Why in news?
The United Nations Environment Programme released a report titled “Financing the Responsible Supply of Energy Transition Minerals” in October 2025. The report warns that unregulated mining of minerals like lithium, cobalt and nickel—critical for batteries and renewables—could cause social and environmental harm. It urges financial institutions to link investments to responsible practices.
Context
The transition to clean energy requires massive quantities of metals for electric vehicles and renewable energy infrastructure. Mining projects are capital intensive, giving investors significant leverage over environmental and social standards. Yet many mining operations operate in fragile ecosystems, exploit labour and generate toxic waste. Past tragedies, such as tailings dam collapses, highlight the need for stronger oversight.
Recommendations of the report
- Sustainable finance standards: Banks and investors should adopt guidelines linking lending to adherence to human rights, biodiversity protection and community consent.
- Demand management: Governments should emphasise recycling, material efficiency and circular economy strategies to reduce the need for new extraction.
- Exclusion zones: Projects in protected areas and Indigenous lands should be avoided or subject to strict scrutiny.
- Artisanal mining: Formalising and supporting small‑scale miners can improve safety and livelihoods while reducing illegal operations.
- Transparency and reporting: Mining companies should publish gender‑disaggregated data on social impacts and disclose tailings management plans. Investors could support a global tailings database.
Importance for India
India has ambitions to build domestic battery manufacturing and is exploring lithium deposits in Karnataka and Rajasthan. Following UNEP’s guidelines can help attract ethical investors and prevent environmental damage. Policymakers should design incentives for recycling e‑waste and require strict environmental, social and governance (ESG) reporting from miners. Sustainable mining will be vital to ensure that the green transition does not create new injustices.