guidance on potential land uses for transitioning assets and are eager to share their own insights about what will work best for them. A collaborative approach means the transition will align with the needs and aspirations of those directly impacted.
State governments and local councils play a significant role in shaping the outcomes of asset transitions. They have the power to influence regional planning, making sure considerations like housing affordability, transport and job creation are factored into the decision-making process for potential land uses. When communities express strong support for a sustainable and equitable transition, local governments can be instrumental in driving the necessary changes, improving planning, establishing legislation and enforcing compliance to achieve these goals.
While we need government bodies and asset owners to lay the groundwork for positive asset transitions, it’s just as important to bring in people with big, bold ideas. Innovators from the private sector, local businesses, academia, or the community can offer fresh perspectives and creative solutions, making sure the transition is both sustainable and forward-thinking.
According to GHD’s recent CROSSROADS report, more than 70% of citizens in all surveyed countries agree that governments should do more to grow community understanding about the importance of clean energy and the associated infrastructure required to make it happen. In Australia, 64% of those surveyed believe the switch to clean energy will open new industries and jobs for their communities. The substantial support for clean energy underscores the need for governments and the energy industry to invest in and advocate for sustainable energy solutions as part of their asset transition plans.
A roadmap for asset transition
As industries grapple with the challenges of the energy transition, asset transition planning has become a crucial part of the process. Sectors like mining and coal-fired power are already looking decades ahead, with some planning for closure at the very start of the asset lifecycle. Foresight and early planning are essential. Waiting until just a few years before closure to start thinking about the future of a site is far too late.
The earlier the planning, the more opportunities there are to transition sustainably and equitably. Delaying these decisions not only puts the success of the transition at risk but also threatens the wellbeing of affected communities.
So, what should you do if you’re on the cusp of an asset transition? Start planning now. Engage with local communities, businesses and governments early and often. Look beyond traditional land reuse options and explore innovative approaches that align with both economic and environmental goals.
Asset transition is more than a logistical challenge — it’s an opportunity to do right by the environment, the economy, and the community.
Michelle Kiejda
Digital divide threatens corporate journey to net zero
A deep digital divide is emerging in corporate approaches to sustainability, potentially undermining Australia’s journey to net zero, according to Lisa Zembrodt, principal and senior director of Sustainability Business for Schneider Electric.
The ‘Sustainability Index, 2024’, a survey commissioned by Schneider Electric, a global leader in the digital transformation of energy management and automation, highlights this growing risk. It surveyed more than 500 corporate decision-makers across industries and the nation on sustainability and their progress towards net zero.
“The Sustainability Index reveals a digital divide between those with access to digital data and analysis, and those lagging in digital adoption,” Zembrodt said. “We found two-thirds of companies are still relying on energy bills or spreadsheets to inform their energy management.
“Most companies agreed that data limitations were impacting their decision-making, she said. “This is a significant barrier to monitoring and improving energy efficiency and sustainability.”
These contrasting approaches are reflected in a gap between companies planning and acting to reach net zero, and those lacking any strategy or commitments to reduce their emissions, Zembrodt said.
The ‘Sustainability Index’, now in its fourth year, found that most business leaders endorsed the energy transition and 70% agree that sustainable transformation provides a competitive edge.
However, the survey found that less than 1 in 5 companies have a decarbonisation roadmap or strategy in place, and 40% are not acting to decarbonise.
In more positive news, nearly three-quarters of companies surveyed said digital technology plays a key role in achieving sustainability, and a majority are increasing spending on digital transformation.
More than a third of businesses are using or planning to use AI to help manage their decarbonisation transformation, the index revealed. It demonstrated a flip side to AI’s intensive energy appetite, Zembrodt, said.
Acting on decarbonisation requires digital data and analysis, said Zembrodt. “Information is power, data is key to managing climate risk — without it, companies don’t have insights into what’s driving their emissions.
“If companies have access to real-time data, combined with control and analysis, there is much greater scope to respond to emerging issues, see where there are inefficiencies, pivot where possible and increase sustainability.
“Technology ranging from digital twins to monitoring, visualisation and automation are among the quickest ways to understand and reduce emissions.”
Compared to three years ago, 46% of companies stated they were investing more in AI and analytics, while only 5% were investing less.
Nearly one in 10 companies say they are already using artificial intelligence as a resource for decarbonisation transformation, the survey found. One in four say they are implementing AI strategies and another 29% said they were discussing doing so.
Zembrodt said that although AI processes were energy intensive, productive uses of AI included advanced algorithms to reduce energy consumption and emissions by optimising energy intensive processes such as heating and cooling systems in buildings. It can also schedule and optimise energy demand to alleviate consumption peaks.
“The role of technology is critical in the management of the net zero transition,” said Zembrodt. “Digital tools can also offer great support for business in monitoring and controlling emissions.”
The survey found that 53% of companies were increasing their investment in digital transformation, 39% in automation, and 36% in renewable power. Among respondents, three in four agreed that digital can help deliver their company’s sustainability goals.
“This survey shows companies increasingly recognise the critical role technology plays in moving to a low carbon economy, with most investing more in digital transformation than they were three years ago.”
However, Zembrodt warned that although businesses see sustainability as offering a competitive advantage, many companies were failing to realise the urgency of climate action.
“With new climate-related financial disclosure regulations rolling out next year, having a roadmap to transition your business to the low-carbon economy will be essential. Companies should urgently develop and implement a net zero plan.”
The disclosure rules — based on standards set by the International Sustainability Standards Board — will require companies to reveal extensive information on climate-related issues, including governance, strategies, risk management and targets.
Australia was “years behind” leading nations on climate reporting, with a lack of information making investors — who are increasingly focused on climate action and climate risks — unsure when weighing up where they put their money, Zembrodt said.
In the survey, business leaders identified the main barriers to adopting sustainable solutions: 37% cited a lack of financial resources, 36% said their business did not see it as urgent, and 33% cited a lack of government incentives.
The index demonstrates that companies want more government support to decarbonise. One-third of respondents said regulation is the main driver for decarbonisation and most (81%) believe that the government should provide financial incentives to support sustainable transformation.
Zembrodt urges companies to begin their journey to net zero now. “The benefits of setting targets and a net zero roadmap include an increased capacity to attract investment, satisfying shareholder and community concerns, while avoiding regulatory exposure and penalties.
“Companies should not wait to act on a decarbonisation plan, the tools and technology exist today to improve efficiency and cut emissions. This can drive energy costs lower, while making a real contribution to lessening climate change and saving our planet,” she said.
Image credit: iStock.com/Gang Zhou
Global Food Production Limited by Lack of Pollinators Is ‘Cause for Concern and Optimism,’ Researchers Say
An international research team led by Rutgers University has analyzed the crop yields of more than 1,500 agricultural lands on six continents, and found that a lack of pollinators is limiting the global production of important, nutrient-dense foods like fruits, nuts, vegetables and legumes. The researchers found that one- to two-thirds of farms in many […]
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Monterey, California Beach Closed to Protect Hundreds of Sea Lions
Local officials have closed the area around Monterey, California’s San Carlos Beach to people following the takeover of hundreds of sea lions. Caution tape was placed along the beach, but crowds continued to gather and take photos of the sea lions resting and frolicking, reported Reuters. The social and playful marine mammals frequently gather on […]
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