Exploitation and abuse within huge swathes of the renewable energy technology supply chain could be leaving investors open to myriad ESG risks, new analysis has indicated.
The research, carried out by the Business & Human Rights Resource Centre (BHRRC), found that 87% of the top companies producing the minerals needed for the low carbon transition have been linked to human rights abuse allegations since 2010.
This is in spite of 61% having a publicly available human rights policy.
The study looked at the 23 top miners for lithium, copper, cobalt, manganese, nickel and zinc – the vital minerals needed to make solar panels, wind turbines and electric cars.
Environmental impacts and access to water were the most commonly identified allegations, with reports of abuse of indigenous peoples’ rights, labour rights, tax avoidance and health impacts abuse also prevalent.
At 43, Glencore had the highest number of total allegations, which included environmental pollution and tax avoidance and spanned its zine, nickel, copper and cobalt businesses.
Eniko Horvath, Senior Researcher at the centre, said: “This study shows that mineral supply chains are still riddled with exploitation and abuse. As the renewable energy sector finds its feet, it is crucial that it introduces rigorous human rights protections throughout its supply chains to prevent abuse, retain the social license to operate, and avoid costly delays due to local opposition.”She added: “Solar, wind, and electric car companies and their investors can help ‘clean up’ the minerals industry by insisting on high human rights standards in their supply chains and confronting unscrupulous business practice.”
All five top lithium companies (Albemarle, SQM, Livent Corporation, Tianqi Lithium, Jiangxi Ganfeng Lithium) have had human rights abuse allegations made against them, while only one (Livent Corporation) has a publicly available human rights policy.
The World Bank has projected steeply rising demand for such minerals, estimating up to 965% demand growth for lithium and 585% for cobalt by 2050.
“Mineral supply chains are still riddled with exploitation and abuse.”
Hotspots for abuse allegations include Chile, Zambia, and the Democratic Republic of the Congo (DRC).
BHRRC has released the report alongside the Transition Minerals Tracker, a tool to help investors, business and civil society groups explore the human rights risks associated with 37 companies mining materials for renewables technology.
Launched with support from the Ford Foundation, the tracker allows users to identify whether companies have human rights policies in place, and track where these companies have had human rights allegations raised against them, and what those allegations were.
The tool also includes reports from partner organisations detailing abuse allegations.