Critical Materials and National Sustainability Strategies in Global Business

Critical materials such as lithium and cobalt are essential for achieving the United Nations’ Sustainable Development Goals (SDGs), including SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). These materials, vital for low-carbon technologies like electric vehicle batteries and energy storage systems, pose significant environmental and socio-economic challenges due to their extraction, processing, and trade. Using a 20-year panel dataset from G20 and N11 countries (2002–2021), this study examines the relationship between critical material imports and national-level environmental performance, focusing on CO2 emissions, greenhouse gas (GHG) reductions, and sustainability outcomes. Grounded in the dynamic capabilities framework, the research explores how nations adapt institutional mechanisms, foster technological innovation, and implement circular economy principles to mitigate environmental trade-offs. Results reveal that while lithium and cobalt imports enhance renewable energy transitions and environmental performance, they exacerbate challenges from carbon-intensive extraction and global supply chain dependencies. This study emphasizes collaborative governance, public-private partnerships, and sustainable supply chain management to balance economic growth with environmental stewardship, contributing valuable insights to international business scholarship.