Report highlights human rights blind spots in critical minerals financing

Europe’s banks and investors are pouring nearly €8 billion a year into critical minerals activities to support the energy transition, but lack sufficient safeguards against human rights violations according to a new Oxfam report.

An analysis of the eight largest EU banks and investors has found that banks provided €64 billion in loans and underwriting services to mining companies extracting critical raw materials, such as lithium, copper, nickel and cobalt, while investors hold €15 billion in bonds and shares in mining companies. 

While this is good news for Europe’s energy future, as these metals are crucial for electrification and a clean energy future, critical raw materials supply chains are often linked with land grabs, pollution and human rights violations. Investors are not doing enough to prevent these issues, and European legislators are now weakening rules that would have mandated greater due diligence as part of the sustainability Omnibus.

Insufficient human rights policies

“The rush for critical minerals is often seen as the building blocks for green energy, but their supply chains are rife with pollution and social conflict. This is not about a few bad apples, but rather a system that allows Europe’s financiers off the hook as the rules are too weak. Not only does this result in human rights and environmental abuses, this also exposes European banks and investors to financial and reputational risks,” says Kees Kodde, Oxfam and Fair Finance International Project Lead.  

According to Oxfam, Fair Finance International and 11.11.11, all of Europe’s top banks and investors – including BNP Paribas, Crédit Agricole, Société Générale, ING, and Banco Santander – scored between 2.6 and 4.0 out of 10 in terms of environmental and human rights safeguards.

Dutch pension fund ABP was the top performer but still only scored a 4.0, while Crédit Agricole (EU’s largest investor in mining companies), Allianz (the second largest) and Spanish Bank BBVA all scored below 3.

Financing linked to violations in the DRC, Peru, Mozambique and Brazil

The report identifies several potentially problematic financing relationships between EU investors and critical minerals mining companies. 

In the DRC, Allianz, BNP Paribas and Crédit Agricole have “invested millions” in the mining companies that own the vast Kamoa-Kakula copper and cobalt mine despite reports of land grabs, polluted water and resettlement sites without clean water and with unfarmable land, Oxfam says. 

Similarly in Peru, Allianz, Deutsche Bank and ING are financing partners to Glencore, the company operating the Antapaccay copper mine, which has been found to pollute air and waterways with toxic chemicals, causing respiratory problems for nearby residents and livestock deaths. 

In Mozambique, European investors fund the Balama mine, which supplies graphite for EV batteries used for charging electric cars, yet communities in the area have reported having to leave their homes and farms without fair compensation.  

And in Brazil, BNP Paribas owns shares in Sigma Lithium, which is accused by residents of having diverted their only source of water without consent or explanation.

“Europe’s clean energy transition is being financed at the expense of its sustainability track record, and the EU is also weakening the very safeguards meant to prevent this. Ignoring human rights is not just unjust, it is also bad business. Social unrest can shut down mines, disrupt supply and make Europe’s energy transition more expensive. The green transition requires responsible financing, not blind investment”, said Femmy Thewissen of 11.11.11.