Cef843bf en

Handbook on Environmental
Due Diligence in Mineral

Supply Chains
Handbook on Environmental
Due Diligence in Mineral
Supply Chains
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and
arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.
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Please cite this publication as:

OECD (2023), Handbook on Environmental Due Diligence in Mineral Supply Chains, OECD Publishing, Paris,
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3
Foreword
The OECD has been at the forefront of providing guidance on how businesses can maximise their positive
contributions to sustainable development through identifying and addressing adverse impacts in their
operations and supply chains. This work is rooted in three key OECD instruments that provide government-
backed recommendations on responsible business conduct (RBC): the OECD Guidelines for Multinational
Enterprises on Responsible Business Conduct (MNE Guidelines), the OECD Due Diligence Guidance for
Responsible Business Conduct (RBC Guidance) and, in the minerals sector, the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Minerals
Guidance). Together, these instruments set out the expectations of governments for enterprises to conduct
due diligence to identify, prevent and mitigate actual and potential adverse impacts in mineral supply
chains.
The purpose of this Handbook is to support the implementation by business of OECD standards on
responsible business conduct by elaborating on how to use the OECD due diligence framework to take
account of environmental risks and adverse impacts in mineral supply chains, from extraction to
processing, smelting or refining, and recycling. This Handbook is part of the work the OECD undertakes
to provide practical support to enterprises on the implementation of standards on RBC risks, an earlier
example in the minerals sector being the Practical actions for companies to identify and address the worst
forms of child labour in mineral supply chains. Beyond the mineral supply chains, the OECD has also
developed tailored guidance to help businesses carry out due diligence in other sectors, specifically in the
garment and footwear, finance, and agriculture sectors.
HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

4
Acknowledgements
The project was funded in part by the German Ministry for the Environment, Nature Conservation, Nuclear
Safety and Consumer Protection (BMUV). The German Environment Agency (UBA) and the German
Federal Institute for Geosciences and Natural Resources (BGR) provided support and assistance.
This Handbook was authored by the OECD Centre for Responsible Business Conduct, which drew on the
technical expertise and support of UBA, BGR and OECD’s Environment Directorate. Levin Sources Limited
provided support in the initial drafting and consultation process. The document also benefitted from input
from 25 organisations as part of an expert working group, including representatives from government, the
private sector and civil society. The authors would like to gratefully acknowledge the time and valuable
input provided by the members of the expert working group. During the development of the Handbook, the
OECD Secretariat held several working meetings with experts on artisanal and small-scale mining,
remedy, circularity and recycling. In addition, the Secretariat received extensive feedback from industry
and civil society as part of an informal public consultation that took place from July to September 2022.
Input was also received from Delegates to the OECD Working Party on Responsible Business Conduct
(WPRBC). The Secretariat would like to thank all of those who dedicated their time and shared their
knowledge as part of these processes.

5
Table of contents
Foreword 3
Acknowledgements 4
Executive summary 7
1 Introduction 8
Why environmental due diligence matters to businesses operating in mineral supply chains 9
Circularity and enhanced use of secondary resources 9
Sourcing from ASM 11
2 Understanding environmental risks and impacts 12

What does the Handbook cover? 13
What is meant by environmental risks and adverse impacts and how should enterprises assess
severity? 14
3 Due diligence as a tool 17

Risk-based due diligence to address environmental risks and adverse impacts 18
Target audience and responsibility for due diligence 19
4 Six step due diligence approach 23

Integrating environmental risk management into due diligence systems 24
Step 1: Embed RBC into policies and management systems 24
Step 2: Identify and assess actual and potential adverse impacts associated with enterprise
operations, products or services 28
Step 3: Cease, prevent, and mitigate adverse impacts 40
Step 4: Track implementation and results 46
Step 5: Communicate how impacts are addressed 49
Step 6: Provide for or cooperate in remediation when appropriate 51

6
Annex A. Glossary of environmental terms 54

Annex B. Non-exhaustive list of tools to identify, assess and manage environmental
risks and impacts 57
References 59
Notes 63
FIGURES
Figure 1. Addressing environmental impacts in mineral supply chains 20
Figure 2. How to use OECD instruments on RBC together 22
Figure 3. Due diligence process and supporting measures 24
Figure 4. Addressing adverse impacts 41
TABLES
Table 1. Examples of indicators of scale, scope and irremediable character for adverse environmental impacts 14
Table 2. Examples of environmental issues in upstream mineral supply chains 15
Table 3. Integrating EMS into broader RBC considerations 28
Table 4. Examples of indicators and sources of information for identifying and assessing key environmental
risks in upstream supply chains 31
Table 5. Illustrative examples of conditions related to mining, processing, smelting, recycling or refining
activities (according to risk type) that may warrant enhanced due diligence 35
Table 6. Examples of potential prevention and mitigation activities by suppliers for environmental risks 44
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7
Executive summary
Enterprises play a key role in advancing sustainable economies and can contribute to delivering an
effective and progressive response to global, regional and local environmental challenges, including the
urgent threat of climate change. The upstream segment of the mineral supply chain (generally understood
as the point of extraction through to the point of transformation) has traditionally been associated with
significant environmental risks and impacts. At the same time, the sector is growing, driven by an
increasing demand for minerals to fulfil the material needs of a growing and increasingly affluent global
population, as well as ambitious government and business renewable energy targets and rising demand
for minerals critical to the energy and digital transition, such as cobalt, copper, lithium, nickel and rare
earths among others.1 Although a more ‘circular economy’ based on recycling and reuse of minerals has
clear potential for reducing certain environmental risks and adverse impacts, primary extraction of minerals
will remain critical to delivering the low carbon transition and more broadly achieving the Sustainable
Development Goals (SDGs) at the speed required.2
This Handbook provides an introduction to environmental issues in the upstream segment of mineral
supply chains. It is intended to help downstream enterprises (metal traders and exchanges, component
manufacturers, product manufacturers, original equipment manufacturers and retailers) understand how
they can embed environmental considerations into their supply chain due diligence processes, while also
helping upstream enterprises (miners, local traders and exporters, international concentrate traders,
smelters and refiners, and recyclers3) meet the due diligence expectations of their customers and other
downstream business relationships.
The Handbook has four sections. Chapter 1 provides the background on why risk-based environmental
due diligence matters to businesses operating in mineral supply chains and considers environmental due
diligence in the context of two important topics in the minerals sector: artisanal and small-scale mining
(ASM) and circular value chain approaches. Chapter 2 clarifies what is meant by adverse environmental
impacts and provides examples of common environmental issues found in upstream mineral supply chains.
It also aims to help businesses understand factors that may affect the severity and likelihood of
environmental risks. Chapter 3 discusses integrating environmental risks and impacts into enterprises’
implementation of the OECD six-step due diligence framework and finally Chapter 4 leads readers through
the six-step risk-based due diligence framework, answering specific questions on how business can
address environmental considerations under each of the steps. Annex A includes a Glossary of
environmental terms while Annex B provides a, non-comprehensive, list of useful resources and materials.

8
1 Introduction
This introduction sets out why risk-based environmental due diligence

matters to businesses operating in mineral supply chains and considers
environmental due diligence in the context of two important topics in the
minerals sector: artisanal and small-scale mining (ASM) and circular value
chain approaches.

9
Why environmental due diligence matters to businesses operating in mineral

supply chains
Enterprises play a key role in advancing sustainable economies and can contribute to delivering an
effective and progressive response to global, regional and local environmental challenges, including
contributing to reaching the goals of climate change mitigation and adaptation. Meanwhile, environmental
degradation presents risks to people and the planet that may be heightened by business activities.
Expectations for environmental action by the private sector have been spurred by public policy, civil society,
the scientific community, investors and industry itself, with public pressure and litigation playing an
important role.4 Nationally Determined Contributions (NDCs) include the objective to mobilize finance flows
towards low greenhouse gas (GHG) and climate-resilient development and recognise non-party
stakeholders, including business, as an integral part of the global solution (United Nations Framework
Convention on Climate Change, 2016[1]).5
Increasing demand for minerals to fulfil the material needs of a growing and increasingly affluent global
population (OECD, 2019[2]),6 renewable energy targets and demand for minerals such as cobalt, copper
and lithium for the energy and digital transitions is driving growth in the mining and metals sector. Although
a more ‘circular economy’ based on recycling and reuse of minerals has clear potential for reducing certain
environmental risks and adverse impacts, primary extraction of minerals will remain critical to delivering
the low-carbon transition and, more broadly, achieving the Sustainable Development Goals (SDGs).7
There is an insufficient amount of metals currently in circulation for the deployment of low-carbon
technologies at a scale consistent with agreed climate targets, and therefore continued mineral extraction
is needed (IEA, 2021[3]).
Identifying and addressing adverse environmental impacts in the upstream segment, where this primary
mineral extraction takes place, may help an enterprise maximise positive contributions to society and
sustainable development, improve stakeholder relationships, protect its reputation, and create more value
by reducing operational costs by, for example, finding ways to use less water or energy. Due diligence
processes can also help prevent supply chain blockages and delays, and reduce the time it takes to bring
new assets onstream, which is of critical importance when delivering the digital and low-carbon energy
transitions. Comprehensive due diligence processes can also help an enterprise meet legal requirements
on labour, environmental, corporate governance and anti-bribery requirements.
The respect for and fulfilment of the human right to a clean and healthy environment has been recognised
in resolution 48/13 of the UN’s Human Rights Council.8 An enterprise will need to understand the links
between environmental and human rights risks in the minerals sector and how to make use of due diligence
processes – often already used for human rights risks – when addressing environmental risk and vice
versa. Once environmental risks and adverse impacts have been identified, an enterprise should consider
the ways in which they generate human rights risks and adverse impacts and ensure any mitigation or
remedy addresses both categories. Recognising human rights to a clean and healthy environment is
particularly important in ensuring a just transition to global net-zero emissions and continued responsible
engagement rather than disengagement as the primary approach to environmental risk management in
supply chains.
Circularity and enhanced use of secondary resources
As stated above, the demand for minerals and metals to support a growing, low-carbon, global economy
over the coming decades cannot be met by one type of source alone. Both primary (mined) and secondary
(re-used, refurbished, remanufactured, recycled, recovered) materials will be critical to achieving the clean
energy and digital transition. This Handbook therefore promotes RBC in mining, recycling, and minerals
and metals processing, all of which will be critical for sustainable development. 9

10 
Box 1. The circular economy

Although there is no one accepted definition of the circular economy, a circular economy seeks to:
(i) maximise the value of the materials and products circulating within the economy; (ii) minimise
material consumption, with particular attention to virgin materials, hazardous substances, and certain
waste streams (such as plastics, food, electric and electronic goods); (iii) prevent the generation of
waste; and (iv) reduce hazardous components in both waste and products (OECD, 2020[4]; OECD,
2021[5]).
In pursuing a circular economy, there are a variety of mechanisms that can modify the flow of products
and materials through the economy, and ultimately result in lower rates of natural resource extraction.
The OECD has highlighted three main mechanisms including:
• Closing resource loops – the diversion of waste from disposal and subsequent transformation
into secondary raw materials.
• Slowing resource loops or flows – the retention of products, and their constituent materials, in
the economy for longer periods.
• Narrowing resource flows – generating additional economic value from a fixed amount of natural
resources (OECD, 2019[6]).
Source: OECD (2021[7]), The role of OECD instruments on responsible business conduct in progressing environmental objectives,
https://mneguidelines.oecd.org/The-role-of-OECD-instruments-on-responsible-business-conduct-in-progressing-environmental-
objectives.pdf .
The application of circular economy principles and the use of secondary materials can contribute to the
reduction of environmental impacts (Bibas, Chateau and Lanzi, 2021[8]; OECD, 2019[2]). Downstream
businesses, as well as upstream businesses like smelters or refiners, may consider where opportunities
exist to implement circular economy principles in the design, production, remanufacturing, distribution,
consumption, and collection of their products and how these opportunities may be integrated into their
business model. Circular economy principles need to be scaled-up and enhanced in mineral supply chains
so that materials can be more efficiently and routinely collected and recovered from end-of-life products.
Sourcing from secondary materials to complement or replace primary raw materials can offer opportunities
to reduce environmental harms if secondary materials or energy from secondary materials are sourced
responsibly.
The availability of recycled materials on the market depends on the availability of materials that could be
recycled but also on their actual recycling rates (which depend on the technologies currently in place, the
economic case for recycling them, regulation in place, etc.) and materials from the ‘urban mine’ (in-use
material stocks), which only become available after a time lag (IEA, 2021[3]). For bulk metals, recycling
practices are well established and metals are readily available, but this is not yet the case for many energy
transition metals such as lithium and rare earth elements. Emerging waste streams from clean energy
technologies (e.g. batteries and wind turbines) are expected to increase after 2030, at a time when mineral
demand is set to still be growing rapidly. The IEA estimate that by 2040, recycled quantities of copper,
lithium, nickel and cobalt from spent batteries could reduce combined primary supply requirements for
these minerals by around 10% (IEA, 2021[3]).
Recycling will not eliminate the need for continued investment in primary supply of minerals and according
to the World Bank, investment in primary supply will still be needed even in the case that recycling rates
reach 100% by 2050 (World Bank, 2020[9]). Therefore, the Handbook recognises the role of both primary
and secondary supply chains in sustainable development, but also notes that, if poorly managed, both can
cause environmental risks and impacts. It is important to note that although primary mining in general has

 11
more environmental risks than recycling, it can hold significant economic opportunity for regions with high
mineral endowments (and in some localities, the only economic opportunity), provided there is good
governance and equitable distribution of benefits to the state, local communities, and investors.
Sourcing from Artisanal and Small-Scale Mining
One of the overarching objectives of OECD RBC instruments is the sustainable development of mining
communities through responsible engagement, including in high-risk and conflict-affected areas where
many producers may be informal. While ASM presents some unique risks, avoiding it altogether instead
of seeking to address those risks typically only worsens conditions for mineral-producing communities.
ASM is a source of livelihoods and employment in many regions of the world. It is estimated that ASM
employs between 40 and 100 million people worldwide, compared to 7 million in industrial mining (IGF,
2017[10]). Besides being a major source of employment in many developing countries, ASM can also help
address security of supply issues for critical minerals, including those key to driving the green transition
(Moore et al., 2020[11]).
In many countries, ASM takes place in a regulatory grey zone, whereby its economic role is not explicitly
recognised and facilitated by the state, including being properly legislated or regulated, but is largely
tolerated. The Minerals Guidance encourages businesses to engage with ‘legitimate ASM’ and provides a
framework for doing so. This framework is elaborated on in the OECD FAQ on Sourcing Gold from Artisanal
and Small-Scale Miners (OECD, 2016[12])
Responsible engagement of ASM producers can lead to the progressive formalisation of ASM activities.
Formalised mine sites are more capable of working through formal channels of trade, implementing risk
management plans, and appear to be subject to more regulatory inspection visits regarding environment,
waste management, and radioactivity. In view of these considerations, this Handbook recommends that
businesses and other stakeholders seek to engage with legitimate ASM producers in a spirit of progressive
improvement, including by considering the provision of technical and financial support to help ASM actors
implement corrective action plans. To channel this support, there are several industry-led or multi-
stakeholder collaboration and cost sharing mechanisms already in place, and there is the potential for
others to be developed.10

12 
2 Understanding environmental risks

and impacts
This chapter clarifies what is meant by environmental risks and impacts and
provides examples of common environmental issues found in upstream
mineral supply chains. The Chapter also helps business understand factors
that may affect the severity and likelihood of risks, both of which are critical
considerations when conducting risk-based due diligence.

 13
What does the Handbook cover?
This Handbook considers a range of environmental risks and impacts that may arise in minerals supply
chains from the point of extraction through key points of transformation, primarily mining, smelting, refining,
and recycling, for all minerals and metals (whether for domestic or export markets), including construction
materials, industrial minerals, base metals, precious metals, gemstones and technology critical elements,
amongst others (OECD, 2021[13])). They also recognise that environmental impacts can be collective and
interlinked or isolated, as well as localised or transboundary in nature.
The Handbook focuses on the following adverse environmental impacts in mineral supply chains:11
• climate change
• biodiversity loss and degradation,12 covering species and terrestrial, marine and other aquatic
ecosystems (for example, deforestation, damage to protected areas and soil erosion)
• air, water and soil pollution
• mismanagement of waste, including hazardous substances
• noise and vibration
• damage to aesthetics and cultural heritage sites
• water depletion.
Given the broad range of environmental risks and adverse impacts that can arise from upstream activities
in mineral supply chains, and the various ways that these may manifest in different contexts, this Handbook
does not aim to be exhaustive and does not provide extensive detail for each environmental risk area.
Instead, it considers examples and points readers to additional resources that may provide further technical
information on best practice for assessing, preventing, mitigating and remediating environmental risks and
adverse impacts along mineral supply chains.
Box 2. Different ways that environmental impacts may arise and manifest
Potential environmental impacts in minerals supply chains can be understood in a number of ways:
Impacts that result directly by an entity’s operational practices. For instance, when a business
clears an area resulting in loss of biodiversity (for example forests, wetlands, coral reefs), or when a
mine discharges toxic waste resulting in air, water or soil contamination, Impacts can happen:
• Locally (for example mining-related discharge of acid and metalliferous drainage affecting local
areas, or a gold processor burning mercury from an amalgam and contaminating downwind
areas).
• Remotely (for example continuous discharge of high volumes of air pollutants by a smelter
causing remote acid rain, or riverine tailings disposal – when mine tailings are transported over
long distances in rivers and sediment deposition causes impacts far downstream).
Impacts that are enabled by, but not a direct result of, an entity’s operational practices,13 for
instance:
• When investing in a steel plant, members of the board vote against installing costly equipment
which treats run-off from the plant which pollutes local water sources.
• When opening up roads in previously inaccessible areas that attract other economic actors who
go on to cause environmental impacts (for example clearing primary or secondary forest).

