Critical Minerals Series: Sustainability Considerations for Investors in Cobalt and Nickel Mining

• The transition to a more resilient energy sector largely relies on an increasing use of renewable energy sources and the adoption of new technologies. Both require extensive use of minerals, particularly critical minerals. Nickel and cobalt, being transition metals that provide high energy capacity, conductivity, and energy density, are both used in batteries, including electric vehicle (EV) batteries. 
• According to the most conservative scenario (STEPS) from the International Energy Agency (IEA), the global annual nickel demand driven by clean energy technologies will more than double from 2030 to 2050. Under the same scenario, the IEA projects that global annual cobalt demand driven by clean energy technologies will increase by roughly 16% from 2030 to 2050.  
• ISS data shows that sustainability issues, such as biodiversity loss, water pollution, human rights, and climate change, present potential risks to investors in nickel and cobalt mining companies. One way mining companies can improve their sustainability performance is through recycling materials and other circular economy strategies. 
• Institutional investors can benefit from having a better understanding of the sustainability profiles of the nickel and cobalt mining companies in their portfolios and help assess which companies are best positioned to manage sustainability risk and meet international global standards and regulations around responsible mining.   

This publication series from ISS STOXX’s Natural Capital Research Institute, in collaboration with colleagues across the sustainability research and product teams, examines the sustainability profile of mining companies. The series leverages data from various solutions, including the ESG Corporate RatingESG Corporate Rating, Biodiversity Impact Assessment ToolBiodiversity Impact Assessment Tool, Modern Slavery SolutionModern Slavery Solution, and Norm-Based ResearchNorm-Based Research. This second publication focuses on nickel and cobalt mining.

Explore ISS STOXX solutions mentioned in the report

• Identify ESG risks and seize investment opportunities with the ESG Corporate RatingESG Corporate Rating. 
• The Biodiversity Impact Assessment ToolBiodiversity Impact Assessment Tool helps investors assess the impact of companies’ business and supply chain activities on biodiversity. 
• Identify, evaluate and act on modern slavery risks and their impact on investments with the Modern Slavery SolutionModern Slavery Solution. 
• Assess companies’ adherence to international norms on human rights, labor standards, environmental protection and anti-corruption using Norm-Based ResearchNorm-Based Research.