“The finance sector can play a critical role in promoting responsible mining, particularly in the context of the rising demand for energy transition minerals such as lithium, cobalt, and rare earth elements.” This is according to a new report published by the UN Environment Programme’s (UNEP) International Resource Panel (IRP).

Titled, ‘Financing the Responsible Supply of Energy Transition Minerals for Sustainable Development,’ the report examines the prospective future demand for a subset of minerals that are important to the transition away from fossil fuels.

According to a UNEP press release, 2023 saw increases of between 8% and 15% in the demand for nickel, cobalt, graphite, and rare earth elements, while demand for lithium is projected to be equivalent to nine times the 2022 world production by 2050. The report finds a substantial increase in investment in the mining and processing industries will be essential to ensure these critical transition minerals can be supplied at scale.

The report warns about negative social and environmental impacts on local communities, if growth in mining is implemented using current mainstream practices, and identifies “issues that will need to be addressed if the low-carbon energy transition is to be supplied with the minerals it needs in a timely way and responsible manner.”

The report calls for greater focus on environmental, social, and governance (ESG) issues and for responsible mining practices that secure a sustainable development license to operate. It also highlights:

• Circular economy strategies and enhanced resource efficiency as essential to managing the demand for primary minerals;
• The importance of sustainable finance that takes social and environmental, as well as financial, outcomes into account;
• The need to prioritize improving security, skills, working conditions, miners’ incomes, and gender equality in all mining, especially in artisanal and small-scale mining;
• The role of mutually beneficial partnerships between the communities and countries that host the mines and the importing and processing countries in addressing concerns about geopolitical security of transition minerals supply chains, based on the equitable sharing of benefits; and
• The role of international collaboration and potentially new international, multilateral institutions in facilitating the responsible supply of energy transition minerals.

The report makes specific recommendations in five areas: improving transparency, reporting, and local engagement; incentivizing higher mineral recovery and recycling rates as part of the circular economy; improving the management of mineral markets and building stronger national institutions; reforming the financial system, including financial taxonomies, architecture, and instruments; and considering establishing international institutions.

Launched on 9 October 2025, the report will contribute to the work of the UN Secretary-General’s Panel on Critical Energy Transition Minerals, the 2024 commitment by the International Council of Minerals and Metals (ICMM) to “nature-positive mining,” and the resolutions on minerals at the seventh session of the UN Environment Assembly (UNEA). [Publication: Financing the Responsible Supply of Energy Transition Minerals for Sustainable Development] [Publication Landing Page] [UNEP Press Release]