Sustainable Procurement News

Realizing that their supply chains cannot be made totally immune to disruptions, a number of automakers have adopted a number of strategies to protect their businesses. They include: delivering a “good enough” product to consumers, developing better systems for monitoring the supply chain nodes that matter most, resisting the urge to centralize decision-making for supply chain issues, identifying pragmatic ways to ensure supplies of crucial resources, and turning scarcity into a virtue by turning the inventory problem into a business opportunity.

As the frequency and magnitude of supply chain disruptions continue to grow, it would be understandable if business leaders’ first instinct is to respond by trying to correct every single flaw or mistake, no matter what it takes, so each disruption never happens again. But it’s becoming increasingly clear that a 100% resilient supply chain is unattainable. Rather, pragmatism and adaptability are proving far more effective.

Following initial contracts with European suppliers, the BMW Group has now concluded further agreements for the supply of CO2-reduced steel in the US and China. In the medium-term, the BMW Group will increase CO2 savings through agreements with additional steel suppliers and thus consistently drive forward the decarbonization of its supplier network.

The company recently announced that it is taking more steps to ensure a stable supply of low carbon steel for its future products. This will help the company reach its goal of becoming carbon neutral by 2035. The company has entered into Memorandums of Understanding (MoUs) with Salzgitter Flachstahl GmbH, Tata Steel Nederland B.V., and ThyssenKrupp Steel Europe AG in order to secure this supply.

Three of Ford’s major suppliers have announced they will be boosting production of low carbon steel in the next few years. This is excellent news for Ford, as it means a considerable decrease in the company’s CO2 footprint. The first application of this new steel will be on Ford’s all-electric, medium-sized crossover vehicle, set to come out in 2023.

“Our customers, like us, want to take care of our planet, and we are taking the necessary steps on this journey, providing the vehicles they need to make a positive contribution against climate change, produced in a more sustainable way,” said Sue Slaughter, purchasing director, supply chain sustainability, Ford Motor Company. “Improvements within our supply chain are key, and with the use of carbon neutral steel we will take a major step towards lowering the CO2 footprint of our vehicles.”

New Japanese government guidelines on business and human rights mean that Japan’s car industry should accelerate efforts to clean up their supply chains.

Japan’s carmakers are gradually embracing the transition to electric vehicles, which could help shrink the country’s destructive climate footprint. Although Japan gets more than two-thirds of its electricity from fossil fuels, electric cars still have a smaller carbon footprint than gas vehicles.

When it comes to human rights, however, electric vehicles are problematic. The materials needed for car batteries and other parts are linked to global human rights and environmental harms. Japan’s three largest carmakers – Toyota, Nissan, and Honda – all scored poorly in the 2020 Corporate Human Rights Benchmark, which ranks companies on their global human rights performance.

Japan’s new business and human rights guidelines, released September 13, are nonbinding and need significant improvement, but make clear that Japanese companies should identify human rights abuses in their supply chain and work with their suppliers to fix them.

From 2025 onward, the joint venture between PowerCo, the new battery business of the Volkswagen Group, and Umicore, the Belgian circular materials technology company, will begin producing precursor and cathode materials in Europe. The partnership will provide European battery cell manufacturers with key chemicals supplied by PowerCo.

The partners’ aim by the end of the decade is to produce cathode material and their precursors for 160 GWh cell capacity annually. This compares to an annual production capacity that could power about 2.2 million full electric vehicles. Cathode active materials are crucial for a successful powertrain transition towards e-mobility because they are key levers affecting battery performance, as well as the biggest single contributor to overall battery cost.

“Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of overall cell value.” said Thomas Schmall, Group Board Member for Technology at Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE. “Immediate and long-term access to extensive capacity is thus a very clear competitive advantage. We are setting up a sustainable, transparent supply chain with high environmental and social standards, localizing value creation here in Europe.”

Sustainability through Innovation.
Continuously enhancing driving pleasure and ambitious sustainability targets define the work of the BMW Group in shaping the individual mobility of the future. The company firmly believes that innovation is the key to progress in both areas. With more than 100 years of experience and extensive technological expertise, the BMW Group is rising to the challenge of developing attractive mobility solutions in harmony with climate protection, resource conservation, quality of life in urban environments and social responsibility. As part of the “Sustainability through Innovation 2022” event, the company is presenting a wide range of groundbreaking technologies, concepts and strategies that illustrate how innovative strength and visionary thinking can generate momentum for sustainable mobility.

