RMI Releases Report on Responsible Mineral Supply Chains, Highlighting Need for Human Rights and Environmental Protection
RMI presents key strategies to bring increased transparency to mining practices for minerals, especially those required for the renewable energy transition.
Boulder, CO – November 17, 2022
RMI, founded as Rocky Mountain Institute, today releases a report urging mineral industry leaders to holistically account for and monitor how minerals — such as aluminum, cobalt, and lithium — are produced and sourced around the world. The goal is to hold global markets accountable for the ecological and social impact of mineral extraction and create markets where commodities can be differentiated based on their sustainability characteristics.
The new report, Supply Chain Traceability: Looking Beyond Greenhouse Gases, arrives promptly after international discussions around the “just” energy transition at the annual United Nations’ Climate Change Conference, COP27, and a forecasted increase in demand for critical battery minerals. In fact, just last week the White House announced a $30 million investment in critical mineral supply chains in Brazil, through the US International Development Finance Corporation, to support supply chain resilience for the renewable energy transition.
“Metals and minerals form the backbone of the energy transition. These are traded as commodities, but the way they are produced matters,” said Paolo Natali, principal at RMI and coauthor of the report. “Demand for battery materials, including aluminum, cobalt and lithium, is projected to grow sevenfold by 2030 compared with that in 2020. The social and environmental impact — from child labor to water pollution — of producing these materials should become part of our definition of sustainability, alongside greenhouse gas emissions. If left unchecked, they threaten to undermine the credibility of the climate movement.”
The report assesses which of the available models for tracing relevant impacts in supply chains are suited for social and environmental damages.
The report concludes that producers, buyers and investors, incentivized by new policies and supported by evolving performance standards and auditing technology, can jointly drive commodity differentiation based on sustainability characteristics. These include, but are not limited to:
- Greenhouse gas emissions
- Labor rights
- Local community impact
- Land displacement
- Biodiversity impact
- Water impact
“A just transition must be about more than just decarbonization,” said Stephen Lezak, report coauthor and fellow at RMI. “This is particularly important in the mining and metals sector, where the social and environmental costs of extraction are laundered away in complex supply chains. Commodity differentiation offers a path out of this status quo and toward a more sustainable and equitable future.”
The new report from RMI’s Climate Intelligence Program outlines the most pressing changes needed to catalyze the production of responsible commodities. These include the deployment and strengthening of product-level performance standards and improved access to technology and data-sharing platforms, alongside regulatory shifts.
“The energy transition requires restructuring how commodity markets work,” said Valentina Guido, senior associate at RMI and coauthor of the report. “This means creating transparency around the climate, ecological, and social impact of extraction.
“We need better traceability models to efficiently and transparently trace sustainability attributes along supply chains. We also need stringent regulation to hold market actors accountable and push them beyond current due diligence practices. We are working to create markets that reward socially and environmentally sustainable business practices, and hope that other important stakeholders will join us in this effort.”
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RMI is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous, zero-carbon future for all. We work in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing.