VW Drive for Sustainable and Ethical EV Battery Supply Chain

Volkswagen is teaming up with a supply-chain analyst to reduce the climate warming impact of its e-mobility strategy.

The automaker giant is recognizing the enormous adverse global warming issues surrounding the mining and processing of the raw materials needed to manufacturer batteries for BEVs plus various workers’ rights issues. To this end, it has entered a strategic partnership with RCS Global, an agency specializing in supply chain analysis. The focus is on auditing suppliers for conformance with human rights, safe working conditions and environmental protection along the supply chain all the way back to the mines.

Volkswagen introduced a sustainability rating for direct suppliers last year and a comprehensive system developed by RCS Global now also tracks adherence to sustainability criteria at sub-suppliers, refineries, smelters, mines and recyclers. Now new guidelines for improvements issued to suppliers are hoping to make a further contribution to achieving improvements when risks and shortcomings are identified.

Serious audit violations may even lead to the disqualification of suppliers from the supply chain. That applies, for example, to small-scale mining operators when child labor cannot be ruled out. The approach builds on the Due Diligence Guidelines of the Organization for Economic Co-operation and Development (OECD).

Under the cooperation with RCS Global it has already been possible to identify 134 sub-suppliers and 18 mines in the Volkswagen Group’s battery supply chains and the majority have already been audited. The expanded partnership has also enabled the development of due diligence measures for each type of relevant raw material by means of a comprehensive management system, despite the large number of companies in the supply chains.

Ullrich Gereke, head of procurement strategy at Volkswagen, said: “The cooperation with RCS Global helps us to better understand which raw material sources and suppliers are in our supply chain and to measure their responsibility performance. In direct contact with our sub-suppliers, we can better explain and monitor our expectations of responsible sourcing and better follow up on agreed measures following our sustainability audits.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_

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