In Zimbabwe, mining is a significant economic sector but has adverse environmental impacts.
This article assesses environmental responsibility practiced by gold mining companies differentiated by ownership structure and assesses the ownership system that leads in environmental, social and governance practices.
The adverse environmental impacts inherent in gold mining need assessments to gauge the integrity of the environmental stewardship using the structure–conduct–performance paradigm as an assessment framework.
The mode of assessment is to establish, through the structure–conduct–performance paradigm, whether these governance systems affect the companies’ environmental performance, and if so, to what extent. The article uses a multiple case study design with a population of 35 large-scale gold mining companies that are members of both the Chamber of Mines of Zimbabwe and the Mine Industry Pension Fund, and 23 participated. The article uses a mixed methods approach using a questionnaire and structured interviews to collect quantitative and qualitative data, respectively. The study employed Kruskal–Wallis rank test, to rank the differences in governance structures’ performances.
The results show that gold mining companies in Zimbabwe exercise environmental stewardship. Mining companies listed on foreign exchanges and local private limited companies exhibit more responsibility than other ownership types.
Government policy to compel soil restoration and overburden management can improve these practices.
This study contributes to the burgeoning literature on corporate environmental responsibility by illuminating the possible role played by ownership structure in environmental responsibility.
Increased environmental catastrophes worldwide necessitate increased environmental responsibility. In Zimbabwe, several artisanal miners lost their lives in a flooding accident at the disused Cricket and Baxter Mines (Nyamukondiwa & Chidhakwa
Environmental responsibility includes mining companies’ voluntary efforts to integrate environmental considerations into their mining operations and activities (Helfaya & Moussa
Over the last decade, there has been a shift towards a broader view of corporate social responsibility to include Environmental, Social and Governance (ESG) (Gillan, Koch & Starks
Given the importance of the gold mining sector in Zimbabwe and the environmental challenges associated with this sector, this article aims to assess the ESG practices implemented by large-scale gold mining companies. This article also determines which among the selected ownership types has the best ESG practices. The first type of ownership system is local private limited companies. The second type is companies listed on the Zimbabwe Stock Exchange, the third type is companies listed on foreign stock exchanges and the fourth type is the government-owned companies. The fifth type is multinational companies with parent companies abroad but not listed on any stock exchange.
The solution to the mode of assessment is to establish through the structure–conduct–performance paradigm, whether these ownership systems affect the companies’ environmental performance and, if so, to what extent. Specifically, this article examines how different companies under different ownership systems use resources such as water, energy and raw materials and ensure environmental quality (EQ) through the mine’s waste dump (WD), soil restoration practices and environmental accident (EA) prevention. This article also investigates the extent to which the mining companies maintain environmental integrity in reducing contaminants, reducing mine WD through the reclamation of land and soil restoration and preventing EAs.
The article uses structure–conduct–performance paradigm that assumes a causal relationship between market structure, conduct and performance (Lelissa & Kuhil
Although the structure–conduct–performance paradigm has been criticised for ignoring discretionary conduct of managers, based on the assumption that they are passive in fostering relationships between the industry structure, the structure–conduct–performance framework has been used successfully in this study.
The successful use of the structure–conduct–performance framework emanates from the fact that the article innovates and uses three major classifications of organisational ownership systems (shareholder, stakeholder and legitimacy) as the structures which are likely to define the nature of ESG practices. These classifications determine how the selected ownership systems handle ESG practices in the gold mining sector. The company’s conduct (i.e. behaviour) is ESG practices in resource usage and mine waste management. The performance refers to how the company implements its ESG systems, whether it is shareholder, valuing shareholders only, stakeholder, considering other stakeholders or legitimacy, taking into account broader stakeholders with an international flair in its actions.
In applying the shareholder approach, shareholders are the most important participants, because they provide the means of production (O’Connell & Ward
Probably in criticism of the preceding approach, Freeman (2020) advanced the stakeholder approach to corporate governance. This approach emphasises that business organisations are not only accountable to their shareholders, but they should also consider the contrasting interests of all other stakeholders that can affect or are affected by the achievement of business objectives (Chaffee
The societal approach to ESG suggests that because companies earn their licence to operate from society, they are likely to constructively serve society’s needs (Cesar & Jhony
According to Meesters et al. (
Hemingway (
The companies listed on the stock exchange conform to the stakeholder structure, as they have other stakeholders to consider (Matthews et al.
