The global demand for critical minerals is reshaping geopolitics, economic competition and the sustainability agenda. These minerals underpin the transition to renewable energy and digital infrastructure—both central to achieving the United Nations Sustainable Development Goals (SDGs). Securing their supply has contributed significantly to tension, conflict and environmental degradation. The challenge lies not only in ensuring availability, but integrating environmental, social and governance (ESG) principles to mitigate risks and maximize benefits for all stakeholders.
ESG and the critical minerals supply chain
Critical minerals are fundamental to decarbonization and digitalization. Lithium, cobalt and nickel power batteries for electric vehicles and renewable energy storage. Rare earth elements are essential for wind turbines, solar panels and advanced computing. Copper remains indispensable for electrification while elements such as tin and tantalum drive technological innovation. Yet, the supply chains for these minerals are often marred by exploitative labor practices, environmental degradation and community displacement.
An ESG-aligned approach to mineral extraction and processing provides a pathway to address these concerns. Companies, investors and governments can explore collaborations that establish transparent and ethical supply chains to ensure extraction respects human rights, safeguards biodiversity and promotes inclusive economic growth.
Governance, due diligence and ethical sourcing
The regulatory landscape for critical minerals is evolving rapidly to integrate ESG considerations. The European Union’s Conflict Minerals Regulation and the U.S. Inflation Reduction Act have introduced stricter due diligence requirements, pushing for responsible sourcing and domestic processing. An increasing number of countries from Indonesia to Namibia are implementing policies to ensure more value is captured locally, reducing dependence on raw material exports and promoting industrial development.
Investors and multinational corporations must enhance their human rights due diligence to ensure sourcing practices align with international frameworks such as the UN Guiding Principles on Business and Human Rights. Sustainable financing mechanisms, including green bonds and impact investment funds, can incentivize responsible mining and processing practices.
Addressing geopolitical and environmental risks
The concentration of critical mineral reserves and processing capacity in a handful of countries exposes global supply chains to geopolitical risks. China dominates rare earths processing, while the Democratic Republic of Congo (DRC) supplies 70 percent of the world’s cobalt, often under precarious conditions. Recent disputes over mineral access coupled with export restrictions and geopolitical rivalries have heightened the urgency of diversifying supply sources and investing in recycling technologies.
The environmental impact of mining cannot be overlooked. Extractive activities contribute to deforestation, water contamination, and soil degradation, undermining local ecosystems and community resilience. ESG aligned policies prioritize circular economy models that foster resource efficiency through mineral recovery, urban mining and material substitution to reduce dependency on primary extraction.
A just transition
For the transition to a low-carbon economy to be truly sustainable, it must be inclusive. Mining communities, particularly in emerging economies, must benefit from responsible resource governance. Capacity-building initiatives, equitable revenue-sharing mechanisms and participatory decision-making can ensure that mineral wealth translates into long-term social and economic gains.
Genuinely sustainable mining initiatives should integrate climate resilience strategies that safeguard water resources and rehabilitate degraded landscapes. Companies committed to ESG excellence must engage with Indigenous communities, uphold labor rights and adhere to free, prior and informed consent (FPIC) principles.
The road ahead
The critical minerals boom presents opportunities and a challenges. Stakeholders can navigate supply chain vulnerabilities while advancing the SDGs by embedding ESG principles into extraction, processing and trade. Governments, businesses and civil society must collaborate to foster resilient, transparent and sustainable mineral supply chains. This is not only a moral imperative, but a strategic necessity for a just and green transition in the 21st Century.
Christopher Burke is a senior advisor at WMC Africa, a communications and advisory agency located in Kampala, Uganda. With nearly 30 years of experience, he has worked extensively on social, political and economic development issues focused on extractives, environmental issues, land governance, agriculture, advocacy, communications, conflict mediation and peace-building in Asia and Africa.
