Mining Value Chains

The pilot aims to develop an EO-based framework to screen and assess water-related impacts associated with mining activities, with a focus on transition-critical minerals (those which are essential for transitioning to a low-carbon, net-zero economy). It concentrates on direct mining operations, where impacts are most material, whilst also exploring downstream effects on hydrologically connected freshwater systems.

The approach focuses on detecting changes in water quality linked to mining-related disturbances, particularly sediment mobilisation and runoff (the water that does not soak into the ground). Using satellite-derived optical signals, the pilot identifies deviations from expected seasonal conditions rather than attempting to retrieve absolute pollutant concentrations. This anomaly-based methodology enables scalable and consistent monitoring, particularly in data-scarce environments where in situ measurements are limited.

A key output of the pilot is the Water Quality Risk Index, a composite, spatially explicit indicator that integrates the extent, persistence, and downstream exposure of water quality anomalies within a watershed. This enables structured screening and prioritisation of mining assets based on their potential water-related impacts.

The pilot is intentionally modular, allowing future expansion to include additional dimensions such as water availability and ecosystem dependencies, whilst maintaining a clear focus during this phase on water quality impact screening.

This pilot is aligned with a rapidly evolving landscape of regulatory and voluntary frameworks that recognise water quality as a material risk in the mining sector and increasingly require spatially explicit data to support decision-making.

At the strategic level, the Taskforce on Nature-related Financial Disclosures (TNFD) identifies mining as a high-impact sector for water pollution and highlights freshwater ecosystem condition as a key dimension of nature-related risk. It emphasises the need to assess risks in priority locations, such as areas of ecosystem degradation or high water stress.

Tools such as ENCORE reinforce this perspective by showing that mining both exerts pressure on freshwater systems and depends on ecosystem services like water purification, making water quality relevant from both an impact and dependency standpoint.

Regulatory frameworks—including the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR)—further increase demand for asset-level, geospatial data, particularly for indicators such as emissions to water and impacts on ecosystems.

At the corporate level, established standards such as CDP Water, GRI 303, SASB Metals & Mining, and ICMM Water Stewardship require companies to assess, manage, and disclose water quality risks, including pollution incidents, discharge quality, and basin-level impacts.

In this context, the pilot contributes by providing EO–based, spatially explicit indicators of water quality change, supporting:

• Screening of mining assets for water-related risks
• Identification of potential pollution hotspots at watershed scale
• TNFD-aligned risk assessment and prioritisation
• Potential inputs for CSRD and SFDR disclosures

Overall, the pilot helps bridge the gap between high-level frameworks and the location-specific evidence needed for effective financial decision-making.

User requirements were gathered through targeted engagement with financial institutions and stakeholders active in the mining sector.

Stakeholder engagement highlighted the need for:

• Global coverage while also retaining high spatial resolution, enabling asset-level analysis
• Consistent and comparable metrics across geographies and commodities
• Scalable approaches that do not rely on in situ data availability
• Integration into risk screening and portfolio assessment workflows

While many users have experimented with EO data, its application remains ad hoc. There is strong demand for structured, decision-ready indicators that can be systematically applied across portfolios.

The pilot addresses these needs by providing a standardised, anomaly-based framework that is globally applicable, hydrologically coherent, and designed for integration into financial decision-making contexts.

The pilot supports financial institutions in identifying, assessing, and managing nature-related risks in line with frameworks such as TNFD, CSRD, and SFDR.

The Water Quality Risk Index provides a screening-level metric that enables:

• Asset-level risk identification, highlighting mining sites with persistent and spatially coherent water quality anomalies
• Portfolio-level prioritisation, allowing institutions to focus due diligence efforts on higher-risk exposures
• Monitoring over time, supporting ongoing assessment of environmental performance

By leveraging hydrologically structured, satellite-derived data, the approach provides geographically explicit evidence aligned with TNFD’s focus on priority locations, such as areas of high water-related risk.

The outputs also support:

• TNFD-aligned disclosures, by linking water quality changes to ecosystem condition
• CSRD / ESRS E4 reporting, by providing spatial indicators of biodiversity-related pressures
• SFDR metrics, including emissions to water and pollution-related indicators

Importantly, the outputs are designed for screening and prioritisation rather than regulatory compliance, enabling financial institutions to bridge the gap between sector-level risk assessments and location-specific decision-making.