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Greenwashing Africa’s “green” metals

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Are you painting the ideal picture pf your company’s environmental and social impact? Image credit: Dawid Zawila from Unsplash

Greenwashing Africa’s “green” metals

Businesses will soon have to substantiate their environmental claims across the entire supply chain.

By Claire Tucker

According to the World Bank, the production of critical minerals essential for renewable energy technologies, such as solar panels, wind turbines, and electric vehicles, is poised to increase by up to 500% by 2050.

Over three billion tons of minerals and metals will be required to achieve a net-zero future, and with Africa being home to 30% of the world’s mineral deposits, the continent’s strategic advantage in the global push for sustainable energy solutions is becoming increasingly significant.

The Democratic Republic of Congo (DRC), for instance, produces over 70% of the world’s cobalt, a vital component in battery technology.

Additionally, the DRC and Zambia are key suppliers of copper, contributing 10% to the global market, while nations like Mozambique and South Africa hold substantial reserves of graphite, platinum metals, lithium, and more.

Greenwashing Africa’s “green” metals

We expect the journey to net-zero to focus not only on the inputs necessary to power the technologies of the future, but also on the supply chain for these inputs.

This could see green metals and the processes used in mining these metals squarely in the spotlight. Historically, EU policies have often spearheaded trends that set a global direction, and this latest legislation is likely to follow a similar trajectory.

There have been a series of developments by the European Parliament which will put the spotlight on these practices. In June 2023 a draft European Supply Chain Act was supported which requires EU companies to carefully manage environmental (and social) impacts along their entire value chains, including direct and indirect suppliers, their own operations, as well as products and service.

This will require the identification of actual or potential negative impacts on human rights and the environment. Then the taking of appropriate measures to prevent, mitigate and remedy them.

On January 17, 2024, the European Parliament approved new legislation aimed squarely at curbing greenwashing.

This directive represents a shift in sustainability-linked regulation, setting stringent criteria for businesses to substantiate their environmental claims across the supply chain.

Terms like ‘environmentally friendly’, ‘biodegradable’, and ‘climate neutral’ will require concrete evidence and previous practices such as offsetting will no longer be allowed.

Misleading marketing

These developments are likely to see increased scrutiny along the value chain of EU companies making ‘green’ and ‘net-zero’ claims, even leading to the examination of the mining practices of the green metals supporting net-zero technologies.

This move by the European Union (EU) not only protects consumers from misleading marketing but also propels companies towards more genuine and verifiable sustainable practices.

We expect these practices to become standard in developed markets which, by necessary implication, will impact suppliers in Africa.

Reevaluating the green metals supply chain

For Africa to fully capitalise on these emerging opportunities, a comprehensive re-evaluation of the entire green metal supply chain is essential, ensuring that every step, from extraction to export, aligns with the evolving global sustainability standards.

This necessitates a paradigm shift in how boardrooms approach environmental, social, and governance (ESG) factors, recognising that these considerations are no longer peripheral issues but central to business resilience and market access.

For miners and extractive companies, for example, this means going beyond compliance, adopting practices that minimise environmental impact, and ensuring sustainable resource use.

It involves the rigorous adherence to ethical labour practices and active community engagement, ensuring that mining activities contribute positively to local development.

For processors and manufacturers within the supply chain, ESG mandates a commitment to reducing carbon footprints, implementing waste reduction strategies, and ensuring ethical sourcing of materials.

Governments have the responsibility to create an ecosystem that supports, incentivises, and holds accountable these sustainable practices across the green metals supply chain.

This can involve a range of policies from tax incentives for companies using recycled materials, to stringent regulations on waste management and emissions for processors and manufacturers.

Crucially, this also includes establishing legislation that mandates transparent reporting and disclosure, ensuring that businesses provide accurate and comprehensive information about their sustainability practices.

Supporting this would be the international implementation of the IFRS Sustainability Disclosure Standards, which will significantly reshape reporting practices in the green metals supply chain.

Comprising IFRS S1 and IFRS S2, these standards mandate comprehensive disclosures around governance, strategy, and performance related to sustainability risks and opportunities, including specific climate-related factors.

Africa can lead

Most importantly, Africa need not be just a player in the global green claims and green metals discourse; it has the potential to be a leader.

However, this leadership requires more than abundant resources; it requires a continent-wide commitment to combatting greenwashing and a seat at the global decision- making table.

For Africa to truly steer the course of the evaluation and reporting on green claims in the green metals supply chain, there must be collaboration among its nations to develop and enforce a uniform set of regulations and legislation.

These unified standards across the continent would enable Africa to dictate the terms of engagement in the global market, rather than merely adhering to externally imposed norms.

Such collaborative efforts would not only enhance Africa’s control over its valuable resources but also empower the continent to champion sustainable and ethical practices in mining and processing.

By establishing its own guidelines, Africa can ensure that its green metals sector thrives under policies that reflect its unique economic, social, and environmental landscapes.

This is the continent’s opportunity to assert its role, not as a follower, but as a frontrunner in the global green economy, setting a precedent for sustainable development and responsible resource management on its own terms.

Claire Tucker is Head of Public Law and Regulatory at Bowmans South Africa

Greenwashing Africa’s “green” metals

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 Greenwashing Africa’s “green” metals

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