The impacts of environmental, social and governance (ESG) issues in achieving sustainable lithium supply in the Lithium Triangle

Abstract

The electrification transition will intensify the demand for lithium. The endowment in the Lithium Triangle is significant, and the expectations for the global supply are high in terms of resources and sustainability. In this paper, we investigate the impact of environmental, social and governance (ESG) challenges to the future of sustainable lithium extraction. We undertook a qualitative analysis to prioritise the risks associated with these challenges and discussed their interlinkages. We argue that a sustainable perspective for lithium extraction in the region requires continuous and informed dialogue among government, industry and community stakeholders and participatory processes that reduce the asymmetries of power and knowledge. We provide a list of urgent mitigation actions that could assist the move towards sustainability. These include the following. First is expanding our understandings of the water cycle of lithium brines in this region. This should be underpinned by baseline data and ongoing monitoring at the watershed scale, capacity building to strengthen institutions, improved regulations and data infrastructures to promote data transparency and accessibility. Second is integrating biodiversity impacts within existing mining practices and procedures (e.g. Environmental Impact Assessments — EIA). We propose the strategic implementation of the mitigation hierarchy and IFC’s Performance Standards to avoid, reduce and offset the risks of lithium extraction on ecosystem services and critically important biodiversity impacts. Third is strengthening social participatory processes that enable the local communities to become actors in decision-making and the ongoing management and monitoring of lithium projects. Fourth is establishing a framework to support a Strategic Environmental and Social Assessment (SESA) process specific to lithium with a regional approach in the Lithium Triangle.