· 8 min read
Various scholars have extensively debated whether the possession of strategic natural resources constitutes a blessing or a curse. While resources can drive an economy based on their exploitation, generating employment and wealth, this apparent advantage comes with significant risks. When an economy relies heavily on strategic resources, it faces the danger that those resources may lose relevance as the world transitions to more sustainable alternatives.
Moreover, the presence of such resources can attract the attention of foreign powers seeking to acquire them at the lowest possible cost, often at the expense of entire ecosystems and communities. A clear example is hydrocarbons, whose exploitation—before climate change became a global concern—was unthreatened. Today, countries that built their economies around fossil fuels face the urgent need to transition toward cleaner energy sources. Yet, the shift to renewables brings its own challenges. The critical minerals required for renewable energy place certain countries in key positions in this transition. It is therefore crucial for Latin America to remain alert to global movements and innovations, to avoid allowing the next "zero-carbon solution" to destroy the economies that are still developing.
Latin America’s fragmented approach to sustainability
As Latin America navigates this complex landscape, it faces a fragmented regulatory environment that lacks a unified sustainability alliance like the EU. This fragmentation presents both challenges and immense opportunities for innovation. With countries at varying speeds and levels of ambition, there is room for individual nations and companies to pioneer new solutions. The ability to innovate on a country-by-country basis allows flexibility in meeting sustainability goals, while also highlighting the region's capacity to develop unique, locally adapted solutions that can be scaled globally.
Notable efforts like Brazil's carbon market initiative and Mexico’s new sustainability reporting requirements are leading the way, underscoring that, despite regulatory hurdles, the region is steadily progressing toward a more sustainable future. These initiatives are examples of proactive innovation in the face of uncertainty, signalling the region’s capacity to transform regulatory challenges into growth opportunities.
A region at the intersection of climate risk and opportunity
Although Latin America contributes less than 5% of global CO₂ emissions, its severe exposure to the effects of climate change highlights a stark historical imbalance. Wealthier countries have long exploited the region’s resources, leaving many countries in a state of underdevelopment with limited infrastructure, resources, and institutional capacity to address these risks. This backdrop of vulnerability presents an urgent call for addressing not just environmental challenges but also the inequities that have exacerbated the region’s climate exposure.
Businesses are thus navigating higher market instabilities and climate risks, but are turning these challenges into opportunities by embedding sustainability at the heart of their strategies. Despite the region’s vulnerability to climate-related disasters like droughts, hurricanes, and biodiversity loss, many companies are opting for a “Design for Impact” approach from the start. By anticipating the long-term implications of their business models, these businesses view sustainability not merely as a regulatory obligation but as a key driver of leadership, growth and resilience.
Design for Impact
Rather than waiting for regulatory mandates, businesses like Natura have already integrated sustainability into their core practices. The Brazilian cosmetics giant has long been a pioneer in sustainable sourcing, particularly through its work in the Amazon. By partnering with local communities, Natura ensures that ingredients like açaí, ucuuba, and murumuru are harvested sustainably, supporting both biodiversity and economic development. Their commitment extends to achieving carbon neutrality and using eco-friendly packaging, setting a benchmark for corporate responsibility in the region and demonstrating that the region’s resilience lies in its ability to innovate and adapt to both climate and market instabilities.
By embedding sustainability from day one, Latin American companies are not only mitigating risks but also gaining global recognition, attracting consumer loyalty, and setting themselves up for long-term success. This proactive approach to sustainability positions the region as an example of how innovation, when guided by a commitment to sustainability, can transform challenges into opportunities for growth.
LATAM as a driver of global solutions
"Design for Impact” is even more important knowing that Latin America has the potential to generate globally scalable sustainability solutions. Traditionally undervalued resources—such as forests, freshwater, and critical minerals—are gaining strategic importance in today’s climate context. Latin America and the Caribbean (LAC), endowed with vast natural capital, freshwater reserves, and abundant critical minerals such as lithium, with the “Lithium Triangle” (Argentina, Bolivia and Chile) representing around 50% of the world's reserve, now stands at a crossroads. The region has a unique opportunity to lead the transition to a sustainable future—by protecting and regenerating its natural capital and responsibly extracting critical minerals to accelerate the global transition.
Innovations leading the way
• Direct Lithium Extraction (DLE): Unlike traditional mining, DLE—pioneered by companies like Lilac Solutions and EnergyX—enables more sustainable lithium production with lower water use and environmental impact. However, Latin American companies such as Cauchari Solar in Argentina are also developing more eco-friendly lithium extraction methods, ensuring that the region maintains control over this critical resource.