14 
Impacts that are cumulative and collective in nature. Combined impacts on the environment of more
than one activity, that can take place over a period of time (cumulative) or concurrently by several actors
(collective), where the aggregate impact can be greater than the individual activities.
• For example, miners and farmers in the same area having a collective impact on a forest, or
different mining operators in the same watershed intensifying disturbance of aquatic
ecosystems, or the air emissions of multiple refiners reducing air quality within an airshed, or
when a smelter or refiner produces GHGs through consumption of fossil fuels in a manner not
consistent with internationally agreed global temperature goals (IFC, 2013[14]).
Impacts that have chronic, persistent or constantly recuring adverse consequences for human or
ecological systems over a long period of time:
• For example, large-scale consumption of water resulting in water scarcity and localised aquatic
ecosystem impacts.
Impacts that are permanent or irreversible, and continue or endure without fundamental or marked
change, an impact that cannot be remediated:
• For example, the deforestation of primary rainforest or activities that cause the extinction of a
particular species.
Impacts that are acute and occur over a short period of time. They are used to describe brief
exposures and effects which appear promptly after exposure:
• For example, tailings dam failure that results in significant and immediate harm to the local
environment and communities.
The MNE Guidelines provide specific recommendations for understanding and assessing
environmental impacts associated with an enterprise’s operations, products and services (see Box 3
below).
What is meant by environmental risks and adverse impacts and how should
enterprises assess severity?
For many enterprises, the term risk implies financial, market, operational or reputational risk to the
enterprise itself. In contrast, the MNE Guidelines refer to risks to people, the environment and society that
enterprises cause, contribute to, or to which they are directly linked – an outward-facing approach to risk.
To assess the severity of an environmental impact, businesses should consider the scale, scope and
irremediable character of the impact (see Table 1 below for examples of scale, scope and irremediable
nature of the impact in the context of environmental impacts). 14
Table 1. Examples of indicators of scale, scope and irremediable character for adverse
environmental impacts
Adverse impact Examples of scale Examples of scope Examples of the irremediable
character
Biodiversity loss (e.g. deforestation, Extent of impact on human Geographic reach of the impact Degree to which rehabilitation of
coral reef degradation, species loss) health Number of species impacted the natural site is possible or
and damage to protected areas Extent of changes in species practicable
Climate change / GHG emissions composition The length of time remediation
Improper use and disposal of Water use intensity (% use would take
hazardous materials of total available resources)

 15
Adverse impact Examples of scale Examples of scope Examples of the irremediable

character
Noise and vibration Degree of waste and
Physical instability, soil erosion and chemical generation
land degradation (tons; % of generation)
Pollution (air, water etc)
Damage to aesthetics and cultural
heritage sites
Waste mismanagement
Water depletion
Source: Adapted from the OECD (2018[15]), OECD Due Diligence Guidance for Responsible Business Conduct,
https://mneguidelines.oecd.org/OECD-Due-Diligence-Guidance-for-Responsible-Business-Conduct.pd.f
For example, factors that may influence the severity and likelihood of adverse impacts to the environment
in upstream mineral supply chains may include the:
• local environment (e.g. areas of high biodiversity, its proximity to protected areas or world heritage
sites)
• vulnerability of the ecosystem and surrounding communities (e.g. water scarce regions)
• material characteristics (e.g. hazard classification, persistence within the environment)
• prevalence of extreme events (e.g. drought, earthquakes)
• political interference, corruption, instability or conflict
• financial viability of the mining operation (e.g. level and type of capitalisation)
• size and scale of operation
• level of organisation/formalisation of the operation
• ownership of the operation (e.g. publicly listed, private, state owned)
• appropriate nature of the technology being used (fit-for-purpose)
• stage of the mining lifecycle (e.g. exploration, post closure)
• level of mechanisation.
Many environmental impacts can lead to impacts on human rights, particularly impacts on human health
and safety. This includes, for example, unprotected contact with toxic substances throughout the mining,
processing and recycling process and contamination of sources of food and water.
While some environmental impacts will manifest immediately, others will take time – future environmental
impacts of certain activities may not be immediately apparent and therefore may be harder to assess and
manage, and it may be harder to determine causation. Environmental impacts may also range from short-
term (reducing once the cause is removed) to permanent (continuing after the cause is removed).
Table 2. Examples of environmental issues in upstream mineral supply chains

Environmental issue Description
Biodiversity loss Biodiversity loss or degradation, of a specific area, for example deforestation and land use change related to open pit
(e.g. deforestation, mining or damage to marine habitats / ecosystems associated with deep sea mining. It is of high concern for all
coral reef degradation, enterprises operating in forested, marine and other key biodiversity or protected areas, in all stages of the supply chain.
species loss) and
damage to protected
areas
Climate change Changes in global temperatures and weather patterns resulting from anthropogenic GHG emissions. GHG emissions in
(e.g. GHG emissions, mineral supply chains may be particularly prevalent at the smelting and processing stages of the supply chain. GHG
failure to adapt to emissions should be measured either on an absolute or intensity basis for scopes 1,2 and 3, where appropriate.15
As the world is already experiencing climate change – including changes in average temperature, increased frequency

16 
Environmental issue Description

physical risks of climate of extreme weather events, and changes in seasons – adaptation refers to adjustments in ecological, social or
change) economic systems in response to actual or expected climatic changes. Failure to adapt increases the likelihood of
potential damages to the environment, people and society from climate change.
Improper use or Materials that when released to the environment, can pose a risk to workers, communities, water sources and wildlife.
disposal of hazardous Examples of hazardous materials include:
materials • elements present in the ore, such as radioisotopes, arsenic, mercury and other heavy metals that are
released through minerals processing
• process chemicals, such as acids, organic compounds, cyanide and mercury
• recycling residues, which may be non-valuable residues or waste containing non-recoverable valuable
materials (such as residual lead in wastes from lead-acid battery recycling).
Noise and vibration Noise and vibrations can disturb and have severe adverse impacts on local biodiversity as well as people. Noise
sources include drilling and blasting, fixed and mobile equipment, excavators, the loading/unloading and movement of
trucks, crushers, mills, air fans, diesel generators and large or handheld pneumatic, percussion and grinding tools.
Vibrations are principally associated with blasting and passage of heavy vehicles.
Physical instability, soil Movement and collapse of tailings storage facilities, waste rock dumps and slopes can remain a risk to local
erosion and land communities and nature over an extended period, including beyond the life of the producing facility. Compaction,
degradation extraction and disruption of soil physical structure.
Pollution (air, Contamination of the environment by any chemical, physical or biological agent that modifies the natural characteristics.
water etc.) Planned or accidental discharge of effluents containing physical, chemical and/or biological contaminants into
waterbodies, which causes damage to aquatic ecosystems and terrestrial organisms using that water. The risk of water
pollution is influenced by site-specific factors, such as rainfall, type of ore being exploited, chemicals being used,
sensitivity of the receiving environment and the quality of environmental management. Water pollution is an
environmental impact which intersects with the human right of access to safe, affordable and reliable drinking water.
Air pollutants include dust, particulates, fumes, vapours and other non-GHG emissions arising from activities such as
drilling, blasting, excavation, material size reduction, loading and movement and smelting, refining and recycling. They
should be considered in terms of their volumes, treatments and emission locations. Some emissions cause adverse
impacts on land and soil quality and ecosystem and human health in downwind areas when particulates and gases are
washed out by rainfall or settle under gravity.
Damage to aesthetics Operations result in visible deterioration and negative aesthetic quality of natural and manmade landscapes or damage
and cultural heritage to cultural heritage sites, which impairs people’s ability to enjoy and benefit from their environment. This typically occurs
sites in circumstances where facilities occupy large land surface areas or where industrial buildings are visible in residential
and rural landscapes.
Waste mismanagement The impact of solid and liquid waste on the environment and human health depends on its hazardous (or non-
hazardous) properties, mass and volume and on quality of waste management (collection and treatment). Large
volumes of waste can be generated at all stages of the supply chain, but are more prominent where product to waste
ratio is low (e.g. low ore grade mining operations) circular regenerative processes are not applied, in upstream
operations generally and in recycling operations that do not manage non-valuable materials and hazardous fractions
and residues. Waste mismanagement can result in the dispersion of contamination and adversely impact water, soil
and air quality.
Water depletion More water being used than is available by natural replenishment or when water is diverted from ecosystems and
users. Risks are often higher in permanent or seasonally arid environments.
Note: Further iterations of this table are provided in Chapter 4: Six step due diligence approach and provide guidance on indicators and sources
of information for environmental risks and monitoring of mitigation efforts.

 17
3 Due diligence as a tool
This chapter introduces due diligence as a tool and explains why a

risk-based due diligence approach is critical when addressing
environmental risks and adverse impacts in businesses own operations and
global supply chains.

18 
Risk-based due diligence to address environmental risks and adverse impacts
Risk-based due diligence expects enterprises to identify, prevent, mitigate and account for how they
address actual and potential impacts to people, society and the planet. As it will often not be possible for
enterprises to identify and respond to all risks and impacts related to their activities and business
relationships simultaneously and with the same degree of attention, the MNE Guidelines encourage them
to prioritise their most significant (i.e. severe16 and likely) risks and impacts, and to dedicate attention
and resources accordingly. In this way, risk-based due diligence is concerned with making progress on the
most significant impacts to people, planet and society.
Contextual factors, such as resource availability, availability of data and technologies, firm size, the degree
of leverage an enterprise has over a particular supplier, where risks or impacts occur in the supply chain
may influence what actions are appropriate in a specific context. The size or resource capacity of an
enterprise and the degree of leverage it has over a particular supplier does not change its responsibility to
conduct due diligence commensurate with the risk but may affect how an enterprise carries out its due
diligence.
Adverse environmental impacts are often closely inter-linked with other matters covered by the MNE
Guidelines such as human rights, impacts to workers and communities, access to livelihoods and land
tenure rights. In this respect, it is important for enterprises to assess and address social impacts in the
context of their environmental management and due diligence activities; including as part of their risk
prioritisation processes.
Risk-based due diligence not only helps ensure that the most significant adverse impacts are addressed
first, it also helps ensure that due diligence is practically implementable for businesses. Given the
widespread and dispersed nature of environmental impacts in mineral supply chains, enterprises will not
be able to identify and respond to every adverse impact, monitor and track every business partner or trace
every product simultaneously. As such, a risk-based approach does not expect perfect results or risk-free
value chains and does not penalize businesses for the presence of risks or adverse impacts in their supply
chains. Instead, it expects enterprises to prioritise appropriately, target their highest risk operations and
business relationships and demonstrate meaningful and measurable progress over time against specific,
time-bound targets and indicators.
Despite the flexibility provided in the risk-based approach, enterprises are not expected to decide arbitrarily
what is and is not important in a specific context. Instead, OECD RBC standards set important parameters
for how businesses should prioritise. Demonstrating credible prioritisation processes and progress
against outcome-oriented and time-bound targets helps to ensure that businesses arrive at decisions
about allocating resources and time in a way that is efficient, effective and aligned with international
standards.
Due diligence should also be adapted to the nature, severity and likelihood of the adverse impact. When
the likelihood and severity of a risk or impact is high, due diligence should be more extensive. This also
involves tailoring approaches to specific risks and impacts.
The expectation that businesses prioritise risks and impacts based on severity and likelihood applies to
the entire six-step due diligence process –starting with the high-level scoping of risk issues that then
informs the deeper-dive assessments on higher-risk business relationships, through to how an enterprise
responds to actual or potential adverse impacts. It also shapes how businesses are expected to track and
report on their due diligence.17

 19
Target audience and responsibility for due diligence
Due diligence is a whole-of-supply chain process and applies to all business relationships, including those
relationships beyond contractual, ‘first tier’ or immediate relationships (OECD, 2023[16]). Accordingly, all
businesses along the minerals supply chain, from the point of extraction to end-user, have a role to play.
The nature of due diligence, however, can be affected by a business’ position in the supply chain. In supply
chains with key points of transformation like smelters and refiners in the minerals sector, OECD standards
on RBC recognise the unique role played by such entities as “control points”. Downstream enterprises, for
example, can make use of control points’ leverage and visibility over other suppliers by checking to make
sure that control points are conducting due diligence themselves, in order to identify, prevent and mitigate
risks at more remote tiers of their supply chain further upstream.
The concept of control points helps delineate responsibilities between upstream entities (miners, local
traders and exporters, international concentrate traders, smelters, refiners and recyclers) and downstream
entities (metal traders and exchanges, component manufacturers, product manufacturers, original
equipment manufacturers and retailers) in many mineral supply chains. The position of control points
between downstream enterprises and suppliers further upstream can also influence enterprises’
relationships to adverse impacts and thus where the primary responsibility for addressing the impact lies
(see Figure 1).
Since this Handbook addresses adverse environmental impacts in the minerals sector from the point of
extraction through to key points of transformation, downstream enterprises can use the Handbook both to:
(a) evaluate the due diligence practices of control points on environmental risks and impacts further
upstream; and (b) identify and assess impacts at the control point. Control points like smelters and refiners,
and other upstream entities should, in turn, exercise leverage over their suppliers to address environmental
risks and impacts, in addition to addressing impacts they themselves cause or contribute to.
This Handbook is therefore addressed to all enterprises in mineral supply chains which may be
causing, contributing or directly linked to actual or potential adverse environmental impacts.
However, it will likely be most useful for enterprises who determine that they are either contributing
to or directly linked to environmental risks or impacts in the supply chain. Figure 1 illustrates how
entities along mineral supply chains should take account of these concepts in determining the nature of
their due diligence. Enterprises using this Handbook are encouraged to bear this in mind and to adapt their
due diligence to their position in the supply chain. In addition, the section on integrating environmental
considerations into each due diligence step provides several examples of ways in which an entity’s position
in the mineral supply chain and its relationship to an adverse impact may affect their due diligence.
The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (“OECD MNE
Guidelines”) set out expectations on how enterprises should avoid and address adverse environmental
impacts related to an enterprise’s operations, products and services. An enterprise’s relationship to the
impact (causing, contributing to, or being directly linked to it) will determine how an enterprise should
respond to identified risks. While many of the risks and mitigation measures in this handbook will be
relevant for enterprises seeking to address adverse impacts they cause, this document focusses
primarily on due diligence of environmental risks in mineral supply chains, with an emphasis,
accordingly, on relationships of contributing or being directly linked to adverse environmental
impacts. Figure 1 illustrates how these relationships may pertain to a typical mineral supply chain. The
diagram also reflects the unique role of smelters and refiners as a control point in mineral supply chains,
with practical implications for the respective roles of downstream entities and upstream entities based on
the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and
High-Risk Areas.

20 
Figure 1. Addressing environmental impacts in mineral supply chains
This Handbook may also be useful for other parties, such as sector-wide and multi-stakeholder initiatives
that facilitate collaboration on due diligence activities, and for workers, trade unions and workers’
representatives, and civil society organisations, including environmental human rights defenders.

 21
Box 3. Cause, contribute and directly linked in the context of environmental impacts
The cause, contribute and directly linked concepts, established in the RBC Guidance, provide a
framework for understanding a business relationship to an actual or potential impact to determine the
appropriate responses.
The MNE Guidelines set out expectations on how enterprises should avoid and address adverse
environmental impacts and contribute to reaching the goals of climate change mitigation and
adaptation; the conservation, restoration, and sustainable use of biological diversity; the sustainable,
efficient and lawful use of land, resources and energy; sustainable consumption and production
including through promotion of circular economy approaches; and pollution prevention, reduction and
control.
The Guidelines define adverse environmental impacts as “significant changes in the environment or
biota which have harmful effects on the composition, resilience, productivity or carrying capacity of
natural and managed ecosystems, or on the operation of socio-economic systems or on people” and
note that environmental impacts should be assessed in light of best available science.
Under the MNE Guidelines an enterprise “causes” an adverse environmental impact if its activities on
their own are sufficient to result in the adverse impact. An enterprise “contributes to” an adverse
environmental impact if its activities, in combination with the activities of other entities cause the impact,
or if the activities of the enterprise cause, facilitate or incentivise another entity to cause an adverse
impact. Adverse environmental impacts can also be “directly linked” to an enterprise’s business
operations, products or services by a business relationship, even if they do not contribute to those
impacts”. Under OECD RBC standards, contribution must be substantial, meaning that it does not
include minor or trivial contributions. The RBC Guidance provides additional guidance on these terms.
Environmental impacts can be collective and interlinked or isolated; they can also be localised or
transboundary in nature. While some environmental impacts are well understood, the extent, nature
and cause of others may be less well understood, evolving, or even unknown. Therefore, while in some
instances it will be possible to assess, based on available science and information, to what extent an
enterprise is contributing to an adverse environmental impact, in other instances such an assessment
may be challenging. In the context of the latter situation, for the purposes of the MNE Guidelines, the
assessment of an enterprise’s contribution to adverse impacts should consider the extent to which its
activities are consistent with widely recognised standards, environmental management processes and
safeguards regarding good environmental practice; benchmarks and standards established in
applicable environmental rules and regulatory frameworks; and relevant international agreements.
Source: OECD (2023[16]), OECD Guidelines for Multinational Enterprises on Responsible Business Conduct,
https://doi.org/10.1787/81f92357-en.
This Handbook demonstrates how existing OECD instruments, namely the Due Diligence Guidance for
Responsible Business Conduct (RBC Guidance) and the Due Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected and High-Risk Areas (Minerals Guidance), can be used to
address environmental risks and impacts in the minerals sector. It does so by situating existing
recommendations in a relevant context, providing examples of how they can be applied and directing users
to related resources. It does not provide new recommendations or risk management expectations.

