Report
Year: 2018
Publisher: Facing Finance
Funded by: Swedish International Development Cooperation Agency (Sida), Foundation Environment and Development North Rhine-Westphalia
Green technologies – such as wind power, solar energy and electric mobility – form the basis for achieving the goal set by the international community of limiting global warming to well below two degrees Celsius. However, low-carbon technologies require large quantities of raw materials, the extraction of which is often associated with social and environmental problems. This study finds that the extraction and processing of almost all of the raw materials needed for these technologies are associated with widespread human rights abuses and environmental pollution. Moreover, the extraction of some of these raw materials is highly concentrated in one producer country. As a result, by sourcing components that contain these raw materials, manufacturers of green technologies run a high risk of contributing to human rights abuses and environmental pollution. “Rare earths” from China are an example of this.
The research shows that neither legislators nor manufacturers of these technologies are taking sufficient action to reduce or eliminate these negative impacts along the supply chain of green technologies. In particular, the strong focus of legislation on the conflict materials tin, tantalum, tungsten and gold indicates that the extent of the controversies surrounding the extraction of raw materials is currently not sufficiently taken into account. Blatant violations of international human rights and environmental standards, such as in the mining of iron ore in Sierra Leone or cobalt in the Democratic Republic of Congo, are not taken into account in existing legislation.
But lawmakers are not the only ones who should be committed to making the energy and mobility transition sustainable in every way. Banks, in particular, have an important role to play in light of the recommendations of the EU Action Plan on Financing Sustainable Growth. However, this study clearly shows that the majority of German banks have not yet taken responsibility for sustainable supply chains, even though they are investing massively in green technologies. The study therefore documents relevant initiatives and recommends selected measures to make the transition to a low-carbon society as sustainable as possible.