Car manufacturing company, Volkswagen Group, has reported positive results from its due diligence efforts along its raw material supply chain, based on the Organization for Economic Corporation and Development (OECD) framework.
The new report, titled: ‘Responsible Raw Materials Report 2021’ detailed the due diligence efforts by the Group across issues pertaining to human rights (such as child labour, modern slavery, etc.) and environmental risks (adverse environmental impacts).
The report is also an important milestone for Volkswagen Group in meeting the commitment to be a leader in responsible and transparent raw material supply chains, the Group noted.
“We are proud to report on the positive outcomes of our due diligence efforts. But we strongly believe that progress and continuous improvement only comes from identifying and addressing existing challenges over and over again.”Volkswagen
In the report, Volkswagen disclosed for the first time the list of smelters in its tin, tantalum, tungsten and gold supply chains as well as the countries of origin. Furthermore, the carmaker used 2021 to prepare more binding sustainability requirements for its suppliers- targeting, among others, leather and natural rubber.
In 2021, Volkswagen Group joined the pledge for a moratorium on deep sea mining, which poses potentially severe environmental risks. Furthermore the company joined the Global Platform for Sustainable Natural Rubber (GPSNR) and supported the development of Reporting Requirements for companies in rubber supply chains.
Address Transparency Challenges
The carmaker acknowledged that it will continue to face challenges in its efforts to gain transparency over complex global supply chains while noting that the toughest challenges to gain transparency often occur at the level of its supply chain. And this, it has no direct contractual relationships; thus, limiting its influence.
In 2022, the Group said, it will continue to address these challenges and more. As many of these challenges are shared by its peers and the wider supply chain, “we will also seek collaborative measures with various stakeholders.”
Volkswagen Group’s Board Member for Purchasing, Murat Aksel:
“We can only overcome global challenges and succeed in protecting the environment as well as human rights, if we work together with all relevant stakeholders and our business partners along the supply chain.”Murat Aksel
A key priority for Volkswagen Group in 2022 is to engage with suppliers in the battery supply chain– from mine to cell– to promote responsible sourcing and mining through credible certification schemes, the Group noted.
As a major step towards this goal, Volkswagen joined the Initiative for Responsible Mining Assurance (IRMA) in March 2022 and pledged to gradually implement the IRMA-standards in its own battery supply chains.
“In the coming years, we aim to engage with further stakeholder groups along the battery value chain and promote certifications against credible industry standards. As new members of IRMA, we plan to progressively apply the standard within our EV battery supply chain throughout 2022. Also in 2022, as the Responsible Lithium Partnership enters the next stage, we will continue supporting local stakeholders on addressing water sustainability issues.”Volkswagen Group
Aksel, expressed confidence about the progress made since the introduction of the first Responsible Raw Material Report and thanked Volkswagen Group’s suppliers for their cooperation.
“On the one hand, we are setting a good example: In order to identify, assess and mitigate human rights risk and ensure responsible sourcing of raw materials, we have implemented dedicated management systems.
“On the other hand, we have high expectations towards our business partners and suppliers in terms of sustainability: The non-negotiable fundament of our business relations are– for example – our Code of Conduct for Business Partners, the Sustainability Rating as well as a grievance mechanism.Volkswagen Group