Considerations for Investors

Best practice considerations include: engaging with companies involved in the responsible and sustainable sourcing of minerals and chemicals through certifications, impact investing, and shareholder proposals. Robust AI ethics frameworks can help mitigate the risk of biases in predictive analytics and autonomous systems. Overlooking these areas can create operational, legal, and reputational risks that undermine long-term value creation. By proactively addressing ethical issues through governance structures that embed responsible innovation, prudent companies can distinguish their brands, attract talent, and future-proof against regulations.

Things Happening in this Space

Materials - Individual

The key individual impacts of concern for investors are: 

 

Infrastructure safety: Physical assets like pipelines, storage facilities, and chemical plants require rigorous maintenance protocols and redundancy to minimize disruptions to essential services.

 

Negative uses of technology: Powerful CRISPR gene editing techniques could be misapplied to create harmful agents by criminal actors if oversight and security vigilance is inadequate.

 

Health risks: The potential unintended health consequences from lab-created organisms, gene drives, or edited biological materials warrant extensive pre-release trials, long-term studies and cautious roll-out.

 

Cyber resilience: Increased monitoring, automation and system interconnection improve efficiency and creates vulnerabilities for those in the sector.

 

Unless the above are proactively addressed, potential ramifications include:

 

  • Liability costs if worker safety is compromised by new materials or automation.
  • Recruitment challenges due to workforce concerns over job losses from technology.
  • Reputational damage over the lack of transparency around product materials and risks.

Materials - Society

The key societal impacts of concern for investors are: 

 

 

Responsible AI: Deploying unproven AI analytics or automation in hazardous chemical or mining operations can hold grave risks if systems are scaled irresponsibly. Extensive testing and human oversight are imperative.

 

Privacy risks: The collection of extensive worker, customer and equipment data warrants clear consent permissions, stringent access controls and purpose limitations to prevent abuse or unauthorized use.

 

Discrimination: Underlying flawed data or biased algorithms used risk assessments, equipment repairs and inventory management could disproportionately impact certain groups if not proactively audited. Regular impact assessments can alleviate this.

 

Accessibility: User interfaces for equipment control panels, or operator tools can accommodate people with disabilities and other marginalized groups using inclusive design.

 

Unless the above are proactively addressed, potential ramifications include:

 

  • Noncompliance costs as regulations tighten around safety, sustainability, and privacy.
  • Liability costs if workers are discriminated against by biased algorithms.

Materials - Environment

The key environmental impacts of concern for investors are: 

 

Environmental sustainability: Materials manufacturing consumes substantial amounts of energy and natural resources. Hardware innovation can help optimize efficiency, recycling and convert waste streams into energy.

 

Environmental impacts: Gene editing could disrupt natural ecosystems if accidentally released or intentionally deployed in agriculture or forestry without sufficient safeguards. Containment protocols and impact studies are critical.

 

Unless the above are proactively addressed, potential ramifications include:

 

  • Reputational damage if sustainability regulations is ignored.
  • Supply chain instability and ethical sourcing premiums.

Materials - Markets

The key market impacts of concern for investors are: 

 

Legal compliance:  Navigating evolving global data regulations for certain parts of the sector – such as the metals infrastructure and supply chain – is inherently complex. Continual governance is essential.

 

Regulatory lag: Innovation in areas like synthetic biology and biomaterials may outpace regulatory frameworks if not adaptively governed with prudence. International guidelines and oversight are still evolving in this complex area.

 

Vendor ethics: Clear governance requirements for external data analytics partners reflect duty of care over potential consumer and societal harms enabled by opaque third-party data practices. Accountability requires due diligence.

 

Unless the above are proactively addressed, potential ramifications include:

 

  • Increased regulatory burden due to the increasing complexity of the sector.
  • Reputational damage if controversial regimes exploit materials innovation for concerning capabilities.
  • Sanctions violations if sourcing practices lack oversight on restricted suppliers.