Chih-Pei and Chang (
The study used the case study design, employing multiple cases in Zimbabwe’s large-scale gold mining sector. The study used a mixed methods methodology, making use of both quantitative and qualitative philosophical underpinnings. Scholars classify research paradigms into two distinct categories. The first category is the positivist or the quantitative paradigm, which uses deductive reasoning. The positivist approach is concerned with uncovering truth and presenting it empirically (Rahi
The study had three key research components: In-depth interviews with representatives of eight known stakeholder organisations working with the gold mining sector were selected based on direct involvement with issues about the study objectives. A population-based survey was conducted to gather data on the knowledge, attitudes and practices of the selected gold mining companies’ employees. Additional in-depth interviews were held with other stakeholders and key informants, depending on the emergent issues that required further explanation. The difference between the first in-depth interviews and the additional interviews are with external stakeholders from organisations that work closely with the mining industry. Furthermore, in-depth interviews were required to seek further explanation and establish possible reasons for the emergent issues. Repeat meetings with representatives or additional key informants were identified and interviewed.
The target population was gold mines which were members of both the Chamber of Mines in Zimbabwe and the Mine Industry Pension Fund at the time of the study. Five ownership systems were selected. The first ownership system is local private limited companies, where shareholders can be between 1 and 50, as directed by the
For questionnaire respondents, current mine employees (at the time of the study), whether permanently or temporarily employed, could participate.
Participants were to be excluded if they indicated that they were not willing to participate or refused to sign an informed consent form.
No persons under the age of 18 years participated in the study.
At the time of the research, 35 large-scale gold mining companies were members of both the Chamber of Mines in Zimbabwe and the Mines Industry Pension Fund. From these 35 mining companies, 23 agreed to take part, representing 66% of the target population. A response rate of 66% is acceptable, given that Hendra & Hill (
While reporting on nonfinancial information has become a trend for large companies (Chen, Yu and Hu
The structure–conduct–performance paradigm has been widely used in industrial organisation theory (Khan and Hanif
The study used both subjective measures (employees’ perceptions) and objective measures (accounting data) because of the mining industry’s nature, where there is a lot of security and secrecy surrounding objective accounting data. The main weaknesses of subjective measures are biases inherent in perceptions (Singh, Darwish & Potočnik
The study combined the two types of measures to mitigate the weaknesses of objective and subjective measures. Qualitative information was solicited from other stakeholders, such as workers’ union leaders, community leaders, nongovernmental organisations working with the different mining industry and representatives from relevant statutory bodies and other institutions that work closely with the gold mining sector. Quantitative data were collected using a questionnaire. The objective data provided in the questionnaires came from nonassured management reports and company accounting records. Computer-assisted personal interview (CAPI) was used where possible to capture and enter data during the interview and survey processes. This digital data collection technique uses CSEntry to collect data for surveys created using Census and Survey Processing System (CSPro) on Android tablets. The software assists in maximising data processing reliability by restricting data entry errors. The data were then imported into Stata for analysis. The first round of in-depth interviews was done face to face, and the questionnaires were administered personally and mostly electronically. Once quantitative and qualitative data were collected, preliminary findings for each of the objectives were analysed and these became the basis of the follow-up interviews. Most of these follow-up interviews were done through phone calls.
The companies’ environmental responsibility measures are composed of two broad categories, namely RU and EQ. Resource use sought the employees’ perceptions of companies’ efficiency in water, energy and raw material usage. Environmental quality focusing on the employees’ views on practices used to reduce contaminants, WD management, EA prevention and soil restoration practices. On water usage, a Likert scale measured perceptions on whether the company makes effort to provide all water source needs, recycles water for reuse in operations, invests in technologies that use less water in operations, makes effort to provide clean water used by the community and invests in water purification of water used for consumption.
