Jakarta. Environmental, social, and governance (ESG) principles have become a pivotal element in a business. These principles also come as the business’ response to global demands in assessing business performance on a wide range of sustainability issues.

According to research firm Morgan Stanley Capital International (MSCI), ESG ratings aim to measure the company’s resilience to financially relevant risks. According to Fidelity International, there is a positive relationship between ESG and corporate financial performance. Studies have shown that companies with solid ESG performance do better in the long term. Companies that strongly abide by the environmental principle tend to be more efficient in managing their resources and have lower production costs, thus bringing better financial performance. The same goes for those who have the social principle in place.

On Oct. 30, MSCI increased mining giant Merdeka Copper Gold or MDKA’s ESG rating from BBB to A. This makes MDKA a metal mineral mining company with the highest rating nationally.

Apart from the rating increase, MDKA also received the "Gold Rank'' award from the National Center for Corporate Reporting (NCCR) at the 2023 Asia Sustainability Reporting Rating (ASSRAT). This award recognizes MDKA's performance disclosure, commitment and sustainability strategy. which includes six pillars, namely: environmental maintenance, ensuring everyone‘s safety, worker empowerment, community development and empowerment, respecting human rights and implementing good corporate governance.

“We are proud that our ESG performance has received the highest rating from global ESG assessors like MSCI,” Merdeka Copper Gold president director Albert Saputro was quoted as saying in a recent press statement.

“Our 2022 sustainability report also got the “gold rank”.This is set to motivate us into making transparent, high-quality sustainability reports,” Albert said.

MDKA has vowed to reduce 29 percent of its greenhouse gas emissions by 2030. The company is planning to reach net zero emissions by 2050. MDKA has also increased its B30 biodiesel usage for operational vehicles and mining heavy equipment. The power supply of the Tujuh Bukit gold mine, which MDKA’s subsidiary Bumi Suksesindo manages, has been coming from PLN’s renewable-powered power stations since 2022.

MDKA also pledged to conserve the water in its operation sites, while also keeping an eye on the quality. It is also taking into account global environmental risks, as well as the community in the vicinity of its operations.

"MDKA implements a water management strategy that focuses on three main points. First, reducing the extraction of water from nature, especially groundwater and surface water," Albert said.

MDKA also carries out waste management throughout the MDKA Group's mining operations to prevent pollution and prevent negative impact on communities around the operational area.

In 2022, the company recycled all of its non-hazardous and toxic waste, from used cardboard, food waste, wood waste, cooking oil and used tires, except for food packaging waste.

Of the total 8.9 tons, 8.3 tons of food packaging waste was recycled. The remaining 0.6 tons which could not be utilized went to landfills.

MDKA's next initiative is related to land management, namely managing and maintaining biodiversity in operational areas through reclamation, rehabilitation and protection of flora and fauna. MDKA has also gotten forest area use approval from the Environment Ministry.

“We only open land if it is really necessary for mining operations. So this leaves lots of lands that can serve as a habitat for floras and faunas, that we need to take care of and monitor regularly by involving independent bodies,” Albert said.

In the social aspect, Merdeka is committed to ensuring the safety and health of workers and communities around the company's operations, as well as ensuring that employees receive fair compensation and have their rights protected. Merdeka is committed to upholding human rights and supporting the improvement of community welfare through its empowerment program. The company also said it was upholding good corporate governance (GCG) principles. Merdeka also promises to make sure that all of its policies and activities support its efforts to be the leading mining company in Indonesia.