Lithium-Ion Battery Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Lithium-Ion Battery market

Sustainable and responsible investments have become key trends in the current era, where investors, governments and the companies are trying to create an impact by setting off ESG policies.  The market, through its products, is contributing to sustainable development, thereby fulfilling the United Nations’ Sustainable Development Goals (UN – SDGs).

The lithium-ion battery market is valued at USD 41.97 billion as of 2021 and is expected to expand at a compound annual growth rate of 18.1% by 2030. The market is expected to expand with the increase in demand which is in-turn driven by the adoption of Electric Vehicles. The manufacturing and production of lithium-ion batteries have gained traction, mainly due to the increased consumption of fossil fuels and the rate at which they are depleting. The significant pollution caused by the usage of fossil fuel and the ever-increasing price of crude oil have led to an increase in the demand and manufacturing of lithium-ion batteries.

ESG Trends

Lithium-ion batteries, although used as an alternative source of energy by replacing fossil fuels, creates a significant negative impact from the manufacturing and disposing.  The batteries are made up of toxic nickel, copper, and lead materials which when improperly disposed, can lead to an environmental disaster and lead to explosions. The other concern with lithium-ion batteries is with the depletion of natural resources and the lack of recycling batteries at the end of their life cycle. Mining of raw materials required for manufacturing of the lithium-ion batteries deplete the fertility of the land, causing disturbance in the natural ecosystem.

The improper disposal of lithium-ion batteries has a significant impact on a community level among humans as well as among animals. The toxic chemicals present in these batteries causes respiratory problems among communities and creates dysentery and related health issues resulting from the salinization and contamination of water due to disposal of batteries reaching the end of their lifecycle.

Leading companies in the lithium-ion industry have begun participating in recycling programs to reduce the negative health impact resulting from the disposal of waste lithium. An American company has adopted the method of combining pyrometallurgy- hydrometallurgy to remove plastic and other wastes from the disposed product and soaking lithium ions in an acidic solution to dissolve the harmful metals. They have further initiated a “closed-loop” process, where the company retrieves the battery and then recycles it and uses the same recycled raw material to create a new product.

Growth of Lithium-ion Battery Market:

At an international level, there is no proper regulation that guides the market, in terms of environment and social. However, in the recent past, the European Union and countries such as the USA, and China, where multiple regulations have been made to guide the companies in the relevant market. Regulations such as the Mercury Containment and the Battery Management Act mandates companies to accept and recycle the used batteries along with the law such as Resource Conservation and Recovery Act, which deals with safe disposal of the hazardous solid waste such as dead lithium-ion batteries.

One of the aspects of EU regulations is that it has introduced a “battery passport”, which contains the details of the recycled battery, informing the consumer of the contents and manufacturing origin as well as the impact of the battery on the environment.

Despite the challenges, the lithium-ion battery industry is reaching a higher value in terms of economy, placing itself as an alternative reliable market for fossil fuels.

Key Companies in this theme:

    • Contemporary Amperex Technology Co. Limited

    • SKI innovation

    • Samsung SDI

    • BYD, Ltd

Scope of the Lithium-Ion Battery Industry ESG Thematic Report:

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Lithium-Ion Battery Industry ESG Thematic Report:

    • Offers a global perspective of the Lithium-Ion Battery industry and the policies and measures taken by the players as well as the governments.

    • Key insights into the sustainability practices of major players in the market.

    • A brief on risks and challenges faced by the players in the industry while implementing and executing ESG policies.