In 2024, the Critical Raw Materials Act (CRMA) came into force. The regulation is intended to secure Europe’s supply of critical raw materials, especially minerals and metals such as lithium, cobalt, and rare earth elements. The EU is therefore focusing on reducing its dependence on third countries such as China, boosting domestic minerals and metals production, and expanding recycling. In a study published in Communications Earth & Environment, researchers at the Helmholtz Centre for Environmental Research (UFZ) show how the pursuit of security of supply has increasingly pushed sustainability principles into the background. The study also highlights how researchers can help to strengthen sustainability principles in political discourse.

Cesare Fracassi, associate professor of finance, shows that by defining a company’s risk level, agencies can sway some of its business decisions. When Moody’s Ratings reclassified some securities on companies’ balance sheets, it prompted them to borrow an average 22% more — perhaps because they could do so without hurting their credit ratings.

“They raised more debt, and they increased their investments, even though financially, nothing really had happened to the companies,” Fracassi says.