22 
Figure 2. How to use OECD instruments on RBC together
The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (MNE Guidelines)
are the only comprehensive set of government-backed expectations on how business address adverse
impacts on people and the environment. The OECD has developed specific due diligence guidance
covering different sectors of the economy (e.g. in mineral, garment and agriculture supply chains) and on
specific issues like stakeholder engagement in the extractive sector. In 2018, the OECD developed the
sector-agnostic Guidance for RBC that draws from and builds on sector specific guidance but applies to
businesses in all sectors of the economy. Figure 2 provides illustrates how various OECD instruments on
RBC can be used together.

 23
4 Six step due diligence approach
This chapter leads readers through the six-step risk-based due diligence
framework, answering specific questions on how business can address
environmental considerations under each of the steps.

24 
Integrating environmental risk management into due diligence systems
This Handbook is addressed to all businesses in the minerals supply chain. However, as businesses have
different responsibilities depending on their relationship to identified risks and impacts, they will use the
information provided in this Chapter in different ways – depending on their position in the supply chain and
on their size, where their most significant environmental risks lie, the nature, severity and likelihood of the
impacts they face in practice and the nature of their business relationships.
Figure 3. Due diligence process and supporting measures
Source: OECD (2018[15]), OECD Due Diligence Guidance for Responsible Business Conduct, https://mneguidelines.oecd.org/OECD-
Due-Diligence-Guidance-for-Responsible-Business-Conduct.pdf.
Step 1: Embed RBC into policies and management systems
What do the RBC Guidance and Minerals Guidance say?
• Devise, adopt and disseminate a policy – or combination of policies – on RBC issues that
articulate the enterprise’s commitments to the principles and standards contained in the MNE
Guidelines and its plans for implementing due diligence, for the enterprise’s own operations, its
supply chain and other business relationships.
• Embed the enterprise’s policies on RBC issues into oversight bodies and management
systems so that they are implemented as part of the regular business processes, and incorporate
RBC expectations and policies into engagement with suppliers and other business
relationships.
• Establish a system of controls and transparency over the mineral supply chain. This includes a
chain of custody or a traceability system or the identification of upstream actors in the supply chain.

 25
Key questions on how to integrate environmental risk considerations into Step 1:
• 1.1 How can an enterprise integrate environmental risk considerations into RBC policies and
management systems?
• 1.2 How can an enterprise ensure that its RBC policies are fit for purpose and progressively tailor
them to the enterprise’s most severe and likely risks (identified under Step 2)?
• 1.3 What is the relationship between existing environmental management systems (EMS) and
environmental due diligence under OECD RBC standards?
1.1 How can an enterprise integrate environmental risk considerations into RBC policies and
management systems?
The first step in integrating an enterprise’s most significant environmental risks into RBC policies and
management systems is to identify and prioritise the broad categories of environmental risks the due
diligence system will seek to manage and why.
Enterprises should review and update their existing policies to align with the principles and standards of
the MNE Guidelines, and can consider developing specific policies on their most significant environmental
risks –building on findings from their scoping, assessment and prioritisation processes under Step 2. They
should also update their due diligence policy commitments as risks in the supply chain emerge and evolve.
Table 2. provides an indicative non-exhaustive list of some environmental issues in upstream mineral
supply chains that enterprises can consider integrating into their policies and management systems (and,
where relevant, consider when reviewing a supplier’s own due diligence practices under Step 2).
As part of putting in place RBC due diligence policy and management systems, enterprises should also
take proportionate, risk-based steps to:
• Understand the enterprise’s own capacity, expertise and resources to collect information and
embed due diligence effectively for priority environmental risk issues, with the aim of progressively
improving systems and processes over time. For example, which internal and external
stakeholders, including subject matter experts, are important to consult and engage with? For
example, does the business have a presence in the country in which their supplier is operating that
enables them to carry out regular and reliable monitoring of environmental risks and/or effective
systems for meaningful supplier and stakeholder engagement, where appropriate?
• Establish RBC policy goals in compliance with domestic laws and acknowledge the
importance of applying the core principles of the mitigation hierarchy that prioritizes reducing or
avoiding environmental impacts over restoration, compensation or offsetting measures when
conducting risk management .18 Enterprises may also seek to be responsive to gender equality
issues linked to environmental protection.19
• Seek to understand and address barriers arising from the enterprise’s way of doing
business that may impede the ability of suppliers to implement RBC policy expectations
and/or contribute to adverse impacts in the supply chain (such as the enterprise’s purchasing
practices, business and sourcing models and commercial incentives). Enterprises can also address
the challenge of duplicative and conflicting supplier requirements through collaborating with other
industry actors.
• Embed expectations for suppliers on the enterprise’s most significant environmental risks. In
addition to articulating expectations in RBC policies, enterprises can consider integrating due
diligence expectations into pre-qualification processes, bidding criteria or screening criteria for new
suppliers.

26 
• Defining specific policy red lines. Enterprises may also choose to include detail on potential “red
lines” in their RBC policies or in the expectations they set for new suppliers on environmental risks.
Red lines may comprise situations that could –as a last resort –trigger disengagement from a
supplier (e.g. where environmental risks or impacts are considered irremediable, where there is no
reasonable prospect of change, or where severe impacts or risks are not immediately prevented
or mitigated).
1.2 How can an enterprise ensure that its RBC policies are fit for purpose and progressively tailor them
to the enterprise’s most severe and likely risks?
Environmental policies and management systems may often focus on technical aspects without taking into
account the views of relevant stakeholders and experts.20 However, internal and external stakeholders and
experts can play an important role in helping to ensure that RBC due diligence policy commitments are fit
for purpose under OECD standards. Meaningful stakeholder engagement is a key component of the due
diligence framework, although which stakeholders are relevant at a particular point in time and in a
particular context will depend on the enterprise and its activities.21
Box 4. Meaningful stakeholder engagement

Meaningful stakeholder engagement is a key component of the due diligence process. In some cases,
stakeholder engagement may also be a right in and of itself. Stakeholder engagement involves
interactive processes of engagement with relevant stakeholders, through, for example, meetings,
hearings or consultation proceedings. Relevant stakeholders are persons or groups, or their legitimate
representatives, who have rights or interests related to the matters covered by the Guidelines that are
or could be affected by adverse impacts associated with the enterprise’s operations, products or
services. Enterprises can prioritise the most severely impacted or potentially impacted stakeholders for
engagement. The degree of impact on stakeholders may inform the degree of engagement. Meaningful
stakeholder engagement refers to ongoing engagement with stakeholders that is two-way, conducted
in good faith by the participants on both sides and responsive to stakeholders’ views. To ensure
stakeholder engagement is meaningful and effective, it is important to ensure that it is timely,
accessible, appropriate and safe for stakeholders, and to identify and remove potential barriers to
engaging with stakeholders in positions of vulnerability or marginalisation. The OECD Due Diligence
Guidance for Responsible Business Conduct and relevant OECD sector specific guidance includes
practical support for enterprises on carrying out stakeholder engagement including as part of an
enterprise’s due diligence process. This engagement is particularly important in the planning and
decision-making concerning projects or other activities involving, for example, the intensive use of land
or water, which could significantly affect local communities.
Source: Taken from the Commentary on Chapter II: General Policies of the OECD Guidelines for Multinational Enterprises on Responsible
Business Conduct (OECD, 2023[16]), https://doi.org/10.1787/81f92357-en.
Stakeholder engagement in mineral supply chains will play a particularly important role in tailoring due
diligence due to the way environmental impacts in mineral supply chains may affect people. Extractive
industry activities can degrade soil quality and contribute to air and water pollution threatening resources
upon which people depend for subsistence. Besides directly engaging with stakeholders in connection with
an enterprise’s operations, enterprises further downstream, as part of their own due diligence of supplier
practices, could check to make sure stakeholder engagement takes place. When using stakeholder

 27
engagement as part of due diligence on environmental risks in mineral supply chains, enterprises should
be aware of the nexus that often exists between environmental impacts and other RBC impacts addressed
by the OECD Minerals Guidance like serious human rights abuses and corruption, with repression of
environmental human rights defenders and different forms of corruption sometimes used to suppress
community grievances or avoid accountability for environmental impacts.
When setting a policy on sourcing from small suppliers like ASM or associated small-scale processors,
traders and smelters/refiners, attention should be paid to the limitations they may face in implementing
corrective action plans in a timely and adequate manner. Consequently, policies still need to be set for
small suppliers, but more flexibility should be allowed, with increasing stringency as the capacity of the
supplier builds. For example, tailings management is important for ASM, but conformance with the Global
Industry Standard on Tailings Management (GISTM) may not be appropriate because of the limited
capacity of ASM suppliers and lower risks associated with smaller tonnages of tailings.22
Appropriate allocation of resources is critical for understanding to what extent an enterprise policy is fit for
purpose. Following consultation and policy finalisation, a budget and resourcing system could be
developed to support implementation, that could include:
• How the environmental and/or responsible sourcing management systems will be improved to
support delivery on the policy’s commitments,
• The parties responsible for policy implementation,
• How staff will be trained in the new policy and improved management systems,
• A communications and engagement plan defining how the policy will be communicated to
customers and suppliers, and what and when new obligations will be included in new and existing
contracts.
Finally, the monitoring of progress against RBC policy goals and specific targets and indicators under
Step 4 helps enterprises to understand if its policies and management systems are addressing prioritised
environmental risks and adverse impacts effectively. These type of feedback loops of lessons learned are
important for continually improving processes and outcomes over time.
1.3 What is the relationship between existing environmental management systems (EMS) and
environmental due diligence under OECD RBC standards?
Environmental management “involves carrying out risk-based due diligence with respect to adverse
environmental impacts”, in line with the MNE Guidelines. In the context of the Guidelines, the term
“environmental management” is interpreted in a broad sense, embodying “activities aimed at
understanding environmental impacts and risks, avoiding and addressing environmental impacts related
to an enterprise’s operations, products and services, taking into consideration the enterprise’s share of
cumulative impacts and continually seeking to improve an enterprise’s environmental performance”.
Improving environmental performance requires a commitment to a systematic approach and to continuous
improvement. An EMS provides the internal framework necessary to integrate environmental
considerations into business operations. Having such a system in place should help to assure
shareholders, workers, employees and communities and other relevant stakeholders that the enterprise is
actively working to protect the environment from the impact of its activities. Table 3 illustrates related
elements of an EMS (based on ISO 14001:2015) and corresponding due diligence under the MNE
Guidelines and RBC Guidance.
In practice, however, traditional environmental management systems may differ in scope and purpose from
the expectations set out under the MNE Guidelines. For example, they may be focused only on
environmental impacts associated with an enterprise’s direct operations, rather than also taking into

28 
account risks and impacts across its supply chain and business relationships. They can entail a
compliance-based approach against specific environmental targets rather than a risk-based approach
aimed at continuous improvement over time, and they may not sufficiently provide for meaningful
stakeholder engagement.
As such, enterprises can take into consideration existing environmental management systems as one tool
to support their due diligence whilst addressing gaps that may exist in existing systems as compared to
the risk-based due diligence process recommended by the MNE Guidelines. For downstream enterprises
this may entail evaluating the scope and relevance of suppliers’ environmental management systems and
layering on their own due diligence.
Table 3. Integrating EMS into broader RBC considerations

Relevant step of the OECD Due Diligence Corresponding elements of an Environmental Management System (based on
Framework ISO 14001:2015)
Step 1: Embed RBC into policies and management Ensuring leadership and commitment of an enterprise’s top management, determining an
systems environmental policy, organizational structures and processes for environmental
management
Ensuring necessary resources, competencies and adequate internal communication
Understanding the context in which an enterprise operates, including the needs and
expectations of its stakeholders and its legal requirements
Step 2: Identify and assess adverse impacts in Identifying, assessing and internally communicating the environmental aspects and
operations, supply chains and business relationships impacts and associated risks and opportunities
Understanding the context in which an enterprise operates, including the needs and
expectations of its stakeholders and its legal requirements
Step 3: Cease, prevent or mitigate adverse impacts Establishing environmental objectives
Planning and taking action
Step 4: Track implementation and results Tracking implementation by evaluation of environmental performance and compliance
Achieving continual improvement
Step 5: Communicate how impacts are addressed Ensuring adequate external communication about the EMS and its outcomes
Step 6: Provide for or cooperate in remediation when Address non-conformities and take corrective action.
appropriate and Step 3: Cease, prevent or mitigate
adverse impacts
Source: ISO 14001:2015 Environmental management systems – Requirements with guidance for use.
Step 2: Identify and assess actual and potential adverse impacts associated with
enterprise operations, products or services
What does the RBC Guidance say?
• Carry out a broad scoping exercise to identify all areas of the business, across its operations and
relationships, including in its supply chains, where RBC risks are most likely to be present and
most significant.
• Starting with the significant areas of risk identified above, map and carry out iterative and
increasingly in-depth assessments of prioritised operations, suppliers and other business
relationships in order to identify and assess specific actual and potential adverse RBC impacts.
• Assess the enterprise’s involvement with the actual or potential adverse impacts identified
to determine the appropriate responses. Specifically, assess whether the enterprise: caused,
contributed to or was directly linked to the impact by a business relationship (or would cause,
contribute to or be directly linked to a potential impact).

 29
• Drawing from the information obtained on actual and potential adverse impacts, where necessary,
prioritise the most significant RBC risks and impacts for action based on severity and
likelihood.
Key questions on how to integrate environmental risk considerations into this step:
• 2.1 What factors can an enterprise consider when scoping and prioritising environmental risks
and impacts in its supply chain?
• 2.2 What types of information sources and tools can enterprises use to conduct in-depth
assessments of prioritised suppliers on environmental risks and impacts?
• 2.3 What types of indicators may trigger enhanced due diligence?
• 2.4 What unique environmental risks and impacts can sourcing from secondary sources present?
• 2.5 When identifying and assessing climate impacts, what tools and resources are available for
businesses to assess GHG hotspots in the supply chain?
• 2.6 How can an enterprise assess ASM involvement with actual or potential adverse environmental
impacts?
• 2.7 How can an enterprise evaluate its involvement with identified environmental risks and
adverse impacts in the supply chain?
2.1 What factors can an enterprise consider when scoping and prioritising environmental risks and
impacts in its supply chain?
• Enterprises should carry out an initial high-level scoping exercise across their own operations and
business relationships to identify and prioritise the most severe and likely environmental risk areas,
taking into consideration sector, product, geographic and enterprise-level “risk factors”.23
• Enterprises are expected to gather information from a range of sources for the purposes of the
high-level scoping exercise, including information raised through early warning systems and
grievance mechanisms and through engagement with relevant stakeholders and experts. The
scoping should be updated with new information when the enterprise makes significant changes
(e.g. operating in or sourcing from a new country; developing a new product or service line;
engaging new forms of business relationship).
In the context of environmental impacts, some mining, smelting and refining processes have a greater
environmental footprint than others and some geographies and biophysical environments are more
sensitive than others. For example, businesses can consider the following factors:
Ecosystem type (terrestrial, marine and aquatic) and topography:
• Where operations are located in biodiverse areas, such as forests, wetlands or littoral zones,
heightened due diligence must be undertaken in relation to the risk of adverse environmental
impacts occurring. For example, an increasing number of exploration licenses in tropical and sub-
tropical forests has been observed, and a growth of mines in forest landscapes and in countries
with weak governance for managing mining/forests interactions is expected.
• While high biodiversity hotspots such as tropical forests deserve priority on the basis of biodiversity
protection, in the context of mitigating climate impacts, the mining of peatlands, wetlands,
grasslands and boreal forests is also highly destructive due to the carbon sequestration potential
of the soils in these biomes, notwithstanding their own unique biodiversity.
• Areas where there are surface water and groundwater resources that support important aquatic
ecosystems and/or human uses such as for drinking water and subsistence or other traditional
uses are also areas to note. Mining operations can impact water quality and quantity and the

30 
threshold for significant risks and impacts in areas of important aquatic and water resources may
be lower than at other locations.
• Moreover, where operations are located in areas prone to heavy rainfall, the impacts of seismic
activity on dams’ integrity may be more consequential, with resulting increased risk for damage to
physical operations (e.g. dam breaks resulting in uncontrolled acid and metalliferous drainage).
Type of mineral:
• Some mineral deposit types have intrinsically higher risk, due to high concentrations of radioactive
minerals, reactive minerals, acid generating minerals, metal leaching minerals or toxic elements
that can be more challenging to manage. Mining, processing, smelting and refining wastes from
these types of operations can pose a higher risk to people and nature during the operating life and
for long time periods following closure of operations.
• Increased risks are associated with the move to lower-grade ores, as they produce larger volumes
of waste and require more energy, water and chemicals for processing.
• Different commodities produce different environmental impact specificities. Some metals have high
specific impact (potentials), but only small impact in absolute terms due to lower volumes and mass
flows, while other metals (iron/steel) show high overall impacts mostly because of their larger
volumes and mass flows. More information can be found in the OECD’s Global Material Resources
Outlook to 2016 (OECD, 2019[17]).
Type of mining and processing:
• The techniques and chemicals used to process the raw material may determine the likelihood of
environmental risks and adverse impact. In general, refining and smelting tend to require high
amounts of energy, which in many cases come from fossil fuels, that generate GHG emissions.
Transport and handling tend to produce large amounts of dust, volatile organic compounds and
GHGs and generate noise emissions (Garbarino et al., 2021[18]). Mineral storage tends to raise
issues around safety (structural, physical and chemical stability), can produce emissions to soil,
water and air (to a lesser extent), and have an impact on habitats.
• Open pit mining may result in more land surface and air (dust) impacts than underground mining
since the open pit land area and waste rock disposal areas take up more space as compared to
underground mining. However, both underground and open pit mining can result in impacts to both
water quality and quantity. Dewatering may be necessary during mine operations to keep mine
workings dry and safe for miners, but this can impact water availability. Precipitation and runoff on
and over mined surfaces and mining and processing wastes can result in mobilization of metals
into adjacent lands, groundwater, and surface waters at both underground and open pit mines.
Tailings impoundments can be a risk at many operations.
Identifying categories of materials, processes and ecosystems that may increase the severity and
likelihood of environmental risks and impacts as part of an initial scoping exercise can provide indicators
that inform a risk-based approach and enable the enterprise to carry out an initial prioritisation of the most
significant risk areas for further assessment. Based on the prioritised risk issues, an enterprise can select
individual higher-risk operations and business relationships for in-depth mapping and risk assessments to
identify specific site-level risks and adverse impacts.
Moreover, risks and impacts can occur during and following mine closure. For example, some operations
may have tailings dams and impoundments that must be monitored and maintained far into the future to
ensure stability and prevent leakage, potential pollution and failures. Some operations require long-term
water management and monitoring since runoff and seepage that contact mine waste, tailings, pit and
underground mine walls can remain a risk and potential source of impacts long after the mine closes. Post-
closure environmental impacts can be as or more significant than risks during the mining operation itself if
closure activities have not been implemented properly. In addition, there might be a higher probability that