For energy use, perceptions sought were whether the company invests in technologies that use less energy for operations, adopts new ways of using renewable energy, promotes renewable energy in the form of solar power, promotes renewable energy in the form of biogas for domestic fuel and provides electricity to employees at a subsidy. The usage of raw materials sought to establish the extent to which the companies use gold-searching technology to ensure that only good quality stone is brought to the mill, that is, whether the company has practices to reduce ore poor in gold content while rewarding rewards-rich gold deposits and use of efficient gold extraction technologies. The questions asked with respect to EQ were what the company does for reduction of the contaminants, namely whether there are concrete measurable targets to judge liquid waste and methods for monitoring waste management, including whether water from mine processes is treated before releasing it into streams, the presence of a third-party audit of tailings and using recycled water to minimise contamination. Waste dumps, for this section, mainly refer to the overburden that is removed to get to the ore. The section on waste reduction sought to establish the extent to which companies consider potential environmental impacts when dumping or whether there is a functioning waste dump management program in place and some waste recycling program; it also sought to establish whether the employees agreed that the public is a stakeholder in the company’s existence, whether there is environmental integrity in the mine’s agenda and if it is possible to be economically viable while being environmentally responsible. The section, soil restoration practices, sought to establish employee perceptions on management’s attitudes towards restoring soil and whether the practice of soil restoration was an annual process. The section also sought to establish whether employees were aware of existence of policy guiding soil restoration on decommissioning and whether they recognise the causal link between environmental performance and financial. Environmental accidents are a present risk in mining. This section seeks to establish the extent to which companies consider potential environmental impacts when adopting new technologies, the frequency of EAs and how vigilant the company is in reducing accidents.
The questionnaire used a five-point Likert scale that ranged from strongly disagree to strongly agree: 1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree and 5 = strongly agree.
A mean score with a cut-off point of 0.5 was then computed using the following formula: the formula sums up all the perceptions indicated for a particular indicator. This is done to enable ranking of the perceived performances:
Where ‘
The objective measures made use of economic and accounting data. The algorithms and formulas used to calculate the mining sector’s performance on EM indices were adapted from Vintró and Comanjuncosa (
Energy consumption (E):
Primary material consumed (M):
An index for RU would be determined using the following formula: The formula combines the objective measures and subjective measures to develop a balanced evaluation of the ESG practices.
RU = α1W + β1E +γ1M, where the α1, β1 and γ1 are values based on subjective assessments, and W, E and M are objective measures for water, energy and raw materials, respectively, obtained using the formulas as shown above. The index reflects the companies’ level of corporate environmental responsibility effort towards RU efficiency. The next aspect is the EQ; below are the formulas:
Reduction in contaminants (C):
Reduction in WD:
Percentage of restored soil (S):
Reduction of EAs:
The index for EQ would be determined using the following formula: EQ = α2C + β2 WD + γ2S + Ω2EA, where α2, β2, γ2 and Ω2 are calculated values based on subjective measures. The objective measures of C, WD, S and EA are reduction in contaminants effort, WD management, soil restoration and prevention of EAs, respectively. The EM index would be the sum of RU and EQ indices. This index reflects the overall ESG effort and stewardship of the environment.
The Zimbabwe Ministry of Mines and Mineral Development approved the research through a clearance letter, which authorised the researcher to contact all government departments and quasi-government departments. An institutional review board at a large north-western public university in South Africa approved the research. The first author did all interviews and then transcribed them with the help of a research assistant sworn to confidentiality. All the respondents for both the quantitative and qualitative data collection process signed an informed consent form, kept by the first author. Respondents were informed that participation was anonymous, and results were anonymous. Respondents were informed of their right to withdraw from the research process without providing any reason. They could request that information they provided be discarded and excluded from the analysis.
To determine the internal consistency (the extent to which the items in a scale correlate), Cronbach’s alpha coefficient was used. Cronbach’s alpha coefficient demonstrates internal consistency based on average correlation. Internal consistency in measurement refers to whether all aspects of the measurement measure the same thing or concept (Sharma
Resource use assessed how different ownership systems efficiently used water, energy and raw materials. Perceptions of the employees are shown using frequencies expressed as a percentage.
As shown in
‘[
Employee perceptions on efficiency in water use (W), energy usage (E) and raw material usage (M).
