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- 29 investors with US$ 1.2 trillion in combined assets under management, have signed a statement demanding companies to enhance their environmental and social due diligence in nickel supply chains of the electric vehicle (EV) industry.
- They are calling for the incorporation of responsible mining requirements into their mineral supply chain policies.
- Companies should adopt a time bound commitments to have deforestation-free nickel supply chains.
The energy transition will require critical minerals like copper, lithium, nickel, cobalt and bauxite. Nickel is a transition mineral used to produce the cathode material of lithium-ion batteries, which are used to power electric vehicles. The single-largest growth in the demand of nickel in the next two decades is expected to come from the electric vehicle (EV) industry.
At the same time, a rising number of reports on the negative environmental and social impacts of nickel mining activities in Southeast Asian countries, including Indonesia and the Philippines, have worried investors. Common issues include deforestation, water and air pollution, conflicts with and biodiversity loss. Now 29 investors have signed a statement initiated by the Dutch Association of Investors for Sustainable Development (VBDO) and Rainforest Foundation Norway, to incorporate responsible mining practices and higher standards for environmental and social impact in nickel supply chains. DNB Asset Management: ‘The energy transition also requires nickel, but we as investors must contribute to it being supplied in a responsible manner.’
Among others, investors expect automakers and EV battery manufacturers to introduce requirements for Free, Prior, and Informed Consent (FPIC) of Indigenous Peoples and local communities in mining operations, as well as to include third-party, independent auditing using transparent social and environmental standards during risk and impact assessments of mining and refining sites.
Eric Uijen, chairman of the executive board of PME Pensioen: ‘We acknowledge the importance of the EV-industry for the energy transition. At the same time, companies that depend on minerals for their products should adhere to social standards and respect the rights of Indigenous Peoples and local communities, also in their supply chains. Therefore, PME calls for responsible mining practices in the nickel industries and we will engage companies within our investment portfolio on this issue.’
Angélique Laskewitz, executive director of VBDO explains: ‘Environmental impacts are often overlooked in the downstream mineral supply chain policies of EV battery producers and EV manufacturers. The requirement to respect the rights of Indigenous Peoples, as recognised in the UN Declaration on the Rights of Indigenous Peoples, is also often neglected. We don’t just need an energy transition, we need a responsible one. We expect companies to conduct enhanced due diligence for biodiversity, pollution, and climate change. Furthermore, we expect companies to respect the rights of Indigenous Peoples and local communities, as well as to adopt a time bound commitment to have deforestation-free nickel supply chains.’
Tørris Jæger, Executive Director, Rainforest Foundation Norway (RFN): ‘The financial sector plays a key role in promoting responsible extraction of transition minerals to combat climate change. While the transition towards clean energy is urgent, the sourcing of minerals must safeguard the rights of Indigenous Peoples and local communities and avoid and minimise damages to critical ecosystems like rainforests. By setting clear expectations, financial institutions can push companies to adopt responsible practices. Through collaborative engagement, investors can drive positive change, mitigate risks, and contribute to achieving climate and nature goals. We welcome and congratulate all investors joining this initiative.’
The initiative is being supported by several national and international NGOs, including Earthworks, Transport and Environment (T&E), Mighty Earth, Madani Berkelanjutan, Auriga, Fern, Climate Rights International, Forest Watch Indonesia, Satya Bumi, IUCN NL, and AidEnvironment.
