Volkswagen has entered into a strategic partnership with RCS Global, a specialist in supply chain analysis as the Group aims to introduce greater transparency and responsibility in its raw material supply chains for batteries.
The focus of the new partnership is on auditing suppliers for conformance with human rights, safe working conditions and environmental protection along the supply chain back to the mines.
It is a continued effort in a line of measures VW has taken recently. The Group introduced a sustainability rating for direct suppliers one year ago. The system developed by RCS Global now extends the sustainability criteria to sub-suppliers, refineries, smelters, mines and recyclers.
To set the benchmark for a flawless raw materials supply chain, Volkswagen applies the procurement criteria of the Organisation for Economic Cooperation and Development (OECD). If risks and shortcomings were identified, suppliers would be given guidelines for improvement, according to a statement from Group headquarters. This includes exclusion from the supply chain as a last resort if they track serious audit violations such as child labour in small scale mines, for example.
However, in cooperation with RCS Global that ran as a pilot since April, VW says it has identified and audited 134 sub-suppliers and 18 mines in the Group’s battery supply chains. The expanded partnership has also enabled the development of due diligence measures for each type of relevant raw material utilizing a comprehensive management system, despite a large number of companies in the supply chains, VW claims.
When it comes to the materials, cobalt is traditionally high on the agenda (or in the public eye). Volkswagen is not alone in its attempt to for example apply blockchain technology to track sourcing. BMW or Volvo as well as Tesla and the small Sono Motors are part of various such initiatives.
Volkswagen says they now consider sustainability a “crucial factor in the production of all Volkswagen models” and especially the all-electric cars ID.3 and ID.4. The Zwickau factory uses 100% green power. Production of the battery cells, purchased externally by Volkswagen, is inevitably energy-intensive. For that reason, Volkswagen has stipulated that its cell suppliers must exclusively use green power in their manufacturing processes, as stated in the press release.