“The Responsible Raw Materials Report not only showcases our progress in terms of transparency and risk management in the raw material supply chains, but also highlights the challenges we face. We go above and beyond our legal obligations,” says Dirk Große-Loheide, Member of the Brand Board of Management of Volkswagen responsible for Procurement and member of the Extended Executive Committee. “We take the procurement of raw materials sustainably very seriously and continuously collaborate with indirect suppliers in upstream supply chains, which pose the greatest challenge. Our Raw Material Management System plays a crucial role in this, implementing specific measures to identify and mitigate risks in these supply chains.” Dirk Große-Loheide adds, “With the Responsible Raw Materials Report, the Volkswagen Group, together with its brands Audi, Porsche, Scania, and MAN, documents our efforts and demonstrates that sustainable procurement is achievable. This report may also serve as an inspiration to others.”
In 2022, a major focus was on maintaining close cooperation with battery suppliers and their suppliers, from the mining stage to the production of battery cells. The aim was to increase transparency in complex supply chains and conduct audits to ensure responsible sourcing of raw materials. With the establishment of the new battery company PowerCo SE and the first battery cell factory at the Salzgitter site, Volkswagen engaged in deeper dialogue with relevant stakeholders to address human rights and environmental risks, and advocate for the certification of specific mines.
As a significant step in this direction, Volkswagen joined the “Initiative for Responsible Mining Assurance (IRMA)” in March 2022. The company has committed to gradually implementing the IRMA standards in its battery supply chains. IRMA is a coalition of NGOs, unions, affected local communities, investors, mine operators, and raw material customers, all working towards improving conditions in industrial mining.
Furthermore, Volkswagen’s involvement in sustainable supply chains has been expanded through its membership in the Leather Working Group (LWG), an initiative for the responsible procurement of leather, and the election of MAN Bus & Truck to the advisory council of The Copper Mark.
Since 2021, Volkswagen Group has been the first automotive company to publicly and voluntarily report on its Group-wide efforts to mitigate human rights and environmental risks in high-risk supply chains. The report follows the “Due Diligence Guidance for Responsible Business Conduct” from the OECD, which outlines five steps for responsible due diligence, and complies with the requirements of the “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.”
The report provides detailed information on Volkswagen’s methodology and activities regarding the Raw Material Management System for responsible sourcing of raw materials. It covers 16 high-risk raw materials, including lithium and cobalt used in batteries.
Since 2019, all relevant direct business partners of the Volkswagen Group are subject to mandatory sustainability ranking, which assesses environmental and social standards in addition to criteria such as cost and quality. Since 2020, the group has required full disclosure of the supply chain down to the mining stage for all new contracts related to battery raw materials.
