The booming trade of electric batteries for smartphones and electric cars is being accompanied by a hidden human toll and environmental damage.
So say a group of businesses, international organisations and NGOs, who are now joining forces to up the effort to eliminate child labour, hazardous working conditions and environmental destruction behind the fast-growing market for batteries that power smartphones, gadgets, electric vehicles and renewable energy storage systems in households and cities.
Under the name Global Battery Alliance, the collaboration is an effort across industries – from the mining and chemical sectors to manufacturers, electronics, automotive and energy businesses – and includes the likes of Volkswagen, Trafigura Group, the OECD, Unicef and the African Development Bank. It is being launched today at the World Economic Forum (WEF) Sustainable Development Impact Summit 2017.
Due to growing consumer demands and a move towards a low-carbon economy, the WEF says the battery market is likely to reach US$100bn by 2025. Bloomberg, meanwhile, predicts that batteries installed in homes and businesses will account for 57% of the world’s energy storage capacity by 2040.
But a growing demand comes with an enormous human and environmental cost: Amnesty International, for one, has raised concerns about the prevalent use of child labour in the mining of cobalt, which is used to power mobile phones, laptop computers and other portable electronic devices. The WEF also highlights materials such as lithium, nickel, manganese and graphite, which have been linked to pollution, water shortages and other environmental and social concerns.
“The phones may be smart, but the system is certainly not sustainable,” says Dominic Waughray, head of public private partnerships at WEF. “All the electronic waste we discarded in 2014 was worth US$52bn. It contained 300 tonnes of gold and significant amounts of silver and palladium. To get these rare minerals and metals, many poor people are paying a terrible cost, as is the environment.”
Waughray tells GTR that the group has been preparing for the launch other the past year, having consulted local and regional actors across the battery supply chain as well as mapping the key issues and problems they are looking to solve. The group will now spend the next few months finalising their research, which will culminate in a report in January and include action points and areas on which the alliance can focus more closely in the year ahead.
He notes that the activities will likely require financial commitments, which could possibly be mobilised by organisations such as development banks and agencies.
One of the geographies the collaboration will be focusing on is the Democratic Republic of Congo (DRC), a country that is at the centre of the conflict minerals rules outlined in the US’ 2010 Dodd Frank Act. The rules impose mandatory supply chain due diligence and annual reporting obligations for US companies using what has been dubbed 3TG minerals (tungsten, tantalum, tin and gold), which have been linked to armed conflict in the DRC. Despite US President Donald Trump’s promise to suspend the law, big tech companies such as Apple, Intel and HP have said they would continue to uphold the high standards, regulated or not.
This growing corporate attention illustrates the important business case for ensuring responsible supply chains and respecting human rights and the environment. A failure to do so could not only have legal repercussions, it could also negatively affect a company’s reputation, shares and operational performance.
Meanwhile, impact investment – namely investment into companies that have a positive social or environmental impact – is rising in popularity. Speaking to GTR for its upcoming Q4 publication, Giles Hedley, a Johannesburg-based investor relations officer at Barak Fund Management, said the company’s impact investment fund has received significant interest over the last year.
But despite a growing awareness, research suggests that many firms are still underestimating the risk. A recent study by the Economist Intelligence Unit (EIU), which surveyed business executives from companies around the world, found a “worrying degree of complacency on the part of business” when it comes to tackling supply chain issues on climate change, gender balance and human rights. For example, only 22% are addressing child labour concerns; yet only 2% thought their companies had irresponsible supply chains.