The latest research from the Responsible Mining Foundation, based on the RMI Report 2020, reveals that large-scale mining companies are much less likely to track and report on their management of water quality compared to water quantity.
Mining operations can have severe and long-lasting impacts on water quality, and the quality of local water resources determines their usability and safety for agriculture, other industries, local communities and the environment downstream of mine sites’ discharge points. As such, water quality is an intergenerational issue of direct relevance to the socio-economic and environmental health of mining areas.
This Research Insight highlights limited industry expectations on water quality reporting and a mismatch between how water quality is treated in materiality analyses and in company reporting. But leading practices are already existing and both companies and governments have a role to play in supporting the achievement of the water-related UN Sustainable Development Goals.
Other stakeholders sharing the same water resources as mining operations rely heavily on the quality, as well as the quantity, of these resources and they need useful information on water pollution levels. And mining investors, financiers and customers want to know how well companies are preventing water pollution and managing asset-level water quality-related risks.
Yet it seems that while companies’ operational concerns about their water supply promote more regular reporting of water consumption levels, companies have largely neglected to publicly disclose locally-relevant data on water quality. Research shows that mining companies generally disclose water quality monitoring data only when they are required to do so by producing country regulations.
According to Peter Kindt, Head of Metals, Mining & Fertilisers EMEA at ING Bank, understanding, measuring and analysing water-related issues in the mining industry is a complex and often undervalued task while of great importance to banks and other investors. Not just from an impact investment perspective, but also to manage risks: obtaining and maintaining a local license to operate and understanding longer term climate change related risks.
The discrepancy in the availability of data on water quality vs water quantity is very evident in the results of the RMI Report 2020, which assesses 38 large-scale mining companies’ policies and practices on a wide range of economic, environmental, social and governance (EESG) issues. The companies score an average of only 13% on tracking and disclosing water quality downstream of their operations – compared to an average score of 60% on tracking and disclosing their water consumption levels.
Notably, only a couple of the companies assessed in the RMI Report 2020 include in their sustainability reports any indication of water quality impacts (and these are limited to brief mentions of major water pollution incidents) whereas companies routinely report statistics on their water consumption.
And the RMI Report 2020 results confirm that regulatory frameworks strongly impact companies’ propensity to track and disclose water quality data. Overall, mine sites in countries such as India and Australia outperform others on this issue as they are required by the governmental authorities to publicly report their water quality monitoring results. It is important to note that such regulations tend to require companies to report on water quality at specified locations downstream of discharge points – rather than simply the quality of the water being discharged.