• Enhanced Rock Weathering (ERW): Companies like InPlanet, recently recognised for innovation in carbon sequestration, are using ERW to capture CO2 while regenerating soil—an opportunity for Latin American agriculture. Brazilian startups like BiomiTech are exploring biotechnology solutions for carbon capture and soil health, turning the region’s natural capital into a source of global environmental solutions.
• Green Hydrogen Projects: Chile’s Haru Oni project, backed by Siemens Energy, is positioning the region as a key player in the renewable hydrogen economy. Additionally, Enel Green Power in Mexico is expanding its efforts in renewable hydrogen, driving local innovation in clean energy technologies.
Design for long-term Impact
In Latin America, designing for impact means creating initiatives that generate local value—jobs, knowledge, skills—while minimising harm. Embedding sustainability from the outset ensures that projects stay rooted in communities, rather than extracting value and leaving. Innovation, whether technological, social, organisational, or frugal, is central to this approach. This adaptive mindset, born from years of doing more with less, is exactly what the world needs to tackle today’s complex global challenges. Latin America’s sustainability journey has never been about simply following trends—it’s about leading through necessity and innovation.
Protection from extractive exploitation
Design for Impact is also necessary to protect from extractive exploitation. By prioritising efficiency over sustainable development, we could witness the transfer of the region's wealth to other parts of the world, leaving LAC behind with devastating socio-environmental impacts. Transparent, collective negotiation and the development of sustainable local value chains are essential to prevent this, as showcased by some initiatives:
• The development of sovereign wealth funds to reinvest resource profits into local innovation and green infrastructure, as seen with Chile’s Economic and Social Stabilisation Fund
• Strengthening regional cooperation to negotiate better deals with international investors and avoid a “race to the bottom” in environmental standards. Organisations like the Latin American Energy Organisation (OLADE) play a pivotal role in fostering this collaboration.
• Establishing sustainability benchmarks to ensure responsible resource management and fair labor practices. Mexico’s National Institute of Ecology and Climate Change (INECC) has led initiatives to create these standards within the region.
Rethinking growth: Quality over quantity
The emphasis on sustainable resource exploitation also generates tensions with Global North countries—the main carbon emitters—whose lifestyles heavily depend on those same resources. This raises a crucial social question: What level of well-being should we aspire to globally? Is there only one valid model? To illustrate this, consider the simple example of a toothbrush. A traditional toothbrush—a stick with hard bristles—gets the job done effectively. In a sustainable approach, we might use biodegradable toothbrushes that can be planted after use and grow into a tree. Yet, large companies in the Global North increasingly produce electric toothbrushes that consume energy, require batteries, generate greater waste, and are significantly more expensive.
So, which model should we promote? Should we prioritise the production of simple and accessible items, or continue developing more sophisticated products regardless of their environmental impact or accessibility? While this is a basic example, it reflects a central challenge in an increasingly crowded world facing planetary limits: a culture of relative and indifferent well-being.
In a context where national interests often clash, and where economic development must be balanced with natural resource conservation, the question becomes: How do we prioritise? The answer is complex. How can we tell those enjoying high living standards, compared to developing countries, that they need to reduce their consumption and expectations of well-being? I believe the key lies in equity. Through global public policy, we must aim to develop economies that are both socially and environmentally sustainable—focused on better wealth distribution and capacity-building in historically marginalised countries. Raising awareness about the importance of nature and the direct impact of our habits is fundamental. Yet it’s not just about demand—it’s also about supply. This is where public policy must intervene: through agreements that ensure sustainable resource exploitation, encourage local value creation, and provide incentives for responsible consumption. These are just some of the many policies that can contribute to a fairer, more equitable, and more sustainable world.
What Latin America must do now
Looking toward 2050, Latin America stands at a critical juncture. The region's future will depend largely on the decisions made today regarding the use and conservation of its natural resources. The key to a prosperous future lies in aligning economic development with environmental preservation, supported by strong public policies, transparent governance, and international cooperation.
The upcoming COP30 in Belém, Brasil, presents a significant opportunity for Latin American countries to showcase their efforts in sustainability and climate action on a global stage. This event can serve as a platform to highlight the region's commitment to innovative solutions and its role in driving global sustainability efforts.
Hopefully it can help shaping Latin America’s role on the global stage as the coming years will be decisive—raising several crucial questions:
• Are we ready to make the decisions necessary to leverage our natural resources without compromising the well-being of future generations?
• Can we transform our economies to align with planetary boundaries and promote social equity?
• And ultimately, how can we ensure that economic development is not only sustainable but also inclusive—benefiting all sectors of society?
These are urgent questions that demand our immediate attention and collective commitment.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