 31
mitigation measures are not maintained or fail if the mining operator is no longer actively at the site and
generating income to fund post-closure monitoring and maintenance.
2.2 What types of information sources and tools can enterprises use to conduct in-depth assessments
of prioritised suppliers on environmental risks and impacts?
• Enterprises are expected to carry out proportionate and risk-based assessments of prioritised
suppliers to identify and assess specific environmental impacts. For most types of risks,
assessments will broadly cover:
‒ Actual or potential adverse impacts caused or contributed to by the supplier, including those
associated with future projects or activities
‒ The capacity and willingness of suppliers to carry out due diligence
‒ The adequacy of the due diligence carried out, including measures to prevent, mitigate and
remediate relevant environmental risks and impacts (Steps 3 and 6).
• Seek to collect sufficient information to assess the nature and extent of actual and potential impacts
linked to prioritised suppliers and identify information gaps or blind spots. They have a range of
tools and sources of information at their disposal to evaluate different types of environmental risks
and impacts (see Table 4).
• The type of assessment and information sources that are appropriate in a specific context will
depend, among other things, on the nature of the environmental risk, its severity and likelihood,
where in the supply chain the risk is situated, and the position in the supply chain of each entity
with a relationship to the risk or impact.
For example, where risks are situated in the furthest upstream segments of the supply chain, at or close
to the point of extraction, downstream enterprises should obtain, when appropriate and feasible,
information about business relationships beyond contractual suppliers and establish processes to assess
the risk profile of more remote tiers of the supply chain. This can be done individually or collaboratively
and can include reviewing existing supplier audits or other assessments, engaging with relevant mid-
stream actors and/or control points (such as smelters, refiners and international concentrate traders) in the
supply chain to assess the quality of their due diligence (see Figure 1), and consulting with relevant
stakeholders.
The emphasis for downstream enterprises’ risk assessments in such a situation will generally be on
assessing and improving the due diligence management systems of control points who tend to have
greater visibility and leverage over other upstream segments. Alternatively, if a risk or adverse impact is
situated at the control point itself, downstream enterprises’ risk assessments may focus on the control
points’ own mitigation, prevention and remediation activities.
Table 4. Examples of indicators and sources of information for identifying and assessing key environmental
risks in upstream supply chains lists some examples of generic sources of information for evaluating
environmental risk or impact categories against possible indicators; Annex B provides more detail with
examples of the types of organisations, tools and online resources.
Table 4. Examples of indicators and sources of information for identifying and assessing key
environmental risks in upstream supply chains
Environmental issues Potential data and Indicators Non exhaustive list of potential sources of information
and helpful tools
Biodiversity loss Area taken up by operations EMS
(e.g. deforestation, coral Species at risk Environmental and social impact assessments (ESIAs),
reef degradation, species including biodiversity management plans, biodiversity

32 
and helpful tools
loss) and damage to Measures of ecosystem health using biomonitoring action plans, mine closure plans and biodiversity offset
protected areas data plans
Ecosystem services impacted Academic, industry and non-governmental organisation
Proximity to key biodiversity areas (NGO) studies
Destroyed area of valuable habitats Ongoing monitoring data from government or the supplier
Disturbance of wildlife Environmental and water management programme reports
Area deforested from government or the supplier
% of key biodiversity areas that may be impacted by National / regional guidelines and assessments on
operations biodiversity assets and natural capital
Information on physical hazards and toxicity from Earth observation tools and software
materials to human health and the environment International bodies such as the Convention on Biological
during the handling, transport and use of these Diversity (CBD) may have additional data available for
materials. certain regions.
Climate change (e.g. GHG Scope 1, 2 and 3 GHG emissions The entity’s net-zero transition plan
emissions , failure to adapt Alignment with relevant targets and transition The entity’s climate change adaptation plan
to physical risks of climate pathways Sources of information related to the credibility of net-zero
change) transition plans including e.g. Race to Zero Criteria,
UNHLEG Integrity Matters report
EMS
ESIAs
Environmental and Social Management Programmes
(ESMPs)
Life Cycle Assessments (LCAs)
GHG reporting frameworks
Academic, industry and NGO studies and expert
engagement
Compliance with GHG emission standards
Carbon Disclosure Project data
Improper use and disposal Amount and types of hazardous materials used EMS
of hazardous materials Quantity of hazardous materials released into air or ESIAs
water sources ESMPs
Information on physical hazards and toxicity from LCAs
materials to human health and the environment Academic, industry and NGO studies
during the handling, transport and use of these Safety Data Sheets
materials
Noise and vibration Intensity and frequency of noise generated ESIAs
Intensity and frequency of vibrations EMS
ESMPs
Community monitoring systems
Academic, industry and NGO studies
Physical instability, soil Number and frequency of tailings storage facility Feasibility stabilities
erosion and land breaches Geotechnical studies
degradation Number and frequency of slope failures Slope monitoring data
Volume of potentially unstable material Earthquake risk assessment
Earthquake risk Earthquake monitoring data
Data on soil quality EMS
ESIAs
ESMPs
Geotechnical studies
Participatory stakeholder monitoring
Pollution (air, water etc) Air emissions (excluding GHGs) – amount and types EMS
Type and quantity of pollutants discharged ESIAs
Number of people living in the local area (watershed, ESMPs
airshed) LCAs
Number of people dependent on local freshwater for Central and regional government monitoring networks
domestic use Academic, industry and NGO studies
Safety Data Sheets
Census information for the local area

 33
and helpful tools
Number of people dependent on local environment Socioeconomic and ecosystem services baseline studies
(e.g. rivers, lakes, forests and biodiversity) for food Participatory stakeholder monitoring
security and nutrition
Number or people afflicted with pollution related
illnesses
Information on physical hazards and toxicity from
materials to human health and the environment
during the handling, transport and use of these
materials.
Damage to aesthetics and Area taken up by operations ESIAs
cultural heritage sites Number of complaints about impacts on cultural ESMPs
heritage sites or visual aesthetics Academic, industry and NGO studies
Waste mismanagement Waste generated (amount and type) EMS
Waste management system ESIAs
% of tailings with liners in place to minimise seepage ESMPs
Type of seepage management design implemented LCAs
% of tailings storage facilities with closure cover Academic, industry and NGO studies
% of waste rock dumps with closure covers, where Safety Data Sheets
required
Information on physical hazards and toxicity from
materials to human health and the environment
during the handling, transport and use of these
materials.
Water depletion Water use Hydrology studies and models
Data on water scarcity EMS
Water shed balance incl. other uses ESIAs conducted in the area,
Surface water streamflow ESMPs
Groundwater level Academic, industry and NGO studies
Proximity to other mines Community monitoring systems
Water shed balances LCAs
Water Footprint (ISO 14046) Reports on water depletion, impacts on water availability for
users
Note: This table corresponds to the table on environmental risks in Chapter 2 of this Handbook.
Other sources and types of information that enterprises may find relevant when evaluating environmental
risks associated with suppliers include:
• Details of relevant supplier’s RBC policies, business and sourcing models with specific
regard to prioritised environmental risk issues
• Details of existing EMS, including whether they have been verified by an independent third party.
• Details of existing ESIAs, including whether undertaken by an independent party and the extent
of engagement with local communities during research, drafting and finalisation, and other
environmental assessments, permits authorisations and permissions (see Box 4).
• Early warning systems established by suppliers, to identify and prevent environmental impacts.
These include four key elements: risk knowledge, monitoring and warning system, communication
and dissemination of warnings, and supplier response capability (UNISDR, 2008[19]).
• Details on suppliers’ strategies to address environmental impacts, for example,
improvements in efficiency (use of appropriate equipment, process optimizations, etc.), renewable
energy deployment (on-site energy storage, electrification of vehicle fleet, etc.), energy intensity
reduction and neutralization.
• Locations of relevant operations and concession areas, including exposure to extreme natural
events, water stress, proximity to sensitive areas such as water sources, protected areas and other
high value biodiversity areas and natural resources and human settlements. World Resources

34 
Institute’s (WRI) Aqueduct Water Risk Atlas (World Resources Institute, 2021[20]) as well as
Integrated Biodiversity Assessment Tool Alliance tools (IBAT Alliance, n.d.[21]) are available to
determine water stress and biodiversity risk.
• Information on land clearance and restoration (as % of total asset / concession land size)
including deforestation and reforestation (as % of total asset / concession land size).
• Closure plans, covering decommissioning, social closure plans and site rehabilitation and
financial provisions for this purpose.
Box 5. Environmental and Social Impact Assessments (ESIAs)

In most jurisdictions a supplier whose activities give rise to significant risks and impacts (such as a
mining operator) will be required to conduct an ESIA. ESIAs generally take into consideration the
sensitivity, quality, and values associated with the biophysical, cultural and social environment should
a risk occur, and the capacity of the receiving environment and populations to cope with resulting
impacts. It should also consider the extent (geographic extent/distance, magnitude, intensity, duration)
and likely consequence of impacts arising from the risk (IAIA, n.d.[22])
In addition to be being part of due diligence, the content of an ESIA can be a source of information used
in due diligence processes. However, the specific content will vary from one jurisdiction to another and
depend on the nature of the proposed operation being assessed. The quality and credibility of the ESIA
can vary according to, for example independence of the assessor or expert team, credibility, rigor and
depth of information provided, level and quality of stakeholder engagement, and level of transparency,
among other factors. Where doubts arise about the quality or independence of an ESIA, the enterprise
should not rely on information in the ESIA for its due diligence process.
Downstream enterprises can furthermore consider gathering information for example through:
• Information raised through supply chain grievance mechanisms and other monitoring
platforms, including to evaluate the effectiveness of operational level grievance-mechanisms.
• Meaningful engagement with relevant stakeholders and/or experts, including stakeholders
affected (or potentially affected) by adverse environmental impacts associated with the enterprise’s
operations, products or services, or their legitimate representatives.
• On-site inspections or assessments, where possible, at prioritised suppliers (including with a
local expert to build an understanding of the supplier, its activities and production and due diligence
processes).24
• Existing assessments of prioritised suppliers, for example by multi-stakeholder, industry or
government-run initiatives (“sustainability initiatives”’) (such as ISO14001 audits or assessments
by the Copper Mark, Initiative for Responsible Mining Assurance (IRMA), Towards Sustainable
Mining (TSM), Responsible Jewellery Council (RJC), International Council on Mining and Metals
(ICMM), World Gold Council (WGC), Responsible Steel, Aluminium Stewardship Initiative (ASI),
the International Tin Association’s Tin Code), and the Environmental Social Guidance Standard for
Mineral Supply Chains of the Responsible Minerals Initiative/Responsible Business Alliance.
• Other collaborative approaches with industry actors, for example in sensitive landscapes that
host significant production of a specific mineral category, enterprises can cooperate and jointly
finance a Strategic Environmental Assessment at the level of the landscape (to be defined by
relevant stakeholders) as opposed to specific operations (European Union, 2021[23]), to achieve
economies of scale, identify cumulative impacts and priority issues to inform their sourcing
strategies, and cooperate in reducing the severity or likelihood of certain risks arising (see Box 3
for an example of collaborative approaches to assessing environmental risks). This could be done

 35
for example through an industry platform or multistakeholder initiative such as the Responsible
Mineral Initiative (industry-led) or the European Partnership for Responsible Minerals and the
Public Private Alliance for Responsible Minerals (multi-stakeholder).
• Supplier reporting and disclosures, for example, sustainability reports, climate and biodiversity
disclosures (See Annex B) or in industry benchmarking initiatives such as those established by
third-parties, as well as credible public reports. Earth observation tools or other geospatial data
providers can be used to monitor observable changes in the landscape around a supplier’s
operations, if relevant.25
• Checking for issues prevalent in the region or area where a supply chain actor operates (for
example, if a supplier operates in a region where several spillages have taken place as a result of
shipping incidents, which caused damage to marine ecosystems, and the integrity of local transport
and logistics within the supply chain can be checked).
Importantly, enterprises retain ultimate responsibility for their own due diligence under international
standards. If using findings or other information from an industry, government-run or multi-stakeholder
initiative to support their due diligence, enterprises should review the information to ensure that it is
credible, relevant and up-to-date.26
Information blind spots
Enterprises, particularly those at greater remove or separated by several tiers in the supply chain from
where the risk or adverse impact is situated, will naturally identify areas where they lack information or
independent data to assess environmental risks. In some cases, it may not be possible to gather the
necessary information and in others, an enterprise may not have the right expertise to know which
questions to ask or where to look. Another example of blind spots is information on issues that have not
yet manifested, for example, environmental impacts that may take place after a mine or smelting plant
closure.
In these cases and depending on context, engagement with joint buyers or other relevant suppliers,
intermediaries and stakeholders can be particularly important (e.g. relevant local NGOs, workers or their
representatives or other impacted or potentially impacted stakeholders). For example, engagement with
traders is important for gathering information on risks associated with transport and logistics activities,
which often receive limited attention and where environmental impacts can be significant. Efforts to
increase leverage over relevant suppliers or control points can also be important where enterprises lack
necessary information (see discussion on Step 3 below).
2.3 What types of conditions may trigger enhanced due diligence?
Indicators of potentially high risk can be relevant to the risk scoping and assessment process under Step
2 and trigger enhanced due diligence efforts. Table 5 sets out illustrative, non-exhaustive examples of
conditions related to mining, processing, smelting, recycling or refining activities which enterprises may
warrant enhanced due diligence, depending on the context and the outcomes of their Step 2 scoping
exercise.
Table 5. Illustrative examples of conditions related to mining, processing, smelting, recycling or

refining activities (according to risk type) that may warrant enhanced due diligence
Type of environmental
Illustrative examples of conditions that may warrant enhanced due diligence
risk
Biodiversity loss • Operation in or close to World Heritage Sites.
(e.g. deforestation, coral reef • Operation in or close to sensitive, highly valued, protected locations, such as areas of High Conservation
degradation, species loss) Value, biodiversity hot spots, International Union for Conservation of Nature (IUCN) Protected Areas

36 
risk
and damage to protected categories I-IV, Ramsar sites, primary rainforest, United Nations Educational, Scientific and Cultural
areas Organization (UNESCO) Biosphere Reserves, and other effective area-based conservation units.
• Operation in or close to critical habitat as defined by International Finance Corporation (IFC) Performance
Standard 6 (PS6).
• Losses of significant biodiversity within the direct and indirect footprint of the activities (as defined by IFC
Performance Standards 1 (PS1) and 6 (PS6).
• Deforestation or mining activities in forested areas.
• Deep-sea or marine mining that is unregulated by the International Seabed Authority or relevant national
authorities, or where credible studies demonstrate irreversible damage to the marine environment may or
will occur within and/or beyond the mining boundary.
Climate change (e.g. GHG • Operation damaging carbon sinks such as high carbon stock forests or peatlands.
emissions , failure to adapt • Operation relies solely/heavily on fossil fuels for its energy needs.
to physical risks of climate • Operation failing to establish and implement a decarbonisation plan and adopt, implement, monitor and
change) report on short, medium and long-term mitigation targets aligned with internationally agreed global
temperature goals.
• Operation leading to lock-in of carbon intensive assets.
• Operation failing to establish and implement a climate change adaptation plan to prepare and respond to
current and future climate change impacts.
Improper use and disposal • Operation using mercury in the recovery of gold.
of hazardous materials • Operation is using cyanide in the recovery of gold outside of the recognised management regime of the
International Cyanide Management Code.
• Inappropriate recycling and processing of used lead-acid batteries and other lead scrap that results in
environmental damage.
Noise and vibration • Wildlife migrating from an area near a mine site due to noise.
• Local communities being severely impacted by noise.
Physical instability, soil • Open pit slope and waste rock dump failure.
erosion and land • Rock bursts, subsidence and sinkhole development.
degradation • Tailings storage facility failure.
• Slag dump failure.
• Loss of soil as a resource through erosion and degradation of soil quality.
Pollution (air, water, soil) • Operation has resulted in pollution requiring treatment in perpetuity.
• Emissions from smelting and refining are not captured and treated.
• Acid metalliferous drainage or the discharge of warm cooling water from smelter operations causing rapid
thermal changes in the receiving environment.
• Uncontrolled releases of sediments and process chemicals, such as mercury from artisanal mine workings,
into surface or ground waters.
• Emissions of sulphur dioxide from roasting sulphide concentrates in base metal smelters, fluoride from
aluminium smelters, polychlorinated dibenzodioxins especially from copper or iron ore sinter plants or
arsenic, lead, cadmium and mercury from smelters that are associated with adverse impacts on land and
soil quality and ecosystem and human health.
• Dioxins and furans from open burning of plastic-coated metal-containing products, such as building wire.
• Soil contamination near mining, refining and smelting from emissions deposition or waste disposal.
Destruction of cultural • Operation will irreversibly damage or degrade cultural or sacred heritage sites, including World Heritage
heritage sites and damage Sites.
to aesthetics • Operation that may temporarily cause adverse impacts on sacred sites or constrain access to such sites.
• Operation has impaired local community’s ability to enjoy and benefit from their environment.
Waste mismanagement • Mining, mineral processing, smelting and refining generating large amounts of hazardous and non-
hazardous waste that is not safely disposed of (as well as marketable by-products such as slags). For
example, operation is disposing tailings into river, lake or coastal waters.
Water depletion • Operations takes place within arid and water scarce regions.
• Operations that may deteriorate water quality, degrade or constrain access to natural resources, particularly
those used by Indigenous Peoples or local communities.
• Reduced access to clean water for local communities.
• Credible and independent studies demonstrate water consumption is unsustainable regarding quality or
quantity or limiting access to adequate water for other water users.
• Rerouting of surface waters to generate hydropower in remote locations where grid electricity is not
available, resulting in reduced access to clean water for local communities.

