A new investigative report has exposed a troubling reality behind the green energy transition: the massive flow of finance into mineral extraction is fueling environmental destruction and human rights violations. While these minerals are critical for technologies like solar panels, electric vehicles, and batteries, the financing models supporting their extraction are falling far short of ethical and ecological safeguards.

The report, compiled by the Forests & Finance coalition, warns that unless financial institutions radically reform how they fund transition mineral mining, they risk entrenching a high-risk model that contradicts global climate and nature objectives.

A Contradiction at the Heart of the Energy Transition

According to Maurício Angelo, executive director of the Mining Observatory, the mining industry is paradoxically both a major contributor to the climate crisis and now a central player in the global energy transition.

“Mining is one of the main causes of the climate crisis and now presents itself as part of the solution without fundamentally changing how it operates. This contradiction cannot be ignored any longer,” he stated.

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This tension between environmental necessity and destructive practice is laid bare in the report’s findings, which show that the financial sector is pouring vast sums into mining operations while ignoring the social and ecological costs on the ground.

Trillions Invested, Few Safeguards

Between 2016 and 2024, leading global banks provided approximately $493 billion in loans and underwriting to companies engaged in mining transition minerals. Investors, in parallel, held over $289 billion in stocks and bonds across the sector. These financial flows came primarily from institutions based in the United States, Australia, the United Kingdom, Japan, and Brazil.

Yet across the top 30 institutions directing this capital, the report found that environmental, social and governance (ESG) policies were “dangerously weak.” Most lacked enforceable standards or oversight mechanisms to prevent environmental degradation or the violation of Indigenous rights.

Mines Overlapping Indigenous Lands and Biodiversity Hotspots

Alarmingly, the report notes that nearly 70 percent of all transition mineral mines are located on or near Indigenous or peasant territories. More than 70 percent are also situated in regions classified as high in biodiversity areas that are already under significant strain from climate pressures, deforestation, and habitat fragmentation.

These overlaps are not coincidental but rather symptomatic of a global financing system that disregards the voices and rights of frontline communities in pursuit of minerals deemed essential for decarbonization.

Evidence from the Ground: A Global Pattern of Harm

Through case studies spanning Australia, Brazil, Indonesia, and the Democratic Republic of Congo, the report documents a litany of abuses tied to mining operations. These include widespread deforestation, toxic pollution, labor exploitation, forced displacement of communities, and the building of new coal plants to support extraction activities.

In one of the more devastating findings, researchers linked mining operations to the collapse of tailings dams—structures that hold mining waste which have resulted in fatalities and severe environmental disasters. These real-world impacts are compounded by the absence of meaningful oversight in the way mining is financed.

A Call for Structural Change in Finance and Regulation

The Forests & Finance coalition is now urging governments to take decisive action. Key recommendations include embedding environmental justice and human rights protections into financial regulation, enforcing corporate transparency standards, and establishing mandatory due diligence frameworks that would hold both companies and financiers accountable.

The report also demands a major overhaul in how banks and investment firms engage with the mining sector. Institutions should actively exclude companies involved in deforestation, ecosystem degradation, and rights abuses. Moreover, they should integrate respect for international human rights law into all stages of the investment process.

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A Just Transition Requires Responsible Finance

Stephanie Dowlen, forest campaigner with the Rainforest Action Network, summarized the urgency of the findings. “This should be a wake-up call for every policymaker, banker, and investor,” she said. “You cannot build a just energy future by trampling rights, displacing communities, and torching biodiversity. A just transition demands finance that stops rewarding corporate impunity.”

The report makes clear that while minerals are essential for clean energy infrastructure, the method of their extraction and the financial systems enabling it must evolve. Without stronger safeguards, the green transition risks becoming a new chapter in environmental and social exploitation, rather than a solution to it.

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