Mining and resources is one of the most climate-exposed sectors globally. From open-pit operations in water-scarce regions to underground mines facing extreme heat events, the physical and transition risks for this sector are substantial and financially material.
The ISSB's industry-based guidance, derived from SASB standards, provides specific disclosure topics and metrics for the Extractives & Minerals Processing sector. This article covers what mining companies need to know when conducting their ISSB-aligned materiality assessment.
SASB Classification: Extractives & Minerals Processing
The SICS Extractives & Minerals Processing sector includes eight sub-industries, each with tailored disclosure topics:
- Metals & Mining (EM-MM) — gold, copper, lithium, nickel, zinc, rare earths
- Coal Operations (EM-CO) — thermal and metallurgical coal
- Iron & Steel Producers (EM-IS) — integrated steelmakers, iron ore producers
- Construction Materials (EM-CM) — cement, aggregates, concrete
- Oil & Gas — covered separately in our oil and gas guide
The remaining sub-industries (Oil & Gas Midstream, Refining & Marketing, and Services) share the sector but have distinct climate profiles. This article focuses on the mining-specific sub-industries.
Key Disclosure Topics for Mining
GHG Emissions
Mining operations generate significant greenhouse gas emissions across all three scopes:
- Scope 1: diesel combustion in haul trucks and equipment, blasting, on-site processing (smelting, refining), and fugitive emissions from coal operations
- Scope 2: purchased electricity for processing plants, ventilation systems, and conveyors — often the largest controllable cost for underground mines
- Scope 3: downstream processing, transportation of ore and concentrate, and end-use of extracted materials. For iron ore producers, steelmaking emissions (Category 10) can dwarf Scope 1 and 2 combined
The SASB metrics require absolute emissions (tonnes CO2e) and emissions intensity (per tonne of ore processed or metal produced). Mining companies should also disclose their emissions reduction strategy and any internal carbon price used for investment decisions.
Energy Management
Mining is extraordinarily energy-intensive. The key metrics are total energy consumed (in GJ or MWh), the split between grid electricity and on-site generation, and the percentage from renewable sources.
Energy transition is a core financial risk for mining companies. Rising electricity costs, carbon pricing on diesel, and investor expectations around decarbonisation all make energy management a material disclosure topic. Companies operating remote mine sites with diesel generation face particular transition exposure.
Water Management
Water is often the most contentious sustainability issue for mining operations. The SASB metrics include total water withdrawn, consumed, and discharged, with a specific focus on operations in water-stressed regions.
For mining companies in Australia, Chile, South Africa, and parts of Canada, water scarcity is already a material operational constraint. Climate change is expected to intensify this through altered rainfall patterns, prolonged droughts, and increased competition for water resources. Conversely, extreme rainfall events increase the risk of uncontrolled discharge from tailings storage facilities.
Waste and Hazardous Materials
Tailings management is perhaps the single most material physical risk for mining companies. The metrics cover tailings storage facility inventory, hazardous waste generated, and waste rock management.
Climate change amplifies tailings risk in two directions: extreme rainfall increases the probability of dam overtopping or failure, while prolonged drought can affect the geochemical stability of tailings. The Global Industry Standard on Tailings Management (GISTM) provides the framework most companies reference, and ISSB disclosures should address how physical climate risks are integrated into tailings risk assessments.
Biodiversity and Land Use
The SASB guidance includes metrics on land disturbed by operations, reclamation progress, and operations in or near areas of protected conservation status. While biodiversity is primarily an IFRS S1 topic (not climate-specific), it becomes climate-relevant when considering ecosystem-based risks such as deforestation, water catchment degradation, and rehabilitation obligations that climate change may extend or complicate.
Community Relations and Human Rights
Social licence to operate is financially material for mining companies. Project delays, permit revocations, and operational disruptions from community opposition have quantifiable financial impacts. The SASB metrics cover social impact assessments, Indigenous rights engagement, and resettlement practices.
In the context of climate, the intersection matters: communities facing water stress or extreme weather may become more sensitive to mining operations competing for scarce resources. Companies that cannot demonstrate responsible climate-related resource management face escalating regulatory and reputational risks.
Workforce Health and Safety
The industry-based guidance includes fatality rates, total recordable injury rates (TRIR), and near-miss frequency. While not directly climate-related, extreme heat events increasingly affect worker safety in surface mining, and climate-driven changes to ground stability affect underground operations.
