With commodities like gold and silver becoming the leading performers year-to-date, financial markets have caught a precious metal bug again. Yet, the latest research shows that nature-related risks could undermine the sector’s earnings by as much as 25%.
According to new analysis from Barclays, the sector is particularly exposed to biodiversity and ecosystem challenges, and this vulnerability could reshape how miners operate within the current commodity cycle.
“We hope that in sharing our work we can start an industry conversation that will enable nature considerations to be translated into meaningful and quantifiable insights which can help corporates and financial institutions alike, and ultimately support resilient, sustainable, and prosperous economies,” Marier Freier, Head of Sustainability, said in the report.
The research, published on September 23, highlights the tension between commodity demand and increasing environmental scrutiny. Copper, nickel, and lithium are seeing historically high levels of attention as critical inputs for electrification and renewable energy infrastructure.
Yet, Barclays cautions that the same companies driving the green transition could face profound operational and financial strain if nature-related risks are not addressed. Mining is among the most exposed industries due to its direct dependence on ecosystems for land, water, and biodiversity. Beyond physical disruption, the bank emphasizes that regulatory changes and shifting consumer expectations could exacerbate financial losses.
“In the early to mid-2010s, 1.9bn people (27% of the global population) lived in potential water scarcity. In 2050, this number is forecast to increase to 2.7bn–3.2bn people – a change of 42%–95%,” the report said.
Research arrives during an uneven commodity cycle. Prices for industrial metals remain volatile, with demand expectations frequently changing as both global growth and tariff policies recalibrate. At the same time, investments in decarbonization projects by leaders such as BHP (NYSE: BHP) or Fortescue (OTCQX: FSUGY) are adding new layers of complexity to supply and demand.
If a downturn in earnings tied to nature-related risks materializes, the turmoil could hurt the already fragile balance. Mine development times have historically taken very long, and delays or restrictions (whether due to water issues, deforestation, or local opposition) could choke supply right as energy-transition demand peaks.
As long-term structural demand for green metals grows stronger, the sector’s vulnerability to environmental pressures could limit its ability to meet it. In a way, it is a green energy catch-22.
Barclays points to the LEAP framework (Locate, Evaluate, Assess, Prepare) as an organized way for investors to quantify and approach these risks. With this framework, risks extend beyond immediate costs to encompass reputational damage, access to capital, and regulatory sanctions.
“Addressing nature-related risks is not only essential to protect shareholder value but also vital to ensuring that the green transition delivers on its promise,” the report concludes, serving as both caution and a call to action.
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