 37
risk
Other • Operator does not have a closure and reclamation plan for its facilities (mainly relevant to mines), with
financial guarantees or the plan is out of date relative to current activities.
• Persistent and egregious non-compliance with national laws and regulations related to environmental
management and performance outcomes (reputation as a serial polluter).
• Indication of corruption related to environmental management and performance outcomes.
• Ongoing or unresolved serious human rights violations (including those mediated through environmental
impacts) related to the supplier’s business activities, including against Indigenous Peoples and
environmental and human rights defenders.
• Lack of, or poor quality / poorly accessible, disclosure on environmental incidents and impacts.
• Evidence of Greenwashing by the operator.
• No disclosure of environmental impact assessment findings and recommendations.
• Potential impacts on Indigenous Peoples.
• Lack of meaningful engagement with communities.
• Lack of consent from Indigenous Peoples or communities for involuntary resettlement from their traditional
lands and natural resources.
1. Enterprises operating at the boundaries of protected locations, or that have protected areas within their zone of influence, can have huge
impacts on protected areas, and thus may also warrant enhanced due diligence.
2. See Annex II of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
(OECD, 2016[24]) for more detailed information on serious human rights abuses.
2.4 What unique environmental risks and impacts can sourcing secondary sources present?
While they offer the opportunity to avoid environmental harms linked to mining and mineral processing,
secondary materials are not free of risks and adverse impacts and present unique challenges when
conducting supply chain due diligence. For example, adverse impacts on people and nature have been
documented for lead acid battery recycling (Lead Recycling Africa Project, 2016[25]) and electronics
recycling (UNEP, 2022[26]; UNEP, n.d.[27]).
Risks associated with poorly managed recycling include:
• Contamination of air, soil and water, related human health impacts and bioaccumulation of heavy
metals in food chains.
• Exposure of workers to hazardous materials and related health impacts.
• Incomplete recovery and removal of hazardous substances during recycling, leading to
contamination of products made from the recycled feedstock.
• Additional land usage and occupation by (informal) landfills for remnants of incomplete recycled
initial products.
Special care is necessary when sourcing secondary materials from opaque supply chains i.e. when the
source of the secondary material is uncertain. For some metals, such as gold, if the recycled metal is not
subjected to due diligence, it can enable the laundering of materials mined in a harmful and illicit manner,
including those contributing to serious environmental issues, as well as conflict and human rights
violations. Enterprises sourcing recycled metal can, as a first step, verify the material is indeed recycled,
and not partially processed mined material being passed off as recycled.
The next step is to understand the risk profile of different minerals (e.g. what chemicals are used for
extraction, what emissions are caused through the recycling process, are they commonly processed
together with other materials that may cause environmental damage). As part of a risk-based approach,
enterprises may also need to determine where the recycling takes place, as location can significantly
influence risks. Enterprises should complete a broad risk assessment of the recycler’s sources of supply,
identify any conditions that may warrant enhanced due diligence if/where necessary. In many cases the

38 
adverse impacts of secondary materials might be blind-spots, and enterprises might need to tailor their
due diligence approach to identify those blind-spots and consider how to tackle them (see answer to
question 2.2 on types of information sources and tools can enterprises use to conduct in-depth
assessments of prioritised suppliers on environmental risks and impacts?).
2.5 When identifying and assessing climate impacts, what tools and resources are available for
businesses to assess GHG hotspots in the supply chain?
Risk-based identification and assessment of emissions is the first and most crucial step towards emission
reduction target setting and GHG mitigation. The GHG Protocol classifies an enterprise’s emissions into
three scopes:
• ‘Scope 1’ – direct GHG emissions that are from sources owned or controlled by the reporting entity,
such as those emissions from the production and transportation equipment owned by the entity.
• ‘Scope 2’ – indirect GHG emissions associated with the production of electricity, heat, or steam
purchased by the reporting entity.
• ‘Scope 3’ – all other indirect emissions (for example, associated with the production of purchased
materials, fuels, and services, including transport in vehicles not owned or controlled by the
reporting entity, outsourced activities).
Enterprises should assess their Scope 1, 2 and, to the extent possible based on best available information,
scope 3 GHG emissions in order to identify where their most severe and likely impacts lie. Upstream
enterprise emissions primarily fall under Scope 3 and in many cases, the crushing of ore as well as the
chemical processing stage of mineral supply chains (i.e. refining and smelting) is a hotspot for GHG
emissions based on their sources of energy and chemicals usage. It is important to assess emissions
against the latest available scientific evidence and as different national or industry specific transition
pathways are developed and updated. It is crucial to collect information on emissions from upstream
suppliers so this can be integrated into the Scope 3 assessment.
Useful frameworks for corporate GHG accounting are the GHG Protocol, Responsible Steel GHG
Standard, and the EU Environmental Footprint Method. Other useful frameworks to identify the carbon
footprint of products (rather than of an enterprise) include the Global Battery Alliance’s Battery Passport
GHG Rulebook (under development), the International Zinc Association Carbon Footprint Guidance for
Zinc Production (under development), RE100 Technical Criteria, GHG Protocol Scope 2 Guidance and
ISO 14040, 14044, and 14067.
2.6 How to assess ASM involvement with actual or potential adverse environmental impacts?
When sourcing from ASM, the following questions may provide a useful framework for approaching
environmental risk assessments on prioritised environmental issues. To answer the following questions,
an enterprise may wish to work in collaboration with other actors who are also sourcing directly or indirectly
from the region. As mentioned at the top of this Chapter, the relevance of these questions will vary
according to the enterprise’s position in the supply chain and its involvement with the risk in question. See
also Figure 1.
General risk profile:
• What is ASM mining? How does production work? Is any part of the process mechanised?
• How risk-aware are the owners, leaders, workers? How and how well are the miners already
controlling risk? What incentives exist already for them to manage and minimise risk? What are

 39
the barriers to controlling risk (generally and specifically environmental risks)? What would need to
change to improve that?
• Is the organisation part of any sustainable development, government or community programme to
tackle environmental or human rights issues, or supported by any local support organisations?
• What would happen to the miners and their families if they could not mine or sell their product into
formal supply chains? What else could/would they do and what would be the impact of those
activities?
Environmental impacts:
• Where is the mining happening? What is the ecological sensitivity of this location? What is its
conservation status?
• How is the mining and any processing done and how is waste managed? Are explosives, fuel and
chemicals used?
• Is there a Safety Data Sheet for the material?27 Is the Safety Data Sheet up to date (not older than
5 years)?
• Where and how do miners live while they are mining? Consider impacts of housing, subsistence,
transportation between home and mine, for example miners’ reliance on wild meat or bush meat
for protein, timbering for struts and tools etc.
• How does the miners’ presence stimulate others to act in ways that impact on the ecosystem?
Economic stimulus through raising awareness of or access to previously remote places, for
example agriculturalists, hunters, lumberjacks use footpaths to penetrate wilderness and exploit
natural resources, etc.
• How is the material transported to customers? Are there any organisms or environments
(receptors) that could be negatively affected by the material or its transportation?
Where environmental impacts are cumulative in nature:
• Is there a bioaccumulation risk28 or a chronic toxicity effect29 indicated on the Safety Data Sheet
for the material?
• How many other ASM organisations operate in the area?
• What is the overall ASM population in the area?
• If possible to determine over time, what capacity does your supplier have to meet due diligence
expectations (for example, in terms of organisational competence, environmental awareness,
nature of adverse impacts, quality of risk management)?
• What other economic activities exist that may extend, deepen or magnify your supplier’s direct and
indirect impacts?
• What relationships exist between your supplier and these other actors that could be leveraged to
organise a more landscape level approach to risk management? 30 What relationships exist
between you and other stakeholders to explore collective leverage to tackle issues at the landscape
level?
Mine closure and post-mining: 31
• What are the legal requirements and to what extent are these enforced?
• What plan – if any – is in place to avoid damage to the land as a result of post-closure ASM? What
approach is being used or will be used to rehabilitate or restore lands degraded by ASM? Who
holds responsibility for this and how realistic is it that closure will be done at all or well? Is this
approach economically affordable, socially acceptable and ecologically viable?

40 
• Who holds responsibilities in active mine closure? And in post-closure monitoring and
maintenance? How are miners, landowners, communities and local authorities involved in closure
and post-mining phases?
• What is the planned end purpose for the closed land (for example forestry, agriculture, natural
forest, etc.)? How does this account for economic, social and environmental sustainability,
including contributions to helping nature thrive either directly or indirectly?
Step 3: Cease, prevent, and mitigate adverse impacts
• Stop (cease) activities that are causing or contributing to adverse environmental impacts.
• Develop and implement plans to prevent or mitigate actual or potential adverse environmental
impacts.
• Appropriate responses to risks and impacts associated with business relationships can include:
o build and use leverage, to the extent possible, to prompt the business relationship(s) to prevent
or mitigate adverse impacts or risks;
o continuation of the relationship throughout the course of risk mitigation efforts;
o temporary suspension of the relationship while pursuing ongoing risk mitigation; or
o disengagement with the business relationship either after failed attempts at preventing or
mitigating severe impacts, when adverse impacts are irremediable, where there is no
reasonable prospect of change, or when severe impacts or risks are identified and the entity
causing the impact does not take immediate action to prevent or mitigate. Critically,
disengagement is a measure of last resort. A decision to disengage should consider the
potential adverse social and economic impacts of disengaging and be done responsibly.32
What additional mineral-specific recommendations are in the Minerals Guidance?
• FOR UPSTREAM: Identify and track which suppliers respond to information requests and which
do not. Follow up with suppliers and set corrective action plans. Escalate uncooperative suppliers
to senior management.
• FOR DOWNSTREAM: If the point of transformation for the mineral cannot be identified, adopt a
risk management plan to be able to eventually demonstrate significant measurable improvements
to your efforts to do so. If the point of transformation can be identified, work with suppliers to
establish measurable risk-mitigation actions intended to promote progressive performance
improvement within a reasonable timescale.
• 3.1 How can an enterprise evaluate its involvement with identified environmental risks and adverse
impacts in the supply chain?
• 3.2 What actions can enterprises take to address identified harms in the supply chain? How can
enterprises use their leverage?
• 3.3 What types of prevention and mitigation measures can enterprises reasonably expect of
suppliers that are causing or contributing to significant environmental impacts?
• 3.4 How does the interaction between environment and human rights affect enterprise action to
cease, prevent, and mitigate adverse environmental impacts?

 41
3.1 How can an enterprise evaluate its involvement with identified environmental risks and adverse
impacts in the supply chain?
An entity’s involvement or relationship to impacts in the supply chain is important because it establishes
where the primary responsibility for addressing the impact lies, and how the enterprise is expected to
respond (see Figure 4). An enterprise’s relationship to adverse impacts is not static. It may change, for
example as situations evolve and depending on the degree to which due diligence and steps taken to
address identified risks and impacts decrease the risk of the impacts occurring. See discussion of Step 3
below.
Figure 4. Addressing adverse impacts
Source: OECD (2018[15]), OECD Due Diligence Guidance for Responsible Business Conduct, https://mneguidelines.oecd.org/OECD-
Due-Diligence-Guidance-for-Responsible-Business-Conduct.pdf.
An enterprise “causes” an adverse environmental impact if its activities on their own are sufficient to result
in the adverse impact. An enterprise “contributes to” an adverse environmental impact if its activities, in
combination with the activities of other entities cause the impact, or if the activities of the enterprise cause,
facilitate or incentivise another entity to cause an adverse impact. Adverse environmental impacts can also
be directly linked to an enterprise’s business operations, products or services by a business relationship,
even if they do not contribute to those impacts.
3.2 What actions can enterprises take to address identified harms in the supply chain? How can
enterprises use their leverage?
The risk-based due diligence approach is again integral to implementing Step 3. As it will often not be
possible for enterprises to identify or respond to all identified risks and adverse impacts associated with
their suppliers simultaneously, enterprises can prioritise specific risks and impacts for action on the basis
of severity33 and likelihood. They should move on to address less severe impacts once prioritised impacts

42 
have been addressed. The same principles apply to how their suppliers should in turn prioritise risks and
impacts for action.
As mentioned in Step 2, the enterprise’s relationship to an identified risk or impact determines the
responsibility it has for addressing the impact. For example, where enterprises identify that they are
causing or contributing to (or may cause or contribute to) environmental risks or impacts, they face
heightened responsibilities, including to cease the activity contributing to harm and to provide remediation
under Step 6 (see Figure 4). They are also expected to adopt prevention and mitigation measures,
including through using and building leverage over other entities causing harm. Where enterprises identify
that they are directly linked to an impact, they are expected to seek to prevent and mitigate impacts,
including through using and building leverage (see also “What does the RBC Guidance say”, above).
Using leverage of suppliers is broadly understood and captures incentivising, supporting and otherwise
effecting change in the behaviour of a business relationship (or other entity causing harm). How an
enterprise chooses to support, incentivise or otherwise apply leverage over an individual business
relationship will depend on the context –including the nature of its relationship, the degree of leverage it
has, the nature of the risk or impact, and the supplier’s capacity to prevent, mitigate or remediate the
impact.
Enterprises can consider adapting purchasing practices and business models or using leverage over their
suppliers in a number of ways, for example by:
• Using enterprise policies or codes of conduct, contracts, written agreements or market
power. Building expectations around RBC and due diligence specifically into commercial contracts
and linking business incentives – such as the commitment to long-term contracts and future orders
– with performance on RBC. Clearly communicating the consequences if expectations around RBC
are not respected (e.g. through meeting with management of the business relationship).
• Supporting or collaborating with suppliers in developing fit-for-purpose plans for them to
prevent or mitigate adverse environmental impacts (for example, net zero transition plans). In
instances where suppliers may require guidance, capacity building or support on how to manage
risks and prevent impacts occurring and address barriers or challenges, enterprises may support
suppliers in reviewing the environmental risk controls in place, identifying gaps, and putting in place
a corrective action plan. Suppliers may also require support and guidance on how to identify
whether or not harm has occurred or may be imminent.
• Supporting suppliers in the prevention or mitigation of adverse impacts or risks, e.g. through
training, upgrading of facilities, or strengthening of their management systems: When sourcing
from ASM, enterprises can work in partnership with the ASM cooperative or a specialist NGO that
facilitates ASM cooperation, community representatives, local government, or multi-stakeholder
ASM initiatives to support the ASM entity better manage its environmental corrective action plans.
A helpful resource for ASM formalisation is the Code of Risk-mitigation for artisanal and small-
scale mining engaging in Formal Trade (CRAFT Code), which is an open source tool for ASM and
businesses potentially sourcing from the sector that sets progressive requirements for ASM.
Ensuring that prevention and mitigation activities are appropriate requires collaboration with local
stakeholders. To support the more systemic prevention and mitigation of environmental impacts
over the long term, enterprises in the supply chain can play an important role in supporting the
empowerment of local environmental NGOs and civil society organisations that work in
collaboration with government and business, as well as local enforcement authorities.
• Redesigning products to enable the substitution of materials or the use of secondary
materials. Some minerals are substitutable within a product. Downstream enterprises may wish to
make product design decisions based upon the relative environmental performance across
candidate materials, such as the relative carbon footprint, water footprint, dependency on mining
in forests or sensitive ecosystems, the toxicity of wastes and the efficiency of production. A full

 43
lifecycle analysis (cradle to grave) can support enterprises when making material substitution
decisions, which can affect environmental performance of the product in its use and end-of-life
phases.
• Supply chain and public-private partnerships are one way large and small enterprises can work
together to generate leverage, pool resources and conduct more efficient due diligence, especially
when they do this visibly and with the ambition of leading the sector. For example, the Dutch Metals
Agreement uses individual risk assessments of businesses to produce a collective heat-map
showing industry risks (SER, n.d.[28]). These individual business risk assessments are submitted to
the Secretariat of the Agreement which aggregates and anonymizes information to produce the
heat map.
• Other types of multi-stakeholder, industry-led and government-run initiatives can be a tool
for enhancing collaboration across diverse industry players and their stakeholders, including by
making joint statements to raise awareness about specific environmental concerns. Using a
collective voice can also be helpful in co-creating solutions that can make environmental due
diligence more feasible, more effective and thus more likely. There are also many industry
initiatives that aim to develop global programs to assess, audit and improve sustainability practices
within the industry’s supply chains.
There may be considerable variability in the capacity of enterprises to apply their leverage over suppliers
and, in turn, the capacity of their suppliers to use their leverage over their sub-suppliers. Where an
enterprise lacks leverage, it is expected to increase its leverage where possible, for example through
modifying commercial incentives, engaging with industry peers, establishing longer-term relationships with
suppliers or participating in collaborative industry, multi-stakeholder or government-run initiatives.
When sourcing from large refiners, smelters, recyclers or miners, downstream enterprises and control
points like smelters or refiners may pay particular attention to the capacities, influence and resources the
supplier may have to implement corrective actions and use their market leverage accordingly.
Understanding if the supplier is participating in or assessed by industry or multi-stakeholder initiatives, for
example, can orient the buyer on what influence may be exerted on the one hand (loss of market access
through membership status) and what other resources or support may be available through the association
(member services). As well as setting standards for enterprises, many initiatives offer tools, training or
peer-to-peer learning opportunities for members and suppliers on specific challenges.
Box 6. Understanding and complying with a growing body of legislation that supports the
Rights of Nature
Ecosystem services34 tend to be more protected by law than the intrinsic values of nature that are
independent of human uses. However, jurisdictions are increasingly protecting the value of nature
through ‘rights for nature’ laws (UN, 2022[29]) and a growing number of national and subnational
governments and their courts have recognised legal personality of nature in recent years.
If a supplier is sourcing from a jurisdiction which acknowledges the rights of nature, work with the
supplier to identify what additional risk management processes they have had to adopt to fulfil their
responsibilities in this regard. If a supplier is not sourcing from a provenance that has afforded rights to
nature, determine whether it would align with your business’ values to encourage suppliers to introduce
measures that go beyond the consideration of how harm to the environment may manifest as harm to
people, but also to nature.

