Raw Materials Pose ESG Challenge for EV Industry

Two experts on mining industry governance explore environmental and social challenges around the mining of cobalt, a critical material in EV batteries, in the Democratic Republic of the Congo.
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This is the third episode in our series that explores governance challenges surrounding the transition to clean energy.

The International Energy Agency forecasts that electric vehicles could account for a third of the global new car market by the end of this decade. While the prospect of a growing fleet of EVs is good news for the climate, the emergence of electric vehicles raises its own set of sustainability challenges. One area of notable concern surrounds the raw materials that are used in EV batteries, which may be sourced from regions of the world where environmental and social governance are weak. This reality runs counter to the sustainable promise of the clean energy transition and has raised concern among clean technology companies, EV manufacturers, and ESG-minded investors.

David Manley and Hervé Lado of the Natural Resource Governance Institute explore the environmental and human realities surrounding the production of one such material, cobalt, which is an essential element in the lithium-ion batteries that power most electric vehicles. The majority of cobalt is produced in the Democratic Republic of the Congo, an impoverished and environmentally sensitive country that has attracted attention as demand for cobalt has grown. Manley and Lado discuss efforts to improve oversight of the cobalt value chain, and what’s potentially at stake for the clean energy transition, and economies that are dependent on raw materials production, should ESG concerns not be adequately addressed.

David Manley is a senior economic analyst with the Natural Resource Governance Institute. Hervé Lado is NRGI’s West and Central Africa regional manager.

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Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu

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