The article from Fortune warns about the dark side of ESG investing that could undermine clean-tech strategies. ESG (Environmental, Social, and Governance) investing is increasingly popular as investors seek to align their investments with their values. However, as demand for metals rises to support clean-tech solutions, concerns are being raised about the social and environmental impact of mining these materials.
Mining for metals like cobalt, copper, and lithium, which are essential for the production of electric vehicles and renewable energy technologies, can have significant negative impacts on local communities and the environment. The article highlights how mining can displace people from their homes, pollute water sources, and damage ecosystems. Moreover, mining can be associated with human rights abuses, including child labor and forced labor.
The article argues that investors must consider these risks when investing in ESG funds. While many ESG funds exclude companies involved in controversial activities like mining, the author suggests that this is not enough. Instead, investors must take a more active role in engaging with companies and promoting sustainable practices.
The article concludes that there is no easy solution to the challenges posed by ESG investing’s dark side. Still, investors must be under no illusion about the impact of their investments and should seek to minimize harm while promoting positive change. Overall, the article serves as a reminder that ESG investing must go beyond simply excluding controversial companies and requires active engagement to achieve real sustainability.