SfC engages Daimler on rare metals
The company is on the right path but there is room for improvement, especially on rare metal cobalt.
On July 30, SfC’s members Ecofi Investissements, Bank für Kirche und Caritas and Fondazione Finanza Etica engaged the German automotive company Daimler on issues related to the sourcing of rare metals, during a conference call.
Daimler, a major user of cobalt (a rare metal) for electric-car production, is one of the 12 companies analysed in the research “Rare metal supply chains. Challenges for a sustainable energy transition”, carried out by Meeschaert Asset Management on behalf of Shareholders for Change and published in May 2019.
«Based on the research, SfC members are engaging companies in the automotive, chemical and renewable energies sectors on the sourcing of rare metals, which is associated to environmental and human rights risks», explains Cesare Vitali, head of ESG research at Ecofi Investissements. «During the conference call we have asked Daimler more than 20 questions, mainly on the auditing of its cobalt supply chain, the assessment of related risks and the dialogue with relevant stakeholders».
The company has been cooperative and appears to be on the right path to a sustainable sourcing of rare metals. Daimler explained to have charged an external firm, in 2019, with a three-year audit of its cobalt supply chains for the battery cell suppliers of Mercedes-Benz AG. The program covers both downstream (from battery manufacturers to refineries) and upstream suppliers (from mines to refineries). Moreover, Daimler has committed to evaluate 70% of suppliers of all high-risk raw materials by 2025 while it aims to define measures for addressing 100% of raw materials linked to high risk of human rights violations by 2028.
«This is certainly a good level of commitment», says Tommy Piemonte, Head of Sustainable Investment Research at Bank für Kirche und Caritas. «However, on some issues, such as a possible stop to the import of Congolese cobalt, associated to a high risk of human rights abuses, the company has not given a clear answer».
The engagement with Daimler will continue throughout 2021. The company has invited Shareholders for Change’s representatives to its headquarters in Stuttgart for a more comprehensive dialogue: the one-hour call was not enough to address all issues raised by SfC in detail.