44 
3.2 What types of prevention and mitigation measures can enterprises reasonably expect of suppliers
that are causing or contributing to significant environmental impacts?
The prevention and mitigation measures that are appropriate and proportionate in a particular situation will
depend on a range of factors, including the nature, severity and likelihood of the environmental issue in
question, the supplier’s involvement with the impact and, where it is contributing to an impact, the degree
of leverage it has over other suppliers or entities causing harm. Table 6 provides examples of possible
prevention and mitigation actions that suppliers can put in place where they have caused or contributed to
significant environmental impacts.
Table 6. Examples of potential prevention and mitigation activities by suppliers for environmental
risks
Environmental issue Possible corresponding prevention and mitigation actions
Biodiversity loss In line with the Convention on Biological Diversity (UN, 1992[30]), suppliers may contribute to the conservation of
(e.g. deforestation, coral reef biological diversity, the sustainable use of their components, and the fair and equitable sharing of the benefits arising
degradation, species loss) and out of the utilisation of natural resources.
damage to protected areas Suppliers may also avoid and address land, marine and freshwater degradation, including deforestation,
in line with objectives of UN SDGs notably 15.2, the UN Strategic Plan for Forests 2017-2030 and the 2021 Glasgow
Leaders’ Declaration on Forests and Land Use which seek to halt and reverse forest loss and land degradation by
2030.
Suppliers should prevent and mitigate adverse impacts on biodiversity in national parks, reserves and other
protected areas, including UNESCO Natural World Heritage sites, areas protected in fulfilment of the Convention
on Biological Diversity, and as defined in domestic law, as well as on protected species. This may include no further
exploration, mining, smelting, refining or recycling-related activities in the aforementioned areas as well as
environmentally responsible closure of existing exploration, mining, smelting, refining or recycling-related
operations.
Prevention actions
• Suppliers may ensure that ESIA and ESMP are undertaken to international standards.
• Where relevant, suppliers may develop a detailed biodiversity action plan to be integrated into management
plans.
• Suppliers may refer to the IFC guidance for PS6 (IFC, 2012[31]) to ensure:
o No other viable alternatives within the region exist for development of the project on modified or
natural habitats that are not critical.
o The project or extractive activities do not lead to measurable adverse impacts on those biodiversity
values for which the critical habitat was designated, and on the ecological processes supporting
those biodiversity values.
o The project does not lead to a net reduction in the global and/or national / regional population of
any critically endangered or endangered species over a reasonable period of time.
o A robust, appropriately designed, and long-term biodiversity monitoring and evaluation program
is integrated into the suppliers management program.
o Where such requirements are met, the project’s mitigation strategy will be described in a
biodiversity action plan integrated into management plans, and will be designed to achieve net
gains of those biodiversity values for which the critical habitat was designated.
• Suppliers and downstream enterprises may use earth observation tools to monitor land-use changes
• In the context of deep-sea mining, suppliers may consider:
o committing to not explore, mine or invest in mining of deep-sea locations where irreversible
damage will occur.
o conducting scientific studies to confirm that impacts can be mitigated, using realistic measures
and are reversible.
o obtaining independent confirmation that governance and monitoring of deep-sea mining activities
will conform with international good practice.
Mitigation actions
• Immediately cease illegal activities.
• Rehabilitate and restore affected areas.
• Monitor, quantify and disclose management outcomes.

 45

• Efforts to prevent or mitigate adverse impacts on biodiversity should be guided by the biodiversity mitigation
hierarchy, which recommends first seeking to avoid damage to biodiversity, reducing or minimising it where
avoidance is not possible, and using offsets and restoration as a last resort for adverse impacts that cannot
be avoided. Enterprises may plan and implement biodiversity offsetting to address any residual impacts that
cannot be avoided and deliver no net loss of biodiversity and ecosystem services (including carbon storage)
(OECD, 2016[32]).
• Consider applying the World Bank’s Bolt-on Forest-Smart ASM Standard and Guidelines for sourcing from
ASM in forest landscapes (World Bank, 2019[33]; World Bank, 2021[34]) and the World Bank’s Forest Smart
Mining Guidance to applying nature-based solutions in the large scale mining sector (World Bank, 2022[35]).
Climate change (e.g. GHG Suppliers should prioritise eliminating or reducing sources of emissions over offsetting, compensation, or
emissions , failure to adapt to neutralization measures.
physical risks of climate Prevention actions
change) • Immediately cease the expansion of any new operations in carbon sinks1 such as high carbon stock forests
or peatlands.
• Establish and implement a decarbonization plan in line with internationally agreed global temperature goals
and best practices and adopt, implement, monitor and report on short, medium and long-term mitigation
targets to ensure credibility and avoid greenwashing.
• Establish and implement a climate change adaptation plan to limit the adverse impacts of their operations
associated with current and future climate change impacts.
Mitigation actions
• Carbon credits, or offsets may be considered as a means to address unabated emissions as a last resort.
Carbon credits or offsets should be of high environmental integrity and should not draw attention away from
the need to reduce emissions and should not contribute to avoid locking-in GHG intensive processes and
infrastructures.
Improper use and disposal of The substitution of specific chemicals and materials used along the supply chain can lead to improvements in
hazardous materials environmental performance. Substitution or alternatives may be adopted based on their comparative environmental
risks, including impact on climate and circularity, life cycle analysis and stakeholder considerations.
Prevention actions
• Gold operations may only use cyanide where the operator is certified by the International Cyanide
Management Code (The Cyanide Code, n.d.[36]).
Mitigation actions
• Gold operations can demonstrate progress towards the management and eventual elimination of mercury use
by recovering and reusing it.
• Gold operations may also participate in a national or local programme to implement the Minamata Convention
(UN, 2013[37]) (in the case of ASM) and apply mercury emissions reduction measures in line with the US EPA
Mercury Rule (US EPA, n.d.[38]) (in the case of large scale miners).
Noise and vibration Noise and vibration can be prevented or mitigated by:
• Establishing noise and vibration management plans.
• Installing noise protection systems.
• Improved planning and design of blasting activities.
• Noise insulation of equipment and facilities.
• Monitoring of noise emissions is a prerequisite for systematic management (EC Joint Research Center,
2021[39]).
Physical and chemical Ensuring physical as well as chemical stability of all mine waste facilities are main long-term objectives of mine
instability waste management to ensure safety of workers and the public as well as preventing leaching of long-term
pollutants into the environment. (IGF, 2021[40]) Physical stability of mines can be addressed by:
• Backfilling stabilized material into the excavated voids.
• Monitoring of physical and chemical stability is a prerequisite to systematic management (EC Joint
Research Center, 2021[39]) .
Pollution (air, water, soil) Activities to prevent and mitigate pollution may include:
• Modify facility design to eliminate pollution and the need for treatment of pollution beyond the post-closure
monitoring period.
• Reduce emissions at source (to the extent possible based on technical limitations).
• Implement measures that control emissions related with secondary processing.
• Work towards the implementation of appropriate health and safety measures.
• Implement measures to capture and treat emissions that cannot be avoided.
Soil erosion and land Soil erosion and land degradation can be prevented or reduced by:
degradation • Establishing erosion and sediment control plans.
• Soil management.
• Soil conservation measures (EC Joint Research Center, 2021[39]).
• Managing runoff with control fences and settling ponds (IGF, 2021[40]).

46 

Destruction of cultural heritage Activities to prevent and mitigate damage to cultural heritage sites and natural aesthetics may include:
sites and damage of aesthetics • Undertaking an ESIA and ESMP to international standards.
• Developing detailed plan to prevent harms to cultural heritage sites.
• Anticipating that Indigenous Peoples may expect consultation seeking Free, Prior and Informed Consent
(FPIC) and that risks may be generated if such expectations are not met2.
• Working toward no further exploration, mining, smelting, refining or recycling-related activities within sacred
sites or that will irreversibly degrade such sites.
• Developing inclusive compensation programmes in consultation with affected stakeholders.
Waste mismanagement Activities to ensure environmentally responsible Waste management may include:
• Working toward reducing and eliminating tailings disposal.
• Remediating adverse impacts arising from past disposal of tailings.
• Conform with requirements of the Global Industry Standard on Tailings Management for sites generating
above a certain threshold of tailings per year. (Global Industry Standard on Tailings Management, 2020[41]).
Water depletion Actions to prevent and mitigate water depletion may include:
• Undertaking an ESIA and ESMP to international standards.
• Modifying facility design to implement closed-loop approaches that reduce water consumption and increase
water recycling and reuse.
• Suppliers in water-stressed areas participating in public-private partnerships to manage water resources
sustainably.
• Prohibiting water depleting activities where there is high-risk of contributing to water scarcity/diminishing
supply of water to cities/settlements.
• Create new resources and/or access to ensure no net change in availability and quality of subsistence and
traditional resources.
Other Other activities to support the prevention and mitigation of environmental impacts may include:
• Enterprises may demonstrate an anti-corruption policy with environmental protection in scope, and proof of
implementation.
• Operator may demonstrate progress with implementing a closure plan for mining activities that addresses
sudden (unexpected) closure and closure at the end of life-of-mine (including any required long-term
maintenance and monitoring) within a reasonable timeframe, backed by adequate financial securities.
1. A carbon sink is anything that absorbs more carbon from the atmosphere than it releases – for example, plants, the ocean and soil.
https://www.clientearth.org/latest/latest-updates/stories/what-is-a-carbon-sink/#:~:
text=A%20carbon%20sink%20is%20anything,fossil%20fuels%20or%20volcanic%20eruptions .
2. Enterprises should recognise that the process of seeking FPIC as iterative rather than a one-off discussion. Continuous dialogue with the
local community will lead to a trust relationship and a balanced agreement that will benefit the enterprise across all phases of the project.
Step 4: Track implementation and results
• Track the implementation and effectiveness of the enterprise’s due diligence activities, i.e. its
measures to identify, prevent, mitigate and, where appropriate, support remediation of impacts,
including with business relationships.
• Use the lessons learned from tracking to improve due diligence processes in the future.
What additional mineral-specific recommendations are in the Minerals Guidance?
• Monitor and track performance of risk mitigation efforts and report back to designated senior
management.
• Carry out independent third-party audit of supply chain due diligence at identified points in the
supply chain. Companies at identified points (indicated in the Supplements) should have their due
diligence practices audited by independent third parties.

 47
• 4.1 How can the tracking of implementation activities and results support the risk-based due
diligence process and improve environmental outcomes?
• 4.2 How can an enterprise track the implementation and effectiveness of its own environmental
due diligence activities and those of its suppliers? What type of information about environmental
risks may be tracked?
4.1 How can the tracking of implementation activities and results support the risk-based due diligence
process and improve environmental outcomes?
Enterprises are expected to carry out ongoing monitoring and track progress on the implementation and
effectiveness of due diligence against appropriate outcome-oriented and time-bound indicators and
targets. Tracking involves first and foremost assessing whether identified adverse impacts have been
responded to effectively, prioritising those impacts the enterprise assessed to be most significant under
Step 2 and took action to prevent or mitigate under Step 3. How an enterprise tracks the activities and
outcomes of prioritised impacts, and how often, will vary according to the context (see question 4.2).
While Steps 2 and 3 will influence the focus of tracking activities, the results or findings from tracking can
also inform due diligence and environmental management strategies under Steps 1 and 3. Where
objectives and targets are not being met, enterprises can consider whether modifications to the due
diligence process, including decisions made with respect to prioritisation, are necessary. This helps to
ensure that an enterprises’ due diligence is effective, dynamic and adapted to their most severe
environmental risks at the time. For example, when seeking to reduce scope 3 GHG emissions, tracking
implementation activities and results may identify harder to abate activities in the supply chain or where
the enterprise may need to assert more leverage or provide more support and training to achieve targets.
Demonstrating continuous and meaningful improvement against appropriate and credible indicators is an
important part of tracking. It is also a key characteristic of environmental management systems (see
Question 1.3).
4.2 How can an enterprise track the implementation and effectiveness of its own environmental due
diligence activities and those of its suppliers? What type of information about environmental risks may
be tracked?
To track the implementation and effectiveness of due diligence activities and results effectively, an
enterprise will generally need to consider a wide range of information (e.g. assessment data, data from
grievance mechanisms or site level visits, desk-top research, and engagement with relevant stakeholders
(including workers, workers’ representatives and trade unions) and experts). As for other due diligence
activities, monitoring and verification should be proportionate and risk-based. How an enterprise tracks the
effectiveness of its own due diligence and the due diligence of its suppliers against appropriate targets will
depend on the nature, severity and likelihood of the risk (with greater urgency necessary for severe
impacts) and on the context, including the nature of its operations, its size and the nature of its business
relationships.
For example, if an enterprise is tracking how well it is addressing improper use or disposal of hazardous
materials among its prioritised suppliers, it may consider tracking progress both at the site-level
(e.g. tracking progress of individual suppliers against correct action plans and tracking specific incidents
and how they were handled) and at the global level (e.g. reviewing assessment data, reported grievances
and credible reports across relevant high-risk suppliers or geographies). For severe impacts, there is a
greater urgency to determine that adverse impacts are being effectively addressed.

48 
Tracking progress on environmental risks and impacts in the supply chain can include, for example:
• Monitoring the effectiveness of the enterprise’s own due diligence activities against its
commitments, goals and appropriate indicators, including evaluating progress on impacts that
it may have caused or contributed to and the measures it has taken to support, build capacity,
incentivise and otherwise influence its suppliers in the context of their own prevention, mitigation
and remediation activities. This can include, for example, monitoring of complaints raised through
the enterprise’s own operational-level grievance mechanisms or other legitimate remediation
mechanisms.35
• Periodic verification and ongoing review of information provided by relevant suppliers on
implementation and results of corrective action plans and other due diligence activities.
Enterprises should aim to engage proactively with prioritised suppliers to agree on the most
practical and effective way to find and share information on prevention, mitigation and remediation
activities and results and to establish the appropriate content, format and frequency of any
reporting. Information that might be relevant in a specific context will vary, and will depend on the
specific business relationship and other factors, but can include: third party audit reports or other
assessment reports, suppliers’ public reporting, evidence of site visits and/or stakeholder
engagement, information on grievances raised though the suppliers’ operational-level grievance
mechanism, or other information sources that can inform the enterprise on the status and
management of environmental risks and impacts by the supplier.
• Participating in collaborative initiatives, including as a means of reducing duplicative
assessments and mitigating reporting fatigue for suppliers, and for pooling information, tools and
resources.
• Ongoing and two-way dialogue and open communication between the supplier and the
enterprise to monitor progress on prioritised impacts and identify any conditions that may
warrant enhanced due diligence, based on good faith, two-way engagement.
• Ongoing information-gathering from external sources in order to verify that prioritised risks
and adverse impacts have been prevented, mitigated or remediated effectively, including
through meaningful engagement with relevant stakeholders (or their legitimate representatives),
desktop research, collaborative approaches or the establishment and regular meetings of supply
chain management or environmental working groups or other consultation with experts. See also
the case study on independent community monitoring to assess environmental risks below (see
Box 4).
• Technologies such as Geographic Information Systems (GIS), remote sensing, data
analytics and other tools to help track, analyse, alert and notify enterprises further downstream of
any issues.
Should the enterprise need to dig deeper into what a supplier is reporting on its due diligence, there are
specific data sources that could be requested from or provided by the supplier to facilitate monitoring of
implementation and results, as captured in Question 2.2.

