Nature Positive Role of the Mining and Metals Sector

2.1 Double materiality The principle of “double materiality”, a concept at the heart of the EU’s CSRD, defines a company’s impact on the environment and its dependencies on it as highly interdependent (see Figure 6). In other words, the economic activities of businesses have impacts on both the environment and society (known as impact materiality), while concurrently, businesses also encounter risks (and opportunities) arising from their dependencies on the environment and society (known as financial materiality). Double materiality FIGURE 6 Double materiality Traditional materiality Business impacts on nature/ impact materialityDependencies/ financial materiality Examples of financial materiality Pressure on water availability and decline in quality affect company profitability Soil erosion and degradation lead to decreases in agricultural yields for agricultural food companies Dirty beaches and coastal areas cause drop in tourism traffic and revenues – – –Examples of impact materiality Company activities affect water supply and quality Unsustainable agricultural practices lead to decrease in soil quality Irresponsible travel and tourism cause pollution and over-exploitation of natural resources – – –Business dependencies on nature/financial materiality Source: World Economic Forum. Definition of double materiality sourced from: Deloitte. (2023). Double Materiality: 5 challenging key aspects to consider. Like many others, the mining and metals value chain is highly dependent on a number of environmental assets and ecosystem services. For mining operations, this includes:99 –Metal, mineral and energy resources: Provision of metal and mineral resources to mine, alongside a stable supply of energy to operate. Energy is currently sourced from both renewable and non-renewable sources, with an increasing shift towards renewable sources. –Cultivated biological resources: The sector relies on the provision of forest products, including timber for mining operations, and other resources, such as seed for rehabilitation. –Freshwater: Although companies are increasingly reducing overall ground and surface water consumption, improving water circularity and switching to other water sources such as seawater and greywater, especially in water- scarce areas, the sector continues to rely on freshwater as an important resource. Mining operations depend on water for activities such as ore processing and refining, dust suppression, cooling and lubrication of machinery, and slurry transport to tailings dams. Indeed, according to CDP , in 2018 alone, the mining and metals sector suffered over $20 billion in water-related financial impacts,100 such as increased operating costs, reduction or disruption in production capacity and fines or penalties. Nature Positive: Role of the Mining and Metals Sector 21