The 2015 UN Conference of Parties Paris Agreement marked a significant turning point in global climate policy, creating a renewed sense of urgency around the energy transition. This shift has driven an intensified focus on those minerals and metals that are critical to renewable energy technologies. More recently, geopolitical developments have further accelerated efforts by countries and industrial value chains to diversify supply sources and strengthen strategic autonomy in raw materials.
At the same time, expectations regarding sustainable supply chains have increased substantially. Stakeholders—including regulators, customers, and investors—are placing greater emphasis on environmental, social, and governance (ESG) performance. As a result, producers and countries that are unable to demonstrate credible sustainability commitments risk exclusion from supply chains globally. Importantly, these commitments must be applied consistently over time and independent third party assured which is essential to ensure credibility, long-term investment certainty, and sustained improvements in performance across the value chain.
The nickel industry anticipated many of these challenges decades ago. As early as the 1980s, leading nickel producers recognized the need to better understand and manage the environmental and societal impacts of their operations, as well as to articulate the broader benefits of nickel to society. This led to the establishment of what is now the Nickel Institute (NI), which serves as the trusted voice of leading primary nickel producers and advocates for the sustainable and responsible supply of nickel.
Nickel plays a critical and highly diversified role across a wide range of applications. While its use in electric vehicle (EV) batteries has been the fastest-growing segment in recent years, nickel’s contribution extends far beyond electrification. Around two thirds of global nickel production is used to produce stainless steel. As an alloying element, nickel enhances its important properties such as formability, weldability and ductility, while increasing corrosion resistance in certain applications. For example, nickel-containing stainless steels significantly extend the lifespan of infrastructure such as bridges or buildings. Nickel is also integral to many renewable energy technologies and remains a key component in advanced alloys and innovative solutions. Maintaining stakeholder confidence in nickel therefore requires a proactive and credible response to ESG concerns.
Key ESG Considerations in Nickel Production
ESG discussions relating to nickel production typically focus on three main dimensions:
- Raw material extraction and processing methods
- Geographical context of operations
- Site-specific and company-level practices
Nickel and its compounds are classified as hazardous to human health and the environment, which presents specific regulatory and operational challenges. Potential exposure to workers and communities, as well as environmental emissions, can lead to significant impacts if not managed appropriately. These risks must be addressed consistently, regardless of the location of operations.
It is therefore imperative that nickel-producing companies fully understand the characteristics of the products they place on the market, assess associated risks, and implement robust management measures. The Nickel Institute plays a critical role in this regard, providing scientific data, technical expertise, and practical tools to support its members, the broader value chain, and regulatory authorities.
Beyond exposure and emissions management, several ESG issues are becoming increasingly central to stakeholder expectations:
- Greenhouse gas emissions, particularly given the energy intensity of certain production routes
- Biodiversity impacts, especially in regions with sensitive ecosystems
- Tailings management, which remains a key area of operational risk and scrutiny
These challenges are globally relevant, but their relative importance can vary depending on local conditions. For example, water management may be a critical concern in arid regions, whereas biodiversity protection may be more prominent in highly biodiverse geographies. The growing share of nickel production in Southeast Asia has further intensified attention on how regional conditions and production practices influence ESG performance.
Enabling a Sustainable Path Forward
Addressing ESG challenges in a consistent and credible manner requires alignment across methodologies, standards, and tools. In this context, downstream users, including OEMs, have an important role to play by actively assessing and comparing the ESG performance of their suppliers, and by favouring those that adhere to internationally recognised, science-based frameworks.
To support this objective, the Nickel Institute has developed Sustainability Guiding Principles applicable across the nickel value chain—from mining and production to downstream use.
The adoption of common frameworks, such as these, delivers several key benefits:
- Improved comparability of data across companies and regions
- Enhanced transparency for regulators, customers, and investors
- Stronger confidence in the sustainability of nickel supply
Wider adoption of common frameworks across suppliers not only improves comparability but also enables more informed and responsible sourcing decisions by downstream stakeholders.
By providing companies with robust and harmonized tools, these principles enable effective assessment, verification, and continuous improvement of ESG performance. They also help identify material risks and prioritize areas requiring further attention.
Importantly, the use of aligned methodologies reduces duplication of effort associated with multiple audits, assessments, and reporting requirements. This allows companies to allocate resources more efficiently, focusing on operational improvements rather than administrative burdens.
Conclusion
Nickel is indispensable to the global transition to a low-carbon economy. However, its long-term role depends on the industry’s ability to address ESG challenges in a structured, transparent, and credible manner. This includes ensuring that ESG expectations are applied consistently across the value chain by adhering to common principles.
Downstream users and OEMs are increasingly seeking reliable partners that can provide transparent, science-based evidence of their ESG performance. Producers engaged in recognised industry frameworks offer a higher degree of comparability, assurance, and accountability, which can facilitate responsible sourcing decisions.
As ESG expectations continue to rise, downstream stakeholders are encouraged to more systematically integrate these criteria into their supplier selection processes. Encouraging suppliers to align with recognised industry initiatives, including participation in organisations such as the Nickel Institute, can help ensure a common framework for assessing and improving sustainability performance across the value chain.
Through collective action, shared standards, and continuous improvement, the nickel value chain can reinforce stakeholder confidence and ensure that nickel remains a material of choice for sustainable technologies.
