Kumi Newsletter May 2024

Welcome to the second edition of our new monthly newsletters from Kumi, in which we share our insights on the latest responsible business developments. And what a busy month it’s been in the world of responsible business!

The European Union’s corporate sustainability due diligence directive has passed! Many companies are asking what it means for them and we’ve seen a significant increase in requests this month for our responsible sourcing diagnostic as companies look to get ahead of the regulation and see how their practices stack up.

To help, we are launching a free online health check tool to give businesses a high-level snapshot of their responsible business conduct. The tool covers 13 key questions across six areas of the key due diligence elements that underpin current and forthcoming regulations. Keep an eye on our website for more information.

Speaking of regulation, Alex and our Berlin team have been busy this month continuing their work on the implementation guidance for the EU Battery Regulation. There is still much detail to work through but the implications are clear for any company looking to introduce a battery or product that includes a battery into the EU market; you will need to ensure you’ve done your DD, particularly in the raw material upstream.

Finally, Andrew, Luke, Alex and I will be at the OECD Minerals Conference on the 22nd of May, where Andrew will be moderating a panel discussion on due diligence and multistakeholder partnerships, so do get in touch if you are going, more details are in the events section below. We look forward to seeing you there.

Wishing you a responsible month ahead!

James Lewry
Client Services Director

The key developments this month:

1. OHCHR launches interpretive guide to access to remedy
The Office of the United Nations High Commissioner for Human Rights (OHCHR) published an interpretive guide on Access to remedy in cases of business-related human rights abuse. It gives practical guidance in a Q&A format for companies wanting to develop or align a grievance procedure with the access to remedy pillar (Pillar III) of the UN Guiding Principles.
2. UK court case launched over Brazil Iron’s mining project in Bahia
Brazil Iron, a self-described “sustainable” mining company, is accused of damaging the environment, health, crops and water supplies of local communities near its Brazilian mine.
3. IOM releases World Migration Report 2024
The International Organisation for Migration (IOM) has released its twelfth world migration report, highlighting the increase in international migrants has increased over the past five decades, with a wealth of statistics on migrant demographics, remittances, and country-by-country statistics.

Social compliance audits as a risk assessment tool

A blanket audit programme without room for adaptation is bad responsible sourcing practice. Take, for example, the excessive auditing of suppliers in Asia, the Middle East, or Africa while ignoring those in Europe. This is because the risk prioritisation process typically categorises sector risks as lower in Europe. But, in many cases, we have found that suppliers in “high-risk” regions have a stronger management system because they are constantly under scrutiny.

Enhancing impact and stakeholder engagement for an investor’s initiative

Stewart Investors, an equity investor, led a joint initiative on behalf of 160 investors managing a combined US$6.59 trillion in assets, aiming to advance best practices in sourcing minerals in the semiconductor industry. The initiative faced challenges in understanding how the companies identified and mitigated risks, particularly as companies heavily relied on industry assurance mechanisms such as certifications and third-party audits.

Stewart Investors case study

Kumi and software specialist Grouptree partner to create Origin Core, a new approach to responsible supply chain due diligence

Many legacy systems are inflexible, not built for the unique requirements of sustainability risks, and supplier due diligence as a transactional relationship. Origin Core is different. It has been created with a single focus; to give businesses of any size a flexible solution to supply chain due diligence that helps to build lasting supplier relationships to manage risks and create impact.

OECD Minerals Conference
21st – 24th May 2024

Our CEO, Andrew Britton moderated a session on “Due Diligence multistakeholder partnerships for Just Transition in the Metals and Renewable Energy sector” on Wednesday 22nd May 2024.
Our Senior Consultant, Alex Graf, who is currently supporting the European Commission on the EU Battery Regulation, spoke at a session on “Forests and electric vehicles’ minerals: Addressing adverse environmental and human rights impacts using due diligence” on Wednesday 22nd May 2024.
Our Client Services Director, James Lewry, and Senior Manager, Luke Smitham also attended this conference.

The Minerals Forum explored emerging priorities in responsible mineral supply chains. It included sessions on conflict risks, gold supply chains, the regulatory landscape, and the role for responsible business conduct in government-to-government agreements on transition minerals.

We held a webinar on: Code to conduct – practical insights on using technology to build responsible supply chains

Our expert panel, featured James Lewry (Kumi), Timothy Perkin (Kumi), Bethan Miles (Origin) and Cerian Atwell (Senior Sustainability Manager, Marks & Spencer). They dove into the pivotal role that technology plays in supply chain due diligence and why it’s important to use tech as a tool in your sustainability toolkit, not rely on it as a standalone solution.

If you wish to receive the recording of this webinar, please click here.