Ownership type | % of respondents saying |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
High W |
Medium W |
Low W |
High E |
Medium E |
Low E |
High M |
Medium M |
Low M |
||||||||||
% | % | % | % | % | % | % | % | % | ||||||||||
Local private limited company | 13 | 38.24 | 8 | 23.53 | 13 | 38.24 | 16 | 47.06 | 8 | 23.53 | 10 | 29.41 | 17 | 50.00 | 7 | 20.59 | 10 | 29.41 |
Listed in the Zimbabwe stock exchange | 28 | 82.35 | 6 | 17.65 | 0 | 0 | 22 | 64.71 | 12 | 35.29 | 0 | 0 | 31 | 91.18 | 3 | 8.82 | 0 | 0 |
Listed in foreign stock exchange | 37 | 80.43 | 7 | 15.22 | 2 | 4.35 | 37 | 80.43 | 7 | 15.22 | 2 | 4.35 | 39 | 84.78 | 7 | 15.22 | 0 | 0 |
Government-owned companies | 20 | 66.67 | 10 | 33.33 | 0 | 0 | 21 | 70.00 | 9 | 30 | 0 | 0 | 15 | 50.00 | 4 | 13.33 | 11 | 36.67 |
Multinationals not listed | 14 | 43.75 | 5 | 15.63 | 13 | 40.63 | 20 | 62.50 | 4 | 12.50 | 8 | 25 | 19 | 59.38 | 7 | 21.88 | 6 | 18.75 |
Total | 112 | 63.64 | 36 | 20.45 | 28 | 15.91 | 116 | 65.91 | 40 | 22.73 | 20 | 11.36 | 121 | 68.75 | 28 | 15.91 | 27 | 15.34 |
Pearson chi2(8) = 50.0799, Pr = 0.0001 | Pearson chi2(8) = 33.3779, Pr =0.0001 | Pearson chi2(8) = 140.0369, Pr = 0.001 |
W, water use; E, energy usage; M, raw material usage.
An official with the EM Agency said:
‘[
As shown in
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This forces companies such as the foreign listed companies, which are well resourced, to embark on technologies that are energy efficient. An executive with one of the companies listed on the foreign exchanges said, ‘We have raised over 12 million U.S. dollars for putting up a solar power plant to mitigate against the effects of downtime due to power outages’. The alternative for grid electricity is diesel-powered generators, but these generators have high carbon emission levels harmful to the environment.
As shown in
‘[
The companies’ performance, based on objective measures, reflects what the mining companies record, based on estimates obtained from the company data. There is always a need among professionals to apply an enquiring mind (Agrawal et al.
Objective measures in resource use.
Ownership Structure | Water usage | Energy usage | Raw materials usage | α1W | β1E | γ1M | Resource use |
---|---|---|---|---|---|---|---|
Local private limited | 0.2244 |
0.0760 |
0.1633 |
4.2494 |
1.2464 |
2.7753 |
8.2710 |
Listed in the Zimbabwe stock exchange | 0.0427 |
0.0700 |
0.1147 |
0.8223 |
1.2623 |
2.1706 |
4.2552 |
Listed in the foreign stock exchange | 0.1464 |
0.1018 |
0.1250 |
2.9426 |
1.7944 |
2.6307 |
7.3678 |
Government-owned | 0.0958 |
0.0630 |
0.1156 |
1.8167 |
1.1431 |
2.4179 |
4.6743 |
Multinational companies not listed | 0.0792 |
0.0488 |
0.1434 |
1.0368 |
0.7774 |
1.7144 |
4.2321 |
Chi-square | 44.7430 | 14.7460 | 41.3890 | 38.5780 | 26.8390 | 26.9260 | 18.3450 |
0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0011 |
Figures in parenthesis = standard deviation.
W, water use; E, energy usage; M, raw material usage.
As shown in
‘[
The indices were generated by combining subjective measures and objective measures. The formula RU = α1W + β1E +γ1M sums up the assessment. As shown in
Environmental quality evaluated management of contaminants and WD reduction, soil reclamation practices and EA prevention.
