INSIGHT by Ceres
Last week, a new guidebook was released to provide companies with a resource to support responsible corporate engagement efforts in the electric vehicle (EV) battery supply chain that will improve resiliency, advance sustainability, and reduce the social and environmental impacts of scaling up EV battery production.
Electric Vehicle Batteries: A Guidebook for Responsible Corporate Engagement Throughout the Supply Chain comes as many private and public companies are already operating electric vehicle fleets or plan to soon purchase fleets to reduce their carbon footprint and capture cost savings. For these companies, electric vehicle fleets are supporting their business goals to meet their financial and climate targets. With EV markets undergoing exponential growth, the pressure on EV battery supply chains is intensifying, thereby amplifying the challenges companies already confront. This soaring demand for batteries hinges on critical mineral extraction and refining processes that inherently carry both environmental and social impacts.
“Corporate and consumer demand for electric vehicles is already playing a critical role in decarbonizing the country’s transportation sector. And that demand is only going to expand, along with the need for critical minerals and other materials for the batteries that will help power those vehicles. Companies have the potential to exert considerable influence over how the supply chain operates through thoughtful purchasing practices and advocacy, and this guidebook equips them with the knowledge and tools necessary to foster and promote a more sustainable and resilient EV battery supply chain.”
-Sara Forni, director of clean vehicles and head of the Corporate Electric Vehicle Alliance at Ceres
The guidebook highlights three key areas in the EV battery supply chain where corporate engagement can have the greatest impact: the mining of critical minerals, the recycling and reuse of batteries, and transparency and traceability along the supply chain. It categorizes corporate action in these areas by principles for procurement and engagement and actions.
The guidebook recommends that:
〉Fleet owners and vehicle manufacturers prioritize battery minerals sourced from Initiative for Responsible Mining Assurance (IRMA)-certified mining operators where possible, and advocate for U.S mining reform that includes the remediation of abandoned mines and the implementation of royalties for local communities.
〉Fleet owners and vehicle manufacturers prioritize EVs and batteries that are inherently designed for second-life use and recyclability, marked by clear labels indicating instructions for end-of-life processing. Manufacturers should also actively participate in extended producer responsibility schemes and establish partnerships for second-life usage and recycling initiatives.
〉Companies use manufacturers engaged in the Global Battery Alliance’s Battery Passport initiative and encourage suppliers and collaborators to do the same. Companies should also advocate for federal policies that establish standardized EV battery labeling and traceability mechanisms.
Further, the U.S. has enacted several federal policies geared at fortifying supply chains and nurturing domestic EV battery manufacturing. The Infrastructure Investment and Jobs Act of 2021 includes substantial funding for critical minerals mining, processing, and research activities in the U.S. The Biden administration’s invoking of the Defense Production Act in 2022 has also served as a catalyst for increased domestic battery investment, fostering a reduced reliance on imports. The Inflation Reduction Act of 2022 has subsequently expanded and redefined EV tax credits by including increasingly stringent material sourcing requirements including one that requires manufacturers to source or produce EV battery materials domestically or from nations holding free trade agreements with the U.S.
Corporate fleet operators are influential stakeholders in the EV supply chain, wielding substantial collective influence and purchasing power that can effectively shape policy agendas and industry priorities. The strategies contained in this guide are designed specifically for U.S. on-road fleets and other major companies. However, the information and recommendations included hold the potential to be of immense benefit to all stakeholders in the expansive EV supply chain network.
Ceres, in coordination with UC Berkeley’s Center for Law, Energy & the Environment, developed and released the guidebook. Ceres works to decarbonize the transportation sector—the highest-emitting sector of the U.S. economy—through the work of its Corporate Electric Vehicle Alliance and Ambition 2030 initiative.
| about
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future.
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
