Current responsible sourcing practices in battery material supply chains fall well short of the standards set out in frameworks such as the OECD’s due diligence guidance, potentially exposing car manufacturers, technology companies and battery manufacturers to significant commercial risks. This article sets out where existing efforts are falling short and recommends practical steps that companies may take to strengthen supply chain due diligence.
Kumi has a key role supporting Trafigura and its partners, Chemaf and Pact, in the development of a formalised artisanal cobalt mine site of unprecedented scale in the Democratic Republic of Congo (DRC). This project is proving that artisanal cobalt mining in the DRC can be done responsibly, and at scale.
Companies operating in the agricultural sector have made significant steps towards the adoption of responsible business principles. However, gaps remain with regards to how such principles are being implemented in practice. These are the overarching conclusions of a baseline survey undertaken by Kumi for the OECD-FAO Pilot Project on Responsible Agricultural Supply Chains.
The current responsible sourcing focus in battery supply chains is cobalt. It’s not going to stay that way for long. Like cobalt, the rush is on to secure strategic sourcing positions in both the lithium and nickel supply chains and, just as with cobalt, companies must conduct robust supply chain due diligence and mitigate identified risks.
Kumi has been appointed by the OECD to develop an Alignment Assessment toolkit for the garment sector. Based on our experience of applying the OECD Alignment Assessment approach to support companies in the minerals sector, we believe companies in the garment sector will find this a hugely insightful means of evaluating and improving their due diligence activities and building confidence in their responsible sourcing approach.
Kumi analysis of the conflict minerals policies of over 300 companies has found that only 5% were aligned to the recommendations for company policy content set out in the OECD Guidance. We discuss how the detailed insights emerging from the OECD Alignment Assessment project can help companies to strengthen their due diligence and responsible sourcing practices.
With 2017 being increasingly seen as a watershed year for electric vehicles, the pressure is on to develop responsible supply chains for battery materials. Cobalt, in particular, is under heavy scrutiny. Companies need to establish effective risk management controls to avoid being caught out by some underestimated and poorly understood risk factors. But there are also significant benefits to be realised from responsible cobalt sourcing practices.
The support Kumi has been providing to the OECD in delivering the Alignment Assessment project has given us unique insights into the current state of due diligence practices across global supply chains for conflict minerals. We are now using these insights to inform and strengthen the services we provide to our clients.
The draft methodology for assessing the alignment of industry programmes with the OECD Due Diligence Guidance for Responsible Mineral Supply Chains has now been published. This post provides an overview of the structure and design of what is likely to become an important resource for industry programmes working to address the issue of conflict minerals.
A new global standard has been published by the OECD that can legitimately claim to represent consensus on how companies should assess and respond to the risks of social and environmental impacts in agricultural supply chains. Investors, producers and consumers of agricultural commodities should take note.