Triodos IM is committed to the renewable energy transition. Nickel is a critical metal for clean energy technology as it is used in batteries, which are essential for electric vehicles. Currently, there are pervasive negative environmental and social impacts in nickel supply chains. Mining operations have a destructive impact on ecosystems, caused by deforestation, soil erosion, water pollution, and high greenhouse gas emissions from the use of non-renewable energy in the refining process. Furthermore, the operations also negatively affect communities through labour exploitation, community displacement, indigenous right violations and damage to livelihoods. These negative impacts are mainly concentrated in Indonesia and the wider South-East Asian region and are caused by steeply rising global demand for nickel.

To ensure practices in the nickel supply chain are carried out in a way that is just and responsible towards both people and planet, Triodos IM applies environmental and social due diligence standards in line with the investor statement.

Triodos IM signed this investor statement because:

  • It is a call to action for companies active in the EV industry, and wider energy transition. Companies need to be proactive in ensuring that advancements in market uptake of electric vehicles and other green energy technologies do not take place at the expense of environmental and human rights protection.
  • Environmental impacts in the mineral supply chain of EV battery producers and EV manufacturers are often overlooked. We are concerned about these matters, and through this investor statement want to restate its commitment to environmental and social protection and to remain alert to downstream risks.
  • The statement is aligned with our existing minimum standards. Concerning responsible mining practices, we exclude companies active in the metals and mining industry that do not have global environmental management systems in place.
  • When it comes to social impact standards, we exclude companies at high risk of violation of human rights that do not take action to prevent and remediate human rights infringement risks in their business activities.Where relevant, we will continue to engage on and address these risks.

Triodos IM generally does not invest in or finance the mining industry per se, but we do invest in manufacturers in the transport sector that rely on batteries, and more broadly may invest in companies that focus on recycling metals and minerals, or companies that use these materials as inputs. As such, alternative sourcing of materials (through revalorisation of relevant by-product and waste-streams) are preferred. Where this is not possible, environmental and social due diligence standards must be in place instead.

The statement calls on companies EV battery manufacturers and automakers to commit to:

  • Incorporating responsible mining practices into mineral supply chain policies
  • Enhancing social and environmental due diligence, with increased disclosure and transparency.
  • Adopting a time bound commitment to have deforestation-free nickel supply chains.

In light of the pressing need for responsible practices in the nickel supply chain, both within the context of the EV industry and the broader energy transition, it is imperative that continued work on this topic applies stringent environmental and due diligence standards to avoid risks associated with critical resources, like nickel, and controversial methods, like deep sea mining. This can be further ensured through alignment with frameworks such as the EU’s Corporate Sustainability Due Diligence Directive (CDDD) to ensure a just and sustainable transition towards clean energy technologies.