Climate Risks Specific to Mining
Physical Risks
- Water scarcity: reduced water availability for processing, dust suppression, and tailings management in arid regions
- Extreme heat: worker safety limits, equipment performance degradation, increased energy demand for cooling and ventilation
- Flooding and extreme rainfall: tailings dam overtopping, pit flooding, transport infrastructure damage
- Bushfire and wildfire: direct threat to surface operations, infrastructure, and surrounding communities (particularly relevant in Australia)
- Permafrost thaw: foundation instability for Arctic mining operations and infrastructure
Transition Risks
- Carbon pricing: increasing cost of diesel and electricity where carbon pricing mechanisms apply (Australia's Safeguard Mechanism, Canada's federal carbon pricing, UK ETS)
- Declining demand for thermal coal: structural demand destruction under net-zero pathways
- Regulatory tightening: stricter environmental permitting, water allocation restrictions, rehabilitation bond requirements
- Investor pressure: mining-focused divestment campaigns, ESG screening by institutional investors
Opportunities
- Critical minerals for the energy transition: lithium, cobalt, copper, nickel, and rare earths face growing demand from battery manufacturing, renewable energy infrastructure, and electrification
- Recycling and circular economy: secondary resource recovery as an alternative or supplement to primary extraction
- Renewable energy for mine sites: solar and wind generation to reduce diesel dependency at remote operations
Jurisdictional Context
Australia
Mining is the backbone of the ASX. BHP, Rio Tinto, Fortescue, South32, and dozens of mid-tier producers are all within scope of AASB S2. Group 1 entities (the largest) began reporting from 1 January 2025. The SASB metrics for Extractives & Minerals Processing provide a directly applicable framework for Australian miners conducting their AASB S2 materiality assessment.
Australia's National Greenhouse and Energy Reporting (NGER) scheme already collects Scope 1 and 2 emissions data from large emitters, giving many mining companies a head start on the GHG metrics.
Canada
Canada's mining sector is globally significant, with TSX-listed companies spanning gold, copper, potash, and uranium. Under CSDS 1 and 2, these companies will need to consider the ISSB's industry-based guidance. Canada's federal carbon pricing and provincial equivalents make carbon cost exposure a key metric for Canadian miners. The CSDS materiality assessment framework provides a structured approach.
United Kingdom
Several of the world's largest mining companies are dual-listed in London (BHP, Rio Tinto, Anglo American, Glencore). Under UK SRS, these companies will need to apply the industry-based guidance from January 2027. The UK's net-zero targets and participation in the UK ETS create additional transition risk exposure for London-listed miners.
How to Conduct a Mining Materiality Assessment
- Identify your SICS sub-industry — Metals & Mining, Coal Operations, Iron & Steel, or Construction Materials. Each has distinct disclosure topics.
- Review the applicable SASB metrics — Start with the full list for your sub-industry and mark each topic as potentially material or not applicable.
- Assess physical climate risks by site — Map your operations against physical risk datasets (water stress, extreme heat, flood zones, wildfire exposure). Site-level risk varies enormously.
- Evaluate transition risks — Consider carbon pricing exposure, demand outlook for your commodities under different climate scenarios, and regulatory pipeline in your operating jurisdictions.
- Quantify Scope 3 where material — For iron ore and coal producers, downstream processing and combustion emissions are likely material. For precious metals and critical minerals, Scope 3 may be less significant.
- Document your reasoning — Record why each topic was included or excluded. Auditors expect evidence of engagement with the industry-based guidance.
For a detailed walkthrough of the four-step ISSB materiality process, see our ISSB vs. ESRS process analysis. Companies also subject to CSRD/ESRS can run both assessments in parallel.
How Materiality Master Can Help
Materiality Master provides a structured, software-guided approach to ISSB-aligned materiality assessments for mining companies. Whether you are reporting under AASB S2, CSDS, or UK SRS, the platform helps you identify industry-relevant risks, assess financial materiality, and generate audit-ready documentation. See our pricing for details.
Frequently Asked Questions
Which SASB industry classification covers mining?
Mining falls under the Extractives & Minerals Processing sector in the SICS classification. Specific sub-industries include Metals & Mining, Coal Operations, Iron & Steel Producers, and Construction Materials.
Is Scope 3 reporting required for mining companies under ISSB?
IFRS S2 requires disclosure of Scope 3 emissions when material, with transitional relief in the first year. For mining companies, Scope 3 typically includes processing, transportation, and end-use of extracted materials — often the largest share of total lifecycle emissions.
How do Australian mining companies apply ISSB industry metrics?
Australian mining companies in AASB S2 Groups 1-3 must consider the ISSB's industry-based guidance when identifying material climate risks. The SASB metrics for Extractives & Minerals Processing provide a structured starting point for their materiality assessment.
Are tailings and water management covered by ISSB climate disclosures?
Water management is a specific SASB disclosure topic for mining. Tailings management falls under waste and hazardous materials. While these are primarily sustainability topics under IFRS S1, they become climate-relevant when linked to physical risks like extreme rainfall or drought.
