Bettercoal: Improving Performance in the Coal Supply Chain

The Challenge

In the next 25 to 50 years, despite efforts to shift to lower-carbon energy sources, increasing demand from large emerging economies means that coal will continue to be critical to meet energy needs. And, increasingly, future production is likely to be based in countries such as Mongolia, Mozambique, and parts of Indonesia that, to date, have had modest coal mining operations.

In spite of this, there is currently no agreed-upon global standard for coal mining; performance varies widely across the world; and there are significant ethical, social, and environmental risks and impacts associated with coal mining.

To fill this gap, several major energy utilities—DONG Energy, EDF, Enel, E.ON, GDF Suez, RWE, and Vattenfall—worked with BSR as the lead facilitator to form Bettercoal, the first global, multi-company initiative aimed at improving conditions at the mine level. Bettercoal will seek to fulfill its mission by conducting independent mine assessments, facilitating industry best practice sharing, and offering support to develop resources and capabilities at the mine level.

Our Strategy

Since the beginning of 2011, BSR has supported the founding members with both group facilitation and content expertise on a range of issues, including ethical, social, and environmental risks and impacts in mining.

Using our deep experience building collaborative initiatives, we have engaged civil society and companies in the coal supply chain to help create a coal-mining code for social, environmental, and ethical performance; draft the articles of association; incorporate the entity; define its operating principles; manage antitrust issues; and hire an executive director. BSR also worked with third-party service providers to develop the infrastructure and tools to support Bettercoal.

Our Impact

In the first year, BSR has successfully assisted in the launch of Bettercoal, and we will continue to support the organization as the Bettercoal Code and assessment tools proceed through a multiphase, public consultation process that will reach individuals and community-based organizations in key coal-producing countries. (Information about this will be available at www.bettercoal.org.)

In the future, Bettercoal will focus on increasing the uptake of the initiative by suppliers and stakeholders.

Lessons Learned

Through the development of Bettercoal, we learned two important lessons about collaborating with several independent companies to establish a new entity:

1. Involving relevant staff from each of the founding companies in different activities was a highly effective way to imbed the work in the organizations and ensure that the project had necessary resources. For instance, the project communications departments were involved in developing the communications strategy, sustainability experts helped develop the code, and compliance officers established the operating model.
2. To ensure trust among companies—a fundamental part of maintaining both momentum and our schedule—we needed to ensure that we developed and had consensus on our mission from the outset.