 49
Box 7. Independent community monitoring to assess environmental risks

In the context of a specific facility or business activities, community monitoring – also known as citizen
science, volunteer environmental monitoring, locally-based monitoring and other related variations –
allows communities and business to improve their awareness of environmental risks and impacts and
positively influence environmental management outcomes (Danielsen, 2021[42]). Monitoring can be
participatory (where the community undertakes monitoring in partnership with the facility or business
being monitored) or independent of the facility or business monitoring efforts. Monitoring extends across
a wide range of environmental parameters, with water quality, air quality and biodiversity being amongst
the most common. Training or other capacity building are frequently required to ensure high-quality
environmental data are produced.
The increasing interest in community monitoring has mirrored the rise in participatory decision-making
in many jurisdictions and the concept has been well documented (Stepenuck, 2015[43]), particularly in
OECD countries (Stepenuck, 2013[44]), but also beyond. It is likely that smartphone apps and online
portals will present new opportunities for the continued growth of community monitoring and integration
of data in decision-making processes, with new guidance promoting increased uptake.
Although many communities prefer to conduct independent monitoring of adverse impacts of a mine, it
is rare that there are enough funds or the will by the local supplier for communities to conduct
independent monitoring. Consequently, downstream actors can also support local communities by
contributing to independent funds to support this activity and incentivising suppliers to establish
community monitoring systems (Sydow et al., 2021[45]).
Step 5: Communicate how impacts are addressed
• Communicate externally relevant information on due diligence policies, processes, activities

conducted to identify and address actual or potential adverse impacts, including the findings and
outcomes of those activities.
• Publish information in a way that is easily accessible and appropriate.
• Publish the audit reports of due diligence practices, with due regard taken of business
confidentiality and other competitive concerns and responses to identified risks.
Questions addressed under this step:

• 5.1 What type of environmental due diligence information can be disclosed by an enterprise? And
how can risk-based due diligence support communication activities?
• 5.2. What reporting frameworks already exist that may help enterprises communicate on how
environmental risks and impacts in their supply chain are being monitored and addressed
5.1: What type of environmental due diligence information can be disclosed by an enterprise? And how
can risk-based due diligence support communication activities?

50 
The RBC Guidance recommends that enterprises’ due diligence reporting includes relevant information on
measures taken to embed RBC into policies and management systems, the enterprise’s identified areas
of significant risks and prioritised impacts, prioritisation criteria, actions taken to address priority impacts
against targets and their outcomes, measures to track implementation and results, and the provision of or
co-operation in any remediation.
Enterprises are expected to take proportionate, risk-based steps to disclose relevant information on their
environmental due diligence. This may include information on:
• Any constraints likely to limit the quality or scope of relevant due diligence findings.
• The results of environmental risk assessments and carbon accounting, including significant
environmental risks and their receptors, including associated human rights impacts. When
communicating information on suppliers’ due diligence, information may be shared in aggregate
form, or the conditions of reporting agreed with the relevant suppliers.
• Environmental mitigation and remedial measures planned or implemented to address risks or
adverse impacts, including details of restoration, remediation, rehabilitation, remedy, partnerships,
coalitions and other efforts to build or use leverage.
• Where possible, the results of mitigation and remedial measures.
• Schedule of remedial and monitoring activities.
• Lessons learned and plans for continuous improvement of environmental management and
responsible sourcing.
Disclosure of environmental due diligence information is likely to result in responses from impacted or
potentially impacted stakeholders and other parties with rights or interests in the process, findings or
subsequent monitoring and remediation. This is an opportunity for the enterprise to gather new or additional
information that could influence its risk assessment and prioritisation or its mitigation, prevention and
remediation planning.
5.2. What reporting frameworks already exist that may help enterprises communicate on how
environmental risks and impacts in their supply chain are being monitored and addressed?
There are many reporting frameworks an enterprise can use to help communicate the processes they have
in place to address environmental impacts. Some examples of reporting frameworks to help communicate
on external environmental impacts are provided below, but enterprises can identify the most suitable
reporting frameworks for their needs:
• The GRI Standards – particularly GRI 2 General Disclosures (including reporting on the Due
Diligence process), GRI 300 series on environmental issues (among others, GRI 308 Supplier
Environmental Assessment) https://www.globalreporting.org/how-to-use-the-gri-standards/gri-
standards-english-language/
• The Task Force on Climate-related Financial Disclosures (TCFD) – particularly the principles
for effective disclosures. https://www.fsb-tcfd.org/
• The Task Force for Nature-Related Financial Disclosures v2.0 – particularly chapter 1 and 2
https://framework.tnfd.global/wp-content/uploads/2022/06/TNFD-Framework-Summary-
Executive-Summary-Beta-v0-2.pdf
• Carbon Disclosure Project (CDP) worldwide https://www.cdp.net/en
• GHG protocol https://ghgprotocol.org/
• The UN Global Compact – particularly around guidance on Communication on Progress (CoP).
https://unglobalcompact.org/participation/report/cop

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• ISO 14040:2006 – which describes the principles and framework for LCA of specific products, not
of the organisation as a whole. This standard addresses environmental impacts in general,
including GHG emissions. ISO 14064 provides a standard for the GHG footprint of organizations.
Step 6: Provide for or cooperate in remediation when appropriate
• When the enterprise identifies that it has caused or contributed to actual adverse impacts,
address such impacts by providing for or cooperating in their remediation.
• When appropriate, provide for or cooperate with legitimate remediation mechanisms through
which impacted stakeholders and rightsholders can raise complaints and seek to have them
addressed with the enterprise.
• The appropriate process to enable remediation will be dependent upon several factors
including legal obligations, stakeholder preferences, availability of mechanisms, the nature of the
adverse impact and where the adverse impact occurs (i.e. within the enterprise’s own operations
or its supply chain).
• 6.1 What are the different types of remediation relevant to environmental impacts?
• 6.2 How can the mitigation hierarchy support a risk-based approach to environmental remedy?
And what can be done in cases where restoration of the environment to its pre-existing condition
or rehabilitation of environmental damage is not possible?
• 6.3. What mechanisms and instruments can enable environmental remedy?
6.1: What are the different types of remediation relevant to environmental impacts?
“Remediation” and “remedy” refer to the processes of restoring an affected person or persons (or the
environment) to the situation it or they would be in had the adverse impact not occurred. Under the OECD
Guidelines there is an expectation that enterprises remediate impacts that they cause or contribute to, or
seek to influence remediation by a business relationship where they are directly linked to an impact. In
situations of direct linkage, the emphasis is on checking that supplier remediation activities and
mechanisms, such as grievance mechanisms, are effective.
In the context of environmental impacts, remedy may take the following forms:
• Preventative remedy – puts the focus on activities that prevent or reduce the likelihood of
environmental harm happening again. For example, the change of supplier management methods
to better identify, monitor and address events that have caused (or are likely to cause) an
environmental impact.
• Restoration and/or rehabilitation practices (sometimes known as primary remediation) need
to be applied, where possible, to re-establish ecosystem structures and functions to a prior state,
or a stakeholder agreed end-use state.
• Compensation of affected stakeholders (sometimes known as compensatory remediation)
or offsetting of environmental impacts (sometimes known as complimentary remediation).
Environmental remediation may be one avenue for achieving remedy for victims of human rights
violations through environmental damage. For example, the provision of an alternative water
resource.

52 
Examples of common remediation activities associated with environmental impacts include for example:
• Biodiversity loss – This might include the restoration, rehabilitation and active protection of
damaged or destroyed ecosystems and habitats or bringing back lost species that are found
naturally in the area.
• Water pollution – Depending on the context and cause of the impact, this might include active or
passive water treatment or implementation of reactive barriers to isolate and / or treat contaminated
groundwater.
• Air pollution – Progressive rehabilitation and implementation of wind barriers on tailings facilities,
stockpiles and waste dumps, watering of roads and tracks and implementation of appropriate
technologies to reduce emissions.
• Waste mismanagement – Clean-up of contaminated soil, through measures that may include
bioremediation and / or phytoremediation measures 36.
6.2: How can the mitigation hierarchy support a risk-based approach to environmental remedy? And
what can be done in cases where restoration of the environment to its pre-existing condition or
rehabilitation of environmental damage is not possible?
Enterprises should prioritise eliminating or reducing environmental harms over offsetting, compensation,
or neutralization measures, in line with the principles of the mitigation hierarchy. However, in some cases,
it may not be possible to remediate adverse impacts through environmental restoration or rehabilitation
measures. In those cases, compensation measures may need to be applied both to nature and to affected
rights holders.
Compensation measures in the context of human rights may include financial compensation or relocation
of affected rights holders, whereas compensation in an environmental context may include considerations
around offsetting and the promotion of restoration in the wider landscape through avoided deforestation
and ecosystem degradation.
It is important, however, to carefully evaluate offsets, as there are also social and environmental impacts
around the application of offsetting that can be taken into account. For example, in the context of mitigating
GHG emissions in an enterprise’s supply chain, carbon credits or offsets may be considered as a means
to address unabated emissions as a last resort. Furthermore, there is growing policy momentum in favour
of the pursuit of both net positive biodiversity outcomes and achieving socio-economic additionalities as
part of nature-based solutions, setting expectations of good practice to be beyond offsetting and towards
regeneration and the enhancement of natural capital.
6.3. What mechanisms and instruments can enable environmental remedy?
Enterprises participate in remediation for impacts that they cause or contribute to. To participate in remedy,
enterprises must establish and participate in mechanisms that allow stakeholders to raise complaints about
emerging impacts. These mechanisms may feed into enterprises’ ongoing risk prioritisation.
In the case of people who have been impacted by an adverse environmental impact, remedy puts the
focus on the victim’s right to “equal and effective access to justice; adequate, effective and prompt
reparation for harm suffered, and access to relevant information concerning violations and reparation
mechanisms.” (UN, 2005[46])
Mechanisms to support the provision of environmental remedy may include:

 53
• Non-judicial mechanisms and operational-level grievance mechanisms that are legitimate,

accessible, predictable, equitable, transparent and dialogue based, including the National Contact
Points for RBC.
• The holding of adequate and secure financial securities that covers mine reclamation, closure
and post-closure activities, maintenance, and monitoring. Establishing insurance mechanisms to
support environmental remediation and rehabilitation activities or post-mine closure care, as well
as addressing damages or liability that may be incurred from activities.
• Collaborative industry action to leverage and support remediation activities. Collaborative action
can support environmental remedy upstream, particularly in circumstances of cumulative
environmental impacts and where remediation activities are more effective when they take place
at the landscape level.
• Legal action (prosecution, litigation and arbitration) to finance, accelerate and enforce the
mechanisms above.

54 
Annex A. Glossary of environmental terms
Biodiversity
Biodiversity means the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic
ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of
ecosystems.
Source: The Convention on Biological Diversity, Article 2. Use of Terms. https://www.cbd.int/convention/articles/?a=cbd-02
Critical Habitat
Areas with high biodiversity value, including but not necessarily limited to: (i) habitat of significant importance to critically endangered,
endangered species; (ii) habitat of significant importance to endemic and/or restricted range species; (iii) habitat supporting globally
significant concentrations of migratory and/or congregatory species; (iv) highly threatened and/or unique ecosystems; and/or (v) areas
associated with key evolutionary processes. Other recognized high biodiversity values might also support a critical habitat designation,
based on case-by-case evaluation by a specialist.
Source: Adapted from IFC. 2012. Performance Standard 6, Para. 13 and GN55, GN56, 57.
Deep Sea Mining
The process of retrieving mineral deposits from the deep sea – the area of the ocean below 200 m.
Source: International Union for the Conservation of Nature (IUCN). 2020. Issues Brief.
Deforestation
The conversion of forest to other land use independently, whether human-induced or not.
Source: FAO (2020), Global Forest Resources Assessment 2020: Terms and Definitions. https://www.fao.org/3/I8661EN/i8661en.pdf
Ecosystem services
The principal framework for expressing the ‘usefulness’ of biodiversity is through the concept of ecosystem services. It illustrates the link
between, on one hand, the interactions of species with each other and with the physical environment; and on the other, the well-being of
people, whether in terms of wealth, nutrition or security. The Millennium Ecosystem Assessment, published in 2005, divided ecosystem
services into four categories:
• Provisioning services, or the supply of goods of direct benefit to people, and often with clear monetary value, such as timber
from forests, medicinal plants, and fish from the oceans, rivers and lakes.
• Regulating services, the range of functions carried out by ecosystems which are often of great value but generally not given a
monetary value in conventional markets. They include regulation of climate through the storing of carbon and control of local
rainfall, the removal of pollutants by filtering the air and water, and protection from disasters such as landslides and coastal
storms.
• Cultural services, not providing direct material benefits, but contributing to wider needs and desires of society, and therefore to
people’s willingness to pay for conservation. They include the spiritual value attached to particular ecosystems such as sacred
groves, and the aesthetic beauty of landscapes or coastal formations that attract tourists.
• Supporting services, not of direct benefit to people but essential to the functioning of ecosystems and therefore indirectly
responsible for all other services. Examples are the formation of soils and the processes of plant growth.
Source: Convention on Biological Diversity and United Nations Environment Program Factsheet on Ecosystem services
https://www.cbd.int/undb/media/factsheets/undb-factsheet-ecoserv-en.pdf
Free, Prior and Informed Consent
People are (i) ‘not coerced, pressured or intimidated in their choices of development’; (ii) ‘their consent is sought and freely given prior to
authorisation of development activities’; (iii) they ‘have full information about the scope and impacts of the proposed development
activities on their lands, resources and wellbeing’; and (iv) ‘their choice to give or withhold consent over developments affecting them is
respected and upheld’
Source: UN Permanent Forum on Indigenous Issues (UNPFII, 2005:12).
Forest
Land spanning more than 0.5 hectares with trees higher than 5 meters and a canopy cover of more than 10%, or trees able to reach
these thresholds in situ. It does not include land that is predominantly under agricultural or urban land use.
Source: FAO (2020), Global Forest Resources Assessment 2020: Terms and Definitions. https://www.fao.org/3/I8661EN/i8661en.pdf
Greenhouse Gases (GHG)
Greenhouse gases are those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at
specific wavelengths within the spectrum of terrestrial radiation emitted by the earth’s surface, the atmosphere itself, and by clouds. This
property causes the greenhouse effect. Water vapour (H2O), carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4) and ozone (O3)

 55
are the primary greenhouse gases in the earth’s atmosphere. Moreover, there are a number of entirely human-made greenhouse gases in
the atmosphere, such as the halocarbons and other chlorine- and bromine- containing substances, dealt with under the Montreal Protocol.
Beside CO2, N2O and CH4, the Kyoto Protocol deals with the greenhouse gases sulphur hexafluoride (SF6), hydrocarbons (HFCs),
nitrogen triflouride (NF3), and perfluorocarbons (PFCs)
Source: Intergovernmental Panel on Climate Change (IPCC). 2014. Climate Change 2014: Mitigation of Climate Change. Contribution of Working
Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change.
High Conservation Value (HCV)
Biological, ecological, social or cultural values considered outstandingly significant at the national, regional or global level.
Source: UNEP WCMC Biodiversity A to Z.
Just transition
A concept originally introduced in the UNFCCC Paris Agreement (2015) where a key Guiding principle of the Agreement is for countries to
“take into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with
nationally defined development priorities.”
The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct note that carrying out environmental due diligence
and managing adverse environmental impacts will often involve taking into account multiple environmental, social and developmental
priorities. In this respect it is important for enterprises to assess and address social impacts in the context of their environmental
management and due diligence activities and to take action to prevent and mitigate such adverse impacts both in their transition away
from environmentally harmful practices, as well as towards greener industries or practices, such as the use of renewable energy.
Source: OECD (2023), OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, OECD Publishing, Paris,
https://doi.org/10.1787/81f92357-en.
Key Biodiversity Area
Sites contributing significantly to the global persistence of biodiversity, in terrestrial, freshwater and marine ecosystems. They represent
the most important sites for biodiversity conservation worldwide and are identified nationally using globally standardised criteria and
thresholds.
Source: UNEP WCMC, modified from IUCN. 2016. Global Standard for the Identification of Key Biodiversity Areas.
Life Cycle Assessment (LCA)
Compilation and evaluation of the inputs, outputs and the potential environmental impacts of a product or service throughout its life cycle.
Source: Intergovernmental Panel on Climate Change (IPCC). 2018. Special Report on Global Warming of 1.5°C – SR15, modified from ISO,
2018: ISO 14044:2006.
Mitigation Hierarchy
“The mitigation hierarchy is a set of prioritized steps to alleviate environmental (or social) harm as far as possible through avoidance,
minimization and restoration of adverse impacts. Compensation/offsetting are only considered to address residual impacts after
appropriate avoidance, minimization and restoration measures have been applied. The biodiversity mitigation hierarchy is as follows (but
the steps can be applied for any environmental or social impacts):
i. Avoidance: measures taken to avoid creating impacts from the outset, such as careful spatial or temporal placement of
elements of infrastructure, in order to completely avoid impacts on certain components of biodiversity. This results in a change
to a ‘business as usual’ approach.
ii. Minimization: Measures taken to reduce the duration, intensity and/or extent of impacts that cannot be completely avoided, as
far as is practically feasible.
iii. Restoration: measures taken to assist the recovery of ecosystems that have been degraded, damaged or destroyed. Involves
altering an area in such a way as to re-establish an ecosystem’s composition, structure and function, usually bringing it back to
its original (pre-disturbance) state or to a healthy state close to the original.
iv. Offset: Measurable conservation outcomes resulting from actions designed to compensate for significant residual adverse
impacts on biodiversity arising from project development after appropriate prevention and mitigation actions have been taken.
The goal of biodiversity offsets is no net loss or a net gain of biodiversity on the ground with respect to species composition,
habitat structure, ecosystem function and people’s use and cultural values associated with biodiversity.”
Source: Initiative for Responsible Mining Assurance (IRMA). 2018. Standard Glossary of Terms.
Nature-based solutions
Nature-based solutions are measures that protect, sustainably manage or restore nature, with the goal of maintaining or enhancing
ecosystem services to address a variety of social, environmental and economic challenges.
Source: OECD (2020), Nature-based solutions for adapting to water-related climate risks. Policy Perspectives. OECD Environment Policy Paper
No. 21. OECD Publishing. Paris, https://doi.org/10.1787/2257873d-en.
Natural capital
Nature is an asset or capital stock (i.e. natural capital), like produced (physical) and human capital. Natural capital provides goods and
services that contribute directly or indirectly to a country’s economic output and human well-being. But it is much more than an economic
good; nature also holds intrinsic value. Natural capital is the most important of all capital stocks, as it provides fundamental life-support
functions. It sets the ecological boundaries for socio-economic systems.
Source: OECD (2021), Biodiversity, Natural Capital and the Economy: A Policy Guide for Finance, Economic and Environment Ministers. Policy
Perspectives. OECD Environment Policy Paper NO. 26. OECD Publishing. Paris. https://www.oecd-ilibrary.org/docserver/1a1ae114-
en.pdf?expires=1693395607&id=id&accname=ocid84004878&checksum=43C12709219D3FDDEE2CA8FC7E142008.

