The criticality of lithium and the sustainability-finance nexus: Supply-demand perceptions, state policies, production networks, and financial actors

The eco-technological fix to the climate crisis renders certain resources, such as lithium, as "critical". We argue that criticality is actively produced in socio-technological processes, involving three interrelated levels - demand, supply and price perceptions, policies linked to green extractivism, and underlying narratives around the role of commodities in development. Criticality is interrelated with firm strategies in global production networks (GPNs) as well as financial actors' strategies, legitimizing extractivism for sustainability transformations. We highlight the role of financial actors and interests in enabling lithium expansion and assess two channels through which financial actors shape producer strategies and GPNs - financing and price-determination. Driven by criticality, financial actors mobilize "green" investment stories along the sustainability-finance nexus. This enables the shifting of extractive frontiers through funding new projects and creates variable price-setting regimes linked to derivative markets. Financial interests introduce an additional speculative momentum to lithium extraction, contributing to accelerating boom-bust patterns and short-termism. Methodologically, the paper draws on sector data, industry and company reports, as well as semi-structured interviews with lithium sector and financial actors in London, Switzerland, Chile and Zimbabwe.