ESG Standards and Practices of Chinese Companies in Critical Minerals Supply Chains
This report examines how Chinese companies are adapting to rising global sustainability expectations as demand for critical minerals grows. Drawing on a case study of nickel processing in Indonesia, the report highlights progress made by Chinese firms, the challenges they face in implementing environmental, social, and governance (ESG) standards abroad, and why alignment with international frameworks is becoming increasingly important for global supply chains and market access.
Policy Recommendations
-
Accelerate the alignment of mining ESG standards with leading global benchmarks and deepen multistakeholder coordination to improve consistency and credibility across the mineral value chain.
-
Introduce financial incentive schemes linked to verifiable ESG performance on a global scale, such as preferential credit terms, tax benefits, insurance advantages, or access to green finance instruments.
-
Develop bilateral technical cooperation mechanisms on ESG with key resource-rich countries to exchange regulatory information, align due diligence expectations, and build shared verification and monitoring capacities.
-
Help establish ESG research and training centres in strategic mineral-rich countries to enhance on-the-ground capabilities, support local institutional development, and reduce ESG-related project risks.
Critical minerals are crucial for the green and digital transitions. Given China’s significant role in global mineral value chains, improving its sustainability standards and performance could translate into significant social and environmental improvements across the entire sector.
This report examines the ESG practices and standards of Chinese critical mineral companies operating overseas. It finds that while Chinese companies have strengthened ESG practices in the mineral sector in recent years—including through improved supply chain risk management and due diligence—significant gaps remain compared to international best practices.
To close these gaps, the report provides a series of policy recommendations for the Chinese government. These include accelerating the alignment of its standards with leading global benchmarks on ESG in mining and establishing bilateral technical cooperation mechanisms and research centres with key resource-rich countries.
You might also be interested in
Toward a More Responsible Critical Minerals Supply Chain Supporting Indonesia’s Energy Transition
Evidence-based policy brief on environmental, social, and governance (ESG) standards for Indonesia's nickel industry to support a responsible energy transition.
Global Market Report: Coffee and sustainability
This Global Market Report examines coffee production, trade, and consumption trends alongside the growth of sustainability-certified coffee.
From Voluntary to Binding
This report examines how sustainability standards and initiatives are integrated into public mining governance, from voluntary to mandatory use, with case studies from Brazil, Madagascar, and Sweden.
Smallholders and the European Union Deforestation Regulation
This report examines smallholders’ compliance challenges related to the European Union Deforestation Regulation and identifies pathways to support their continued inclusion in deforestation-free supply chains.