As shown in
Employees’ perceptions of the level of effort to reduce contaminants, reduce waste dumps, restore soil and prevent environmental accidents.
Ownership structure | % of respondents saying |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
High C |
Medium C |
Low C |
High WD |
Medium WD |
Low WD |
High S |
Medium S |
Low S |
High EA |
Medium EA |
Low EA |
|||||||||||||
% | % | % | % | % | % | % | % | % | % | % | % | |||||||||||||
Local private limited company | 23 | 67.65 | 0 | 0.00 | 11 | 32.35 | 23 | 67.65 | 2 | 5.88 | 9 | 26.47 | 19 | 55.88 | 8 | 23.53 | 7 | 20.59 | 16 | 47.06 | 17 | 50.00 | 1 | 2.94 |
Listed in the Zimbabwe stock exchange | 28 | 82.35 | 6 | 17.65 | 0 | 0.00 | 28 | 82.35 | 6 | 17.65 | 0 | 0.00 | 25 | 73.53 | 9 | 26.47 | 0 | 0.00 | 26 | 76.47 | 8 | 23.53 | 0 | 0.00 |
Listed in foreign stock exchange | 36 | 78.26 | 5 | 10.87 | 5 | 10.87 | 33 | 71.74 | 9 | 19.57 | 4 | 8.70 | 30 | 65.22 | 13 | 28.26 | 3 | 6.52 | 28 | 60.87 | 9 | 19.57 | 9 | 19.57 |
Government-owned companies | 12 | 40.00 | 5 | 16.67 | 13 | 43.33 | 15 | 50.00 | 6 | 20.00 | 9 | 30.00 | 3 | 10.00 | 12 | 40.00 | 15 | 50.00 | 15 | 50.00 | 11 | 36.67 | 4 | 13.33 |
Multinationals not listed | 26 | 81.25 | 1 | 3.13 | 5 | 15.63 | 19 | 59.38 | 2 | 6.25 | 11 | 34.38 | 20 | 62.50 | 9 | 28.13 | 3 | 9.38 | 20 | 62.50 | 12 | 37.50 | 0 | 0.00 |
Total | 125 | 71.02 | 17 | 9.66 | 34 | 19.32 | 118 | 67.05 | 25 | 14.2 | 33 | 18.75 | 97 | 55.11 | 51 | 28.98 | 28 | 15.91 | 105 | 59.66 | 57 | 32.39 | 14 | 7.95 |
Pearson chi2(8) = 34.5248, |
Pearson chi2(8) = 24.0567, Pr = 0.0002 | Pearson chi2(8) = 47.2384, Pr = 0.0000 | Pearson chi2(8) = 25.0938, Pr = 0.0001 |
Figures in parenthesis = standard deviation.
C, contaminants; WD, waste dumps; S, soil; EA, environmental accidents.
Waste dumps for this section mainly refer to the overburden removed to get to the ore. In
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An officer with the EM agency confirmed that EAs have not occurred recently at any of the mines in the target population.
Objective measures of the companies’ performance in fair fund administration.
Ownership type | Reduction in contaminants | Reduction in waste dumps | Reduction in environmental accidents | Percentage of restored soil | α2C | β2WD | γ2S | Ω2EA | Environmental quality |
---|---|---|---|---|---|---|---|---|---|
Local private limited | 0.1641 |
0.1296 |
1 |
1 |
2.9810 |
2.3832 |
17.4706 |
18.0882 |
40.9230 |
Listed in the Zimbabwe stock exchange | 0.1391 |
0.1136 |
1 |
1 |
2.7586 |
2.1857 |
19.0294 |
18.9705 |
42.9423 |
Listed in the foreign stock exchange | 0.2767 |
0.2074 |
1 |
1 |
5.6362 |
3.9197 |
18.0435 |
17.0652 |
44.6547 |
Government-owned | 0.0189 |
0.1884 |
1 |
1 |
0.6351 |
2.6447 |
12.4333 |
16.7666 |
32.4698 |
Multinational companies not listed | 0.0969 |
0.2523 |
1 |
1 |
1.6554 |
4.2073 |
17.4063 |
18.9686 |
42.2378 |
Chi-square | 106.0860 | 61.7160 | 0.0000 | 0.0000 | 90.22 | 63.38 | 40.05 | 8.64 | 46.75 |
0.0001 | 0.0001 | 1 | 1 | 0.0001 | 0.0001 | 0.0001 | 0.0709 | 0.0001 |
Figures in parentheses = standard deviation.
