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Ensuring responsible mineral supply chains in the renewable energy transition

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The shift towards renewable energy is heavily reliant on minerals like copper, cobalt, bauxite and lithium for technologies such as batteries, electric vehicles, and transmission networks. At the recent OECD Forum on Responsible Mineral Supply Chains, the crucial role of the mining industry in enabling this transition was underscored.

However, past experiences warn that a mining boom could exacerbate governance and corruption risks, potentially harming communities and the environment while hindering equitable distribution of resource wealth. Addressing corruption must therefore be integral to efforts aimed at strengthening responsible mineral supply chains for renewable energy.

In a collaborative initiative involving EITI, REN21, SSE Renewables, and Transparency International Australia, a roundtable discussion was held with industry players, transparency advocates, human rights NGOs, and intergovernmental organizations. Here are the key takeaways from the dialogue:

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  1. Ask the right questions: Companies need to prioritize anti-corruption measures alongside environmental and human rights considerations in supply chain due diligence. Guidance from the OECD and insights from civil society can inform robust risk assessments and mitigation strategies.
  2. Don’t let perfect be the enemy of good: While tracing mineral supply chains is challenging, companies can still build a foundational understanding and take steps to prioritize and mitigate risks, aligning with global standards like the UN Guiding Principles.
  3. Embrace collective action: Given the limited leverage of individual companies, collective industry action is crucial. Collaborations within the renewable energy sector and across industries can drive higher standards and performance in mineral supply chains.
  4. Be transparent: Transparency in reporting due diligence efforts enhances accountability. There is a need for improved disclosure practices among renewable energy companies, akin to transparency standards seen in other sectors.
  5. Engage in multi-stakeholder dialogue: Dialogue with civil society and governments fosters transparency and accountability. Multi-stakeholder initiatives, such as those seen at COP28 and in the Netherlands, play a vital role in promoting sustainable practices across the sector.

As renewable energy deployment scales up to meet climate goals, ensuring responsible mineral sourcing becomes paramount. By integrating robust due diligence practices, renewable energy companies can contribute to sustainable development and support a just transition in mineral-rich regions worldwide.

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