Green finance is built on a promise: that capital can be redirected to support the transition to a low-carbon economy while avoiding the environmental mistakes of the past. That promise is getting harder to keep.

The technologies needed for decarbonisation of electric vehicles, wind turbines, batteries and grid infrastructure rely on large quantities of critical minerals. Extracting those materials, even from remote places such as Greenland, remains environmentally disruptive, socially contested and politically fraught.

Sustainable finance shapes investment decisions across energy, infrastructure and manufacturing. The ethical frameworks this finance is based on often assume that environmental harm can be minimised through better disclosure, cleaner technologies and improved governance.

The extraction of critical minerals challenges that assumption. Mining is land intensive, energy hungry and often polluting. Recycling of existing batteries, electronics and turbines, and substitution away from scarce materials can reduce demand.

But most projections from the world’s energy watchdog, the International Energy Agency, show that demand for critical minerals will rise sharply under clean energy transitions . Similar bodies show that extraction of raw materials such as lithium, cobalt, nickel and rare earth elements will rise sharply over the next two decades.

This is because the transition away from fossil fuels depends on large volumes of new infrastructure including electric vehicle batteries, wind turbines and grid storage, which cannot be supplied from recycled materials alone.

Recent research and policy assessments suggest this contradiction is becoming more acute, not less. Recent analyses of critical mineral supply chains show that extraction and processing remain highly........

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