C, contaminants; WD, waste dumps; S, soil; EA, environmental accidents.
As shown in
‘[
At the time of the study, all companies in the research had recorded no EAs. An informant with the EM agency said:
‘[
Another informant who is an executive with one of the companies listed on the Zimbabwe Stock Exchange said:
‘[
The formula below sums up the environmental quality index:
In
The overall stewardship of the environment by the mining companies.
Ownership type | Resource use | Environmental quality | Environmental management |
---|---|---|---|
Local private limited company | 8.2710 |
40.9230 |
49.1940 |
Listed on Zimbabwe stock exchange | 4.2552 |
42.9423 |
47.1995 |
Listed on foreign stock exchange | 7.3678 |
44.6547 |
52.0225 |
Government-owned companies | 4.6743 |
32.4698 |
37.1442 |
Multinational companies unlisted | 4.2321 |
42.2378 |
46.4699 |
Chi-square | 18.345 | 46.747 | 42.646 |
0.0011 | 0.0001 | 0.0001 |
Figures in parentheses = standard deviation.
The EM index is the overall assessment of the mining companies’ corporate environmental responsibility where:
Environmental management would be the sum of RU and EQ, EM = RU + EQ.
The results in
The article set out to assess the ESG practices by large-scale gold mining companies. The article also determined which among the selected ownership types has the best ESG practices put in place by the large-scale gold mining companies. The article examined how different companies under different ownership systems use resources such as water, energy and raw materials and ensure EQ through the mine WD, soil restoration practices and EA prevention. The article also investigated the extent to which the mining companies maintain environmental integrity in how they reduce contaminants, reduce mine WD through the reclamation of land and soil restoration and prevent EAs.
The results show that gold mining companies in Zimbabwe exercise good ESG practices, given the regulatory environment. This is in tandem with Giannarakis, Andronikidis and Sariannidis (
The literature predicted that companies listed on foreign stock exchanges would have higher performance standards. Ezhilarasi and Kabra (
The local private limited mining companies perform well and have good corporate citizenship and are the second-highest performers. This is contrary to the literature predictions that placed them under the shareholder model, where the focus is on profit and shareholders. Regarding spending money on corporate environmental issues, Ullah, Muttakin and Khan (
Companies listed on the Zimbabwe Stock Exchange, predicted to be following a stakeholder perspective, lived up to the prediction. According to Nikolova and Arsić (
The population scope, which was that of membership in both the Chamber of Mines of Zimbabwe and the Mine Industry Pension Fund, was restrictive. Other large-scale mining companies in Zimbabwe are not members of these two organisations. This study contributes to the burgeoning literature on corporate ESG by illuminating the possible role played by ownership structure in ESG practices. Future research focusing on the influence of the type of ownership that includes the origin of the multinational companies can be undertaken to investigate whether the parent country or country of listing has significance. Another important aspect for investigation would be to assess the effects of the board structure and managerial attitudes on ESG practices. This article is important to gold mining companies in Zimbabwe because they can begin to improve their EM, performance and indices as a sector. By ranking the mining companies, subtle competition is spurred, and the mining companies will strive to better their performance. More indicators than RU and EQ can be included for the betterment of ESG in the gold mining sector in Zimbabwe. Moreover, policies on soil restoration and reduction in dumps of overburden, which are practices reserved for decommissioning, can be revised for better stewardship of the environment.
The authors would like to thank Antonette Bisshoff for language and technical precision editing.
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
L.N. is a PhD student at the North-West University Business School Potchefstroom campus. R.A.L. is the study supervisor and A.S. is the co-supervisor.
Ethical clearance to conduct this study was obtained from the North-West University Economics and Management Sciences Research Ethics Committee (EMS-REC) (ref. no. NWU-01367-19-A4).
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
The data that support the findings of this study are available on request from the corresponding author.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.