56 
Offsets
• Biodiversity Offsets Biodiversity offsets are measurable conservation outcomes that result from actions designed to compensate
for significant, residual biodiversity loss from development projects. They are intended to be implemented only after reasonable
steps have been taken to avoid and minimise biodiversity loss at a development site. Biodiversity offsets are based on the premise
that impacts from development can be compensated for if sufficient habitat can be protected, enhanced or established elsewhere.
Biodiversity offsets are economic instruments and are based on the polluter pays approach. They aim to internalise the external
costs of biodiversity loss from development projects by imposing a cost on the activities that cause adverse impacts to biodiversity.
Source: OECD (2016), Biodiversity Offsets: Effective Design and Implementation, Policy Highlights. OECD Publishing, Paris
https://www.oecd.org/environment/resources/Policy-Highlights-Biodiversity-Offsets-web.pdf
• Carbon or GHG Offsets A carbon offset is a reduction in emissions of carbon dioxide or other greenhouse gases made in order to
compensate for (“offset”) an emission made elsewhere.
Source: https://www.ipcc.ch/2018/06/15/ipcc-meetings-go-carbon-neutral/#:~:
text=A%20carbon%20offset%20is%20a,%E2%80%9D)%20an%20emission%20made%20elsewhere.
Protected Area
“A clearly defined geographical space, recognized, dedicated and managed, through legal or other effective means, to achieve the long-
term conservation of nature with associated ecosystem services and cultural values.” The definition is expanded by six “protected area
management categories” covering strict nature reserve, wilderness area, national park, natural monument or feature, habitat / species
management area, protected landscape or seascape.
Source: Modified from Dudley (2008), Guidelines for Applying Protected Area Management Categories. International Union for the Conservation
of Nature (IUCN).
Reclamation
The process of making severely degraded land fit for cultivation or a state suitable for some human use.
Source: Society for Ecological Restoration’s international standards.
Rehabilitation
Measures taken to rehabilitate degraded ecosystems or cleared ecosystems following exposure to impacts that cannot be completely
avoided and/ or minimised. Rehabilitation emphasizes the reparation of ecosystem processes, productivity and services. Rehabilitation
cannot always restore the ecosystem to its pre-existing condition, but it aims at re-establishing species and communities of the
ecosystem.
Source: Modified from BBOP & UNEP. 2010. Mitigation Hierarchy. Business and Biodiversity Offsets Programme & United Nations Environment
Programme, Washington DC, USA; BBOP. 2012. Glossary. Business and Biodiversity Offsets Programme, Washington DC, USA.
Restoration
Re-establishment of ecosystem structure and function to an image of its prior near-natural state or replication of a desired reference
ecosystem.
Source: International Council on Mining and Metals (ICMM). 2019. Integrated mine closure: Good practice guide (2nd ed.)
Scope 1, 2 and 3 emissions
Emissions responsibility as defined by the GHG Protocol, a private sector initiative. ‘Scope 1’ indicates direct GHG emissions that are
from sources owned or controlled by the reporting entity. ‘Scope 2’ indicates indirect GHG emissions associated with the production of
electricity, heat, or steam purchased by the reporting entity. ‘Scope 3’ indicates all other indirect emissions, i.e. emissions associated with
the extraction and production of purchased materials, fuels, and services, including transport in vehicles not owned or controlled by the
reporting entity, outsourced activities, waste disposal, etc.
Source: Intergovernmental Panel on Climate Change (IPCC). 2014. Climate Change 2014: Mitigation of Climate Change, modified from WBCSD
and WRI, 2004.

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Annex B. Non-exhaustive list of tools to identify,

assess and manage environmental risks and
impacts
Accountability, ratings and disclosure

• AA1000 AccountAbility Principles
• GRI Standards: 101 Foundation and 102 General Disclosures
• Task Force for Nature Financial Disclosures v2.0 (TNFD) and its Glossary of Key Terms
• Task Force on Climate-Related Financial Disclosures (TCFD)
• Carbon Disclosure Project (CDP)
• Ecovadis
• Institutional Shareholder Services (ISS)
• MSCI
• Sustainalytics
• Dow Jones Sustainability Indices (DJSI)
Best Available Techniques (BAT) reference documents (BREFs) – for example
• Production of Cement, Lime and Magnesium Oxide – BREF BATC (04.2013)
• Emissions from Storage – BREF (07.2006)
• Energy Efficiency – BREF (02.2009)
• Ferrous Metals Processing Industry – BREF (12.2001)
• Industrial Cooling Systems – BREF (12.2001)
• Iron and Steel Production – BREF BATC (03.2012)
• Non-ferrous Metals Industries – BREF BATC (06.2016)
• Refining of Mineral Oil and Gas – BREF BATC (10.2014)
• Waste Treatment – BREF BATC (08.2018)
• Manufacture of Glass – BREF BATC (03.2012)
• Ceramic Manufacturing Industry – BREF (08.2007)
Biodiversity
• Good Practice Guide for Mining and Biodiversity
• Integrated Biodiversity Assessment Tool (IBAT)
Community and stakeholder engagement
• IHRB Promoting Human Rights and Ensuring Social Inclusion in the Extractives Sector.
• IFC Stakeholder Engagement Practice Handbook
• AA1000 Stakeholder Engagement Standard

58 
• OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector
Greenhouse gas emissions
• GHG Protocol
Impact Assessment
• IFC Performance Standard 1. Social and Environmental Assessment and Management Systems
• WBCSD Cement Sustainability Initiative Guidelines for Environmental & Social Impact Assessment.
• International Council on Mining and Metals (ICMM) Good Practice Guidance on Health Impact Assessment
• IAIA The Circular Economy and Impact Assessment - A Primer
• IAIA The State of Digital Impact Assessment Practice
• IFC Good Practice Handbook - Cumulative Impact Assessment and Management: Guidance for
the Private Sector in Emerging Markets
Life Cycle Assessment (LCA)
• ISO 14040 Environmental management – Life cycle assessment – Principles and framework
• Ecoinvent Database
Risk Assessment and Management.
• ISO 31000 – Risk management
Tailings management
• Global Industry Standard on Tailings
• Guidelines for Responsible Mine Tailings
Water management
• UNEP Integrated Water Resources Management
• UNESCO World Water Assessment Programme
• AWS International Water Stewardship Standard
• CEO Water Mandate’s Water Disclosure Guidelines
• Aqueduct Water Risk Atlas (wri.org)
Grievance mechanisms, incident reporting and monitoring
• International Council on Mining and Metals (ICMM), Handling and Resolving Local-level Concerns and
Grievances: Human rights in the mining and metals sector
• Kufatilia (“to track” in Swahili) is an SMS-based platform to support incident reporting and monitoring
through the work of a network of Civil Society Organisations in Eastern DRC.
Remedy and/or remediation
• Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross
Violations of International Human Rights Law and Serious Violations of International Humanitarian
Law
Relevant initiatives
• Towards Sustainable Mining
• The Raw Materials Outlook Platform
• The Materials Insight
• Water Resilience Coalition

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Notes
1There is no definitive list of minerals critical to the energy and digital transitions, and a mineral’s assessed criticality can change over time
and between countries.
2For more information see OECD (2023), Net Zero+: Climate and Economic Resilience in a Changing World, OECD Publishing, Paris,
https://doi.org/10.1787/da477dda-en.
3A sub-set of upstream entities located at or immediately around the point of transformation like smelters, refiners and international
concentrate traders are sometimes referred to as ‘mid-stream’ to distinguish them from other upstream entities.
4 This includes climate litigation, with the 2021 judgement by the District Court of the Netherlands highlighting the role of the OECD Guidelines
for MNEs in understanding the duty of care owed by business on climate action and emissions reduction obligations: Milieudefensie et al.
v. Royal Dutch Shell plc, https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI: NL: RBDHA:2021:5339.
5 Non-party Stakeholders under the United Nations Framework Convention on Climate Change include national governments, cities, regions
and other sub national entities, international organizations, civil society, indigenous peoples, women, youth, academic institutions, as well as
businesses) acting as individual entities or in partnerships.
6See Part I of OECD’s Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences (OECD, 2019[2]) or
Chap 2.1 of UNEP’s Global Resources Outlook (UNEP, 2019[51]).
7It is important to note that circular economy approaches can be applied at all stages of the minerals supply chain, including extraction. For
example, the recovery of minerals from extractive waste rather than reverting to landfill or the reuse/recycling of equipment.
8For more information and resources on Human rights and the environment, please see the website of the OHCHR’s Special Rapporteur on
human rights and the environment, https://www.ohchr.org/en/special-procedures/sr-environment.
9Product design and production processes of downstream enterprises are also crucial for sustainable development as product design and the
choice of materials used in production determine the type of products that enter the market as well as how recyclable these products are.
10 This issue is explored further in the OECD Position Paper on Costs and Value of Due Diligence in Mineral Supply Chains (OECD, 2021[50]).
11Adverse environmental impacts specifically referenced in the MNE Guidelines are not exhaustive. Other related and more specific impacts
were identified by the expert working group for the Handbook.
12 See the Glossary for more information on Biodiversity.
13Subject to evolving interpretation, indirect impacts can be treated as contribution or direct linkage under RBCs involvement framework,
depending on specific circumstances.
14 See the RBC Guidance, Annex, Q3 for meanings of these terms.
15 See the Glossary for more information on Scope 1, 2 and 3 emissions.
Under OECD RBC standards, the severity of a risk or impact is determined according to its scale, scope and irremediable character. See
16
RBC Guidance, Annex, Question 3, p. 42.

64 
17For a deeper analysis on the risk-based approach, readers can refer to the Background note on Regulatory Developments
concerning Due Diligence for Responsible Business Conduct and the background note on Translating a risk-based due
diligence approach into law, developed by the OECD Secretariat.
18 See the Glossary for a more detailed explanation of the mitigation hierarchy.
19For best practice on gender responsive due diligence, see the Gender-Responsive Due Diligence Platform
(https://www.genderduediligence.org/), the US Department of State Fact Sheet Managing Risks to Women in Supply Chains
(https://www.state.gov/managing-risks-to-women-in-supply-chains/), and the working group Women’s Rights and Mining
(https://womenandmining.org/) .
20 Under OECD RBC standards, relevant stakeholders are understood as persons or groups, or their legitimate representatives, who have
rights or interests related to the matters covered by the Guidelines that are or could be affected by adverse impacts associated with the
enterprise’s operations, products or services (MNE Guidelines, Commentary, Chapter II, paragraph 28 and RBC Guidance, Annex, Q.8, p.
48).
21For example, see the Commentary to the Commentary on Chapter II: General Policies of the OECD Guidelines for Multinational Enterprises
on Responsible Business Conduct (OECD, 2023[16]). For more information on stakeholder engagement in the extractives sector, please see
OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector (OECD, 2017[49]):
https://mneguidelines.oecd.org/stakeholder-engagement-extractive-industries.htm.
22For example, building upon guidance in existing ASM standards, such as Fairtrade, Fairmined, the Code of Risk-mitigation for artisanal and
small-scale mining engaging in Formal Trade (CRAFT Code), Planet GOLD+, Gemfair, the World Bank’s Forest Smart ASM Bolt-on Standard,
and so on.
23 These include the following:
Sector risks are risks that are prevalent within a sector globally as a result of the characteristics of the sector, its activities, its products and
production processes. For example, the extractive sector is often associated with risks related to a large environmental footprint and impacts
on local communities.
Product risks are risks related to inputs or production processes used in the development or use of specific products. For example, phones
and computers may contain components that are at risk of being mined from conflict areas.
Geographic risks are conditions in a particular country which may make sector risks more likely. Geographic risk factors can generally be
classified as those related to the regulatory framework (e.g. alignment with international conventions), governance (e.g. strength of
inspectorates, rule of law, level of corruption), socio-economic context (e.g. poverty and education rates, vulnerability and discrimination of
specific populations) and political context (e.g. presence of conflict).
Enterprise-level risks are risks associated with a specific enterprise such as weak governance, a poor history of conduct in relation to
respecting human rights, labour rights, anti-corruption standards, environmental standards, or a lack of culture around RBC.
24 For example, The World Bank’s Forest Smart Mining reports on LSM (Maddox et al., 2019[47]) and the Artisanal and Small-Scale Mining
Bolt-on Standard (World Bank, 2021[34]) both provide a useful set of criteria and indicators for assessing the extent to which a mining operation
is managing its risks to forest values.
25 Examples include UNEP’s Map-X (Projects – MapX) and ASM Spotter: https://www.mapx.org/projects/.
26 For more information on the role of sustainability initiatives in due diligence, see the Background note on regulatory developments: The role
of sustainability initiatives in mandatory due diligence: http://mneguidelines.oecd.org/the-role-of-sustainability-initiatives-in-
mandatory-due-diligence-note-for-policy-makers.pdf Further information on the OECD’s Alignment Assessments of sustainability
initiatives, including in the minerals sector, is available here: https://www.oecd.org/corporate/industry-initiatives-alignment-
assessment.htm.
27Safety data sheets are a mechanism for transmitting appropriate safety information on substances and mixtures whish are, for example
meet criteria for classification as hazardous or a substance is persistent, bioaccumulative and toxic.
(https://echa.europa.eu/documents/10162/2324906/sds_en.pdf/01c29e23-2cbe-49c0-aca7-72f22e101e20).
28 Bioconcentration/bioaccumulation is the increase in concentration of the test substance in or on an organism (specified tissues thereof)
relative to the concentration of test substance in the surrounding medium. (OECD, 1996[51])

 65
29The ability of a substance to cause deleterious effects to living organisms during a long-term exposure.
https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/chronic-toxicity
30A “landscape approach” is a term used to describe collaborative initiatives in specific places that span multiple sectors and go beyond the
scale of individual farms, forest management units and protected areas. It is a coherent intervention at a landscape scale to secure food, fibre
and energy production, improvements in social welfare, water security and ecosystem conservation.
http://forestsolutions.panda.org/solutions/landscape-approaches
31While mine-closure and post mining plans are rarely established and implemented by ASM, this Handbook provides considerations for
progressive engagement on this difficult issue.
32 For more information please see p80-81 of the RBC Guidance.
33 Severity is not an absolute concept and is context-specific; where the risk of a potential impact is most likely and most severe will be specific
to the enterprise, its sector and the nature of its business relationships. Severity is determined according to three factors, set out in the RBC
Guidance:
• Scale: the gravity or seriousness of the potential or actual impact, such as the degree of serious impact on workers’ health and safety,
degree of waste or chemical generation; or loss of life or severe bodily harm caused.
• Scope: the reach or extent of the potential or actual impact, for example the number of individuals that are or will be affected, or the
extent of environmental damage or other environmental impact.
• Irremediable character: its irreversible nature, or any limits on the ability to restore the individuals or environment affected to a situation
equivalent to their situation before the adverse impact.
34 See Glossary for key definitions.
35 See Step 6 of the RBC Guidance and Annex, Q.48-54.
36 The use of microorganisms (bioremediation) or plants (phytoremediation) to remediate soils following contamination.

Handbook on Environmental Due Diligence
in Mineral Supply Chains
This handbook was developed to help companies embed environmental considerations into their mineral
supply chain due diligence procedures. The handbook builds on the leading international, government‑backed
standards on supply chain due diligence and responsible business conduct: the OECD Guidelines
for Multinational Enterprises on Responsible Business Conduct, the OECD Due Diligence Guidance
for Responsible Supply Chains of Minerals from Conflict‑Affected and High‑Risk Areas and the OECD Due
Diligence Guidance for Responsible Business Conduct. This handbook demonstrates how OECD instruments
on due diligence can be applied to address environmental risks and impacts in mineral supply chains
by contextualising existing recommendations and directing users towards useful resources.
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Handbook on Environmental

Due Diligence in Mineral

Please cite this publication as:

ISBN 978-92-64-52206-0 (print)

Photo credits: © Dmitrii Zotov/Getty Images.

Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm.

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

2 Understanding environmental risks and impacts 12

3 Due diligence as a tool 17

4 Six step due diligence approach 23

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Annex A. Glossary of environmental terms 54

Follow OECD Publications on:

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

This introduction sets out why risk-based environmental due diligence

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Why environmental due diligence matters to businesses operating in mineral

Circularity and enhanced use of secondary resources

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Box 1. The circular economy

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Sourcing from Artisanal and Small-Scale Mining

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

2 Understanding environmental risks

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

What does the Handbook cover?

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Adverse impact Examples of scale Examples of scope Examples of the irremediable

Table 2. Examples of environmental issues in upstream mineral supply chains

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Environmental issue Description

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

3 Due diligence as a tool

This chapter introduces due diligence as a tool and explains why a

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Risk-based due diligence to address environmental risks and adverse impacts

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Target audience and responsibility for due diligence

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Figure 1. Addressing environmental impacts in mineral supply chains

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Figure 2. How to use OECD instruments on RBC together

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

4 Six step due diligence approach

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Integrating environmental risk management into due diligence systems

Figure 3. Due diligence process and supporting measures

Step 1: Embed RBC into policies and management systems

What do the RBC Guidance and Minerals Guidance say?

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Key questions on how to integrate environmental risk considerations into Step 1:

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

Box 4. Meaningful stakeholder engagement

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023

HANDBOOK ON ENVIRONMENTAL DUE DILIGENCE IN MINERAL SUPPLY CHAINS © OECD 2023