Supply Chain

Auto Giants Launch Raw Materials Partnership to Tackle Industry Supply Chain Risk

Electric vehicles and alternative fuels are key components of the auto industry’s vision for the future, but technology isn’t the only thing driving sustainable mobility.

By Sustainable Brands | Published 6 years ago | About a 3 minute read

Electric vehicles and alternative fuels are key components of the auto industry’s vision for the future, but technology isn’t the only thing driving sustainable mobility. Drive Sustainability, a partnership between ten leading automotive companies — BMW Group, Daimler AG, Ford, Honda, Jaguar Land Rover, Scania CV AB, Toyota Motor Europe, Volkswagen Group, Volvo Cars and Volvo Group — is launching a Raw Materials Observatory to address key ethical, environmental and labor rights issues along the automotive supply chain and help industry suppliers improve performance, lower risk and reduce their environmental footprint.

The new initiative will assess the risks posed by the industry’s principal raw materials — mica, cobalt, rubber and leather, amongst others. “This will allow Drive Sustainability to identify the most impactful activities to pursue in order to address the human, ethical and environmental issues within the supply chain,” said Stefan Crets, Executive Director of CSR Europe, which coordinates the partnership.

The Dragonfly Initiative, a specialized sustainability advisory firm, will conduct the risk assessments. Results are expected in January 2018 and once input from stakeholders is received, Drive Sustainability will put together an action plan to address the identified risks at the beginning of 2018.

According to CSR Europe, Drive Sustainability is currently in talks with the Responsible Mica Initiative to support to its ambition of achieving a 100 percent responsible Indian Mica supply chain over the next five years.

“A potential collaboration with the Responsible Mica Initiative is a learning opportunity for both organizations. For Drive Sustainability, this is an occasion to contribute to cross-sector actions to tackle child labor issues and unacceptable working conditions in the raw materials supply chain,” said Crets. “We invite all suppliers and stakeholders along the value chain to collaborate with us in order to obtain sustainable sourcing of raw materials.”

Drive Sustainability was established five years ago. The group has already adopted a common sustainability approach to monitor compliance, promote its sustainability principles through the procurement process and organize capacity building actions, such as supplier trainings and local supplier networks.

“This is a perfect opportunity for an integrated approach amongst auto companies to come together and share a common platform for how we look at some of the very important aspects of sustainability, like working conditions and our collective environmental footprint,” said Bob Holycross, VP of Sustainability, Environment and Safety Engineering of Ford Europe. The Drive Sustainability initiative builds on the company’s own “Partnership for a Cleaner Environment Program,” which provides monitoring tools to help suppliers track and achieve their own sustainability goals, report their progress and share their best practices.

As the industry begins to put a greater emphasis on electric vehicles — which rely on materials, such as cobalt, that are typically sourced from high-risk countries — the Raw Materials Observatory offers automakers with a critical tool to prevent both reputational risk and regulatory action, as well as a roadmap to better, more sustainable sourcing.