The Globe and Mail reports in its Thursday edition that lithium-ion batteries contain cobalt, the material needed to power our new technologies. Guest columnist Martin Grosskopf from AGF Management says that these batteries are used in smart phones and electric vehicles, and are labelled "blood batteries" because they are sometimes mined by children and other locals in unsafe conditions in the Democratic Republic of the Congo. The misery in which these so-called artisanal miners work has thrust cobalt mining in the Congo into the international spotlight. The issue is also raising vexing questions for those with an interest in responsible investing. There seems to be a larger issue at play here for investors. Among the key tenets of so-called impact investing is the desire to produce beneficial social or environmental outcomes that would not be possible without the investment. While existing players have entrenched business models and broad index representation, companies in emerging supply chains are inherently more volatile and attract fewer truly engaged shareholders. Responsible investors are recognizing that they will need to transfer an increasing proportion of their risk budget from entrenched to emerging players.
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