Affected communities impacts, risks, and opportunities (SBM-3)
Material impacts, risks and opportunities and their interaction with strategy and business model
As a global company with customers active in mining and infrastructure sectors, as well as sourcing of metals and minerals in our upstream value chain, we acknowledge the possible risk that our operations, products, services, and business relationships may impact local communities. In our double materiality assessment, we considered all communities that may be materially impacted by our operations or value chain activities, including communities of indigenous peoples.
The identified material impacts concern local communities living near our customers’ sites or those affected by their mining operations, especially in high-risk countries with elevated human rights risks. Risk markets are defined using environmental, human rights and corruption criteria from a third-party risk analytics firm. Examples of risks covered are land, property and housing rights, and indigenous peoples' rights which provides insight about impacts on affected communities in different locations.
| Affected communities | Location in value chain | Time horizon | |||||
| Up- stream | Own operations | Down- stream | Short- term | Medium- term | Long- term | ||
| In high-risk areas there is a risk that human rights are not respected and that local communities are negatively impacted by customers’ activities | Potential negative impact | o | o | o | o | ||
| If communities in high-risk areas are negatively impacted by customers’ activities, it can harm Epiroc's reputation | Risk | o | o | o | o | ||
We have customers in around 150 countries, and they are required to perform their operations, conduct land acquisitions, manage security and handle environmental impacts in a manner that respects human rights and the well-being of local communities, including indigenous peoples that require particular consideration as they may be disproportionately vulnerable due to their close ties to land and natural resources. Potential challenges and negative impacts include community displacement, access to clean water and natural resources, and health issues from chronic pollution. These may arise from systemic problems or isolated incidents, such as environmental accidents or a business partner's disproportionate security response to protesters. Our Responsible Sales Assessment process (RSA) inform us if there are affected communities with particular characteristics, contexts or activities that may be at greater risk of harm.
If communities are negatively impacted by mining and infrastructure activities and human rights are not respected, it can affect our business by damaging our reputation, leading to customer loss and stock devaluation. Geographically, these risks are primarily located in conflict-affected areas and high-risk regions with a heightened risk of human rights violations.
Ensuring that our operations and customers adhere to human rights standards is important for maintaining our market position and customer confidence. As Epiroc is one of many suppliers at a mine site our possibilities and means to use leverage is limited. However, doing business ethically is important for us and considerations on actual and potential impacts, including risks in specific geographies, have informed our business practices and the development of our due diligence processes such as the RSA process.