The energy transition relies on securing critical raw materials (CRMs), but supply chains are fragile, opaque and shaped by geopolitical and regulatory pressures. At the recent event co-hosted by the World Resources Forum, Glencore and Zug Commodity Association in Zug (Switzerland), experts from industry, policy and research explored the evolving role of commodity trading and extractives in this transition.
The energy transition is fundamentally dependent on commodities. From the copper wiring in wind turbines to the lithium powering electric vehicle batteries, critical raw materials (CRMs) form the essential building blocks of a low-carbon economy. Yet, securing a stable and responsible supply of these materials presents a significant challenge. Global supply chains are increasingly shaped by geopolitical shifts, regulatory pressures, and market volatility, while concerns over transparency and sustainability add further complexity.
Against this backdrop, the recent WRF-ZCA-Glencore event brought together experts from industry, policy, and research to examine the evolving role of commodity trading and extractives in the energy transition. The discussions underscored the urgency of balancing supply security with sustainability commitments, the pivotal role of traders in ensuring transparency, and the need for businesses to go beyond compliance to remain competitive in a rapidly shifting landscape. A few key messages stood out:
Fragile Supply Chains & Growing Risks
The global supply chains for CRMs are vulnerable. Geopolitical tensions, regulatory shifts, and market volatility can disrupt access to essential materials in an instant. This fragility isn’t just an abstract risk—it has real-world consequences for industries and economies worldwide.
China dominates many stages of CRM processing, making Western economies dependent on a single source for key materials. At the same time, the EU is attempting to secure its own supply through stricter regulations, while the U.S. is favoring domestic incentives. Neither approach is proving entirely effective.
Add to this the opaque nature of CRM markets, where quantities are small, pricing can be unpredictable, and a handful of players wield disproportionate influence, and it becomes clear: businesses cannot navigate this alone. Governments have a crucial role to play in leveling the playing field, increasing transparency, and mitigating supply risks.
Traders: The Hidden Influencers
Commodity traders often work behind the scenes, but their role in ensuring the smooth flow of resources is essential. With unique visibility into global supply chains, traders are positioned to anticipate disruptions, optimize flows, and enhance market transparency.
As one speaker from Glencore pointed out, when everything is running smoothly, the work of traders often goes unnoticed. But when volatility hits—whether due to sanctions, logistics breakdowns, or geopolitical crises—traders become essential in securing supply, stabilizing markets, and ensuring industries can keep running.
Beyond managing risk, traders can also drive responsible sourcing by integrating environmental, social, and governance (ESG) considerations into their decision-making. With supply chains under increasing scrutiny, their influence can push for higher transparency and more sustainable resource management.
ESG Regulations: A Fragmented Landscape
Companies today face a shifting and often fragmented regulatory landscape when it comes to ESG compliance. The EU, for example, is taking a strict regulatory approach, while the U.S. is leaning towards incentive-based policies. Neither system has found the perfect balance, and businesses often find themselves caught between different requirements.
What’s clear is that ESG compliance is no longer just a box-ticking exercise—it has become a competitive necessity. Companies that fail to integrate sustainability into their operations risk not just fines or reputational damage, but also losing access to markets, investors, and customers who demand higher transparency and accountability.
More Than Regulation, A Business Opportunity
There is a widespread recognition that net-zero targets should not just be viewed as a regulatory burden but as an opportunity for business leadership. Reducing emissions, improving efficiency, and investing in sustainable supply chains aren’t just about compliance; they can create market advantages, unlock new investment opportunities, and build resilience against future shocks.
Yet, at the global level many companies still see the energy transition as a challenge rather than an opportunity. The real question is: who will take the lead and innovate, and who will struggle to keep up?
The Road Ahead: Collaboration & Action
Ensuring a resilient and sustainable supply of CRMs will require a joint effort between industry, governments, and financial institutions. The solution is not just cutting red tape or rolling back ESG requirements, but creating clearer, more harmonized policies that incentivize responsible sourcing and secure long-term supply.
At the same time, businesses must go beyond regulatory compliance and proactively embed sustainability into their operations—not just for reputation, but for long-term competitiveness.
The energy transition is, at its core, about the materials that make it possible. And as this event made clear, the future will belong to those who can navigate the complexity, take responsibility, and seize the opportunities emerging in this evolving landscape.