Tracing trouble: How companies are confronting conflict minerals risks

State-based armed conflict poses a significant risk for companies, currently identified as a major short-term global threat in the World Economic Forum’s “Global Risks Report 2025.” Conflict minerals — primarily tin, tantalum, tungsten and gold (3TG minerals) — are often sourced from regions experiencing violence, armed group activity, and human rights challenges, potentially contributing to the financing of these issues. In recent years, global efforts to prevent the financing of armed conflicts through mineral sourcing have led to regulations targeting conflict minerals in several jurisdictions: Section 1502 of the US Dodd-Frank Act pioneered mandatory disclosure for publicly listed companies, while the EU followed with Regulation 2017/821, requiring importers to trace and audit their supply chains. Other countries, such as China, have also introduced frameworks aligned with Organisation for Economic Co-operation and Development guidelines, signaling a shift from voluntary corporate responsibility to legally enforceable standards.

Rising gold prices have led to increased scrutiny on illicit gold mining, particularly in regions marked by weak governance and ongoing conflicts. Powerful groups with vested interests — including military juntas and organized crime — can exploit these vulnerabilities to extract billions of dollars’ worth of gold. The fungibility of gold facilitates laundering, enabling these groups to embed themselves deeply within supply chains. Demand for transparency and ethical sourcing gives companies further cause to ensure their supply chains are free from conflict minerals, which present ethical challenges and financial risks. Proactively managing these risks can help companies avoid regulatory challenges, protect their reputation, and maintain business continuity against potential obstacles such as supply chain disruptions. Therefore, companies must assess conflict mineral-related risks and eliminate minerals that are not conflict-free to strengthen supply chain resilience and stakeholder trust.

Within our ESG Scores and Raw Data, underpinned by the S&P Global Corporate Sustainability Assessment (CSA), we assess whether companies have public policies on conflict minerals, formal processes to identify potential risks, and measures to manage or mitigate those risks.

The CSA is an annual evaluation of sustainability practices covering about 14,000 companies worldwide. In this review, we analyze the conflict minerals management practices of an average of 2,140 public companies across various industries as part of the 2021, 2022, 2023 and 2024 research cycles.

Figure 1 illustrates the year-over-year trend from 2021 to 2024 in the adoption of publicly available policies addressing the sourcing of conflict minerals. The trend underscores a significant shift: In 2021, less than half of companies assessed had conflict-free sourcing policies, but this proportion grew steadily, rising 13% to reach 55% by 2024. This reflects growing corporate awareness and responsibility to mitigate the risk of contributing to conflict through supply chains.

Figure 1 also shows a sector-wise breakdown of companies with conflict minerals policies. The semiconductor and technology hardware industries led, with more than 65% of companies adopting such policies. These sectors are highly exposed to conflict minerals used in electronics and regulatory pressure in their key markets. In contrast, the materials and capital goods sectors have lagged, with less than 45% of companies reporting conflict mineral policies, likely due to facing less direct pressure from downstream buyers.

Figure 2 shows the percentage of companies that have implemented processes to identify the risks surrounding conflict minerals, alongside those that have adopted measures to mitigate or remediate such risks. On average, 44% of these companies have established formal processes to trace minerals through their supply chains and identify risks in conflict-affected areas. The semiconductor and technology hardware sectors have led in adopting formal procedures to identify risks; this is likely driven by their high reliance on 3TG minerals and complex supply chains, which increase regulatory and reputational risk. In contrast, the capital goods and materials sectors have lagged, likely due to lower direct exposure and less stringent stakeholder scrutiny.

However, slightly more than one-fifth of companies have implemented measures to mitigate or remediate risks related to conflict minerals. Notably, the industries leading in risk identification, including automobile and auto components, exhibited the widest gap between risk identification and risk management measures. This may be due in part to some companies not yet identifying conflict minerals risks within their supply chains. This may also reflect challenges in implementing corrective measures beyond the first tier of suppliers, particularly for companies operating within highly fragmented global supply chains with multiple tiers, or insufficient incentives to address known conflict minerals issues.

Our analysis shows that, despite a growing trend of companies adopting conflict-free minerals policies, nearly half still lack sufficient corporate commitment to mitigate the risk of contributing to conflict through their supply chains. While many companies have integrated risk identification processes, the data reveals a significant gap in implementing mitigation and remediation measures across the supply chain, indicating room for improvement.

Looking ahead, it is essential for companies not only to comply with current regulations but also to anticipate future developments in the regulatory landscape surrounding responsible sourcing. Companies that have already adopted conflict mineral supply chain systems can leverage their existing knowledge to guide successful due diligence in high-risk sourcing environments. As stakeholder expectations rise and regulatory scrutiny intensifies, companies that fail to act may face significant operational and reputational risks. The path toward responsible sourcing of conflict minerals is ongoing, and companies have many reasons to be proactive in navigating these complex challenges.