How Automakers are Building More Sustainable Supply Chains
Within the automotive industry, there is a growing momentum towards a truly clean car, which runs on electricity and is built with decarbonised and responsibly produced materials.
A leading international ranking of the supply chain sustainability efforts of 18 global automakers shows that this clean car is within reach.
The fourth edition of the Lead the Charge Auto Supply Chain Leaderboard evaluates automaker efforts to build more equitable and sustainable supply chains, and found that over 80% of the indicators have now been met by at least one company.
Key findings from the report
Lead the Charge’s analysis shows that a majority of automakers are identifying human rights and environmental risks across their supply chains, as well as using standardised surveys and audits to assess the performance of suppliers against sustainability criteria. Unfortunately many automakers do not go beyond these formulaic approaches and therefore continue to receive low average scores overall.
However a core group of industry frontrunners are pushing further ahead than others, achieving a rate of progress over the last four years that is double the rate of other companies.
These companies are:
● Ford
● Mercedes
● Tesla
● Volvo
● Volkswagen.
What top-scoring companies are doing differently
The Leaderboard shows that industry leaders are making a positive impact by implementing more targeted supply chain strategies at the material and issue-specific levels.
For example, Mercedes, Volkswagen and Tesla publish annual raw material reports detailing how they prevent, mitigate and remedy human rights and environmental impacts across a range of supply chains, such as lithium, nickel and bauxite.
In these reports, the companies also provide examples of how they have engaged directly with suppliers and impacted communities to address specific harms within these supply chains.
Volvo Cars stands out for the progress it has made on decarbonising its steel and aluminium supply chains, two of the top contributors to the embodied emissions of passenger vehicles.
The analysis credits Volvo for having developed a strategy to decarbonise the steel used in its vehicles, and for establishing tailored supplier requirements to reduce steel and aluminium emissions.
Volvo also discloses greenhouse gas emissions from steel and aluminium at the vehicle level, as well as providing data on the specific quantities of clean steel and aluminium used in different EV models.
Vanessa Butani, Head of Sustainability at Volvo Cars, says: “Creating a resilient and responsible supply chain is fundamental to our sustainability strategy at Volvo Cars.
“We’re working closely with our suppliers to increase transparency, accelerate emissions reductions and embed stronger social and environmental due diligence practice.
Ford was the top-ranked company on human rights. The report highlighted how Ford has developed a tailored strategy for mitigating risks of forced labour within its supply chain, as well as specific measures to address risks to Indigenous Peoples’ right to Free, Prior and Informed Consent.
Mary Wroten, Ford Executive Director of Sustainability, ESG and the Environmental Quality Office says that respecting human rights “shapes our approach to creating more sustainable supply chains, ensuring that our expectations and requirements extend from our workforce to every supplier. Recognition as a human rights leader underscores both our progress and our responsibility to keep advancing this work”.
Best practices in the industry
The report explains that implementing more targeted strategies like these, which are designed around the distinct challenges found in different supply chains, is a more effective approach to supply chain sustainability.
To support professionals within the automotive industry and beyond who want to enhance their companies’ supply chain sustainability practices, this year Lead the Charge released a companion best practices briefing, detailing specific examples.
Taken together, the leading practices provide a roadmap for rapid advancement toward more sustainable and just supply chains.