The BMW Group has chosen to use BASF Coatings’ CathoGuard® 800 ReSource e-coat at its plants in Leipzig, Germany, and Rosslyn, South Africa, and the iGloss® matt ReSource clearcoat throughout Europe. Using these more sustainable product versions for vehicle coatings enables CO2 avoidance of around 40% per coating layer; this will reduce the amount of CO2 emitted in the plants by more than 15,000 metric tons by 2030.


“As the largest provider of chemical products to the automotive industry, we are aware of our responsibility to support our customers with innovative, eco-efficient solutions. The biomass balance approach allows us to make our coatings solutions even more sustainable while retaining the same quality. We are delighted that the BMW Group has chosen to play a pioneering role in the automotive industry and that our products play a key part in helping it achieve its ambitious sustainability goals,” said Markus Kamieth, Member of the Board of Executive Directors of BASF SE.

Tesla released interesting and rare details about its approach to sourcing lithium, nickel, and cobalt directly from mines instead of through its cell suppliers. This approach is going to be critical as companies fight to secure those minerals for battery production to support electric vehicle growth.


While Tesla sources the vast majority of its battery cells from suppliers, it actually sources a large part of the materials used to build those batteries directly from mines.

This approach enables Tesla to have direct relationships with miners of critical minerals and helps secure supply while allowing the company to monitor quality closely and ensure responsible environmental and social sourcing.

Responsible management of natural resources is one of the core elements of the BMW Group’s commitment to sustainability. Within the framework of these activities, the company has joined the cross-sector “Responsible Lithium Partnership” project. The aim of the project is to reach a shared understanding of responsible management of natural resources with local interest groups and develop a vision for the future of the Salar de Atacama salt flat in Chile.

The “Responsible Lithium Partnership” was initiated in spring 2021 by BASF, the Mercedes-Benz Group AG, Daimler Truck AG, Fairphone and the Volkswagen Group for a planned duration of three years. The project does not promote lithium sourcing or the purchase or sale of mineral raw materials.

The BMW Group is systematically pursuing its climate goals for the supplier network and significantly reducing the carbon footprint of its steel sourcing. Following initial contracts with European suppliers, the BMW Group has now concluded further agreements for the supply of CO2-reduced steel in the US and China.

“Steel is one of the main sources of CO2 emissions in our supply chain. That is why we are comprehensively reorganising our steel portfolio – so we can supply our global production network with over on third of CO2-reduced steel from 2026. This will reduce the carbon footprint of our supply chain by 900,000 tonnes per year, while at the same time driving the transformation of the steel industry,” said Joachim Post, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.

Stellantis will look to upgrade its medium-term target for the minimum percentage of recycled material in its vehicles from 35 percent, the carmaker's Senior Vice President Global Circular Economy Alison Jones said.

In its business plan, Stellantis has set a goal to boost revenues of its recycling business ten-fold to over 2 billion euros ($1.9 billion) by 2030. It also aims to quadruple revenues from extended-life parts and services.

"We talk about having a minimum target of 35 percent of recycled materials in our vehicles, it will vary by vehicles," Jones said on Tuesday whilw presenting Stellantis's Circular Economy business.

"Of course we will look to increase that, because we want to make sure we take more material and put it back in our vehicles going forward," Jones said, without specifying what the percentage might rise to.

Jones said the project -- based on "reman," "repair," "reuse" and "recycle" -- would help the group meet its carbon net zero target set for 2038.

It will also help the automaker to keep prices lower as the shift to electrification often means more expensive vehicles, and cope with potential prolonged shortages of raw materials in its supply chain.

Stellantis CEO Carlos Tavares has said scarcity of raw materials will continue in the next decade, adding it is a key task for the carmaker to extend the life of materials it uses.

The auto industry's drive to a greener and cleaner future is a treacherous road for companies in its beleaguered supply chain. Only the strong and the shrewd may survive.

Many auto suppliers, already squeezed by rampant inflation and energy prices, say they have little choice but to shoulder the extra costs of making their components sustainable to meet automakers' environmental targets.

"If you do not, you are not going to have a business in five or six years supplying major carmakers," said Shane Kirrane, commercial director at Autins Group, which has plants in Britain, Sweden and Germany that make acoustic and thermal insulation for cars.

All major automakers have committed to green targets, seeking to purge dirtier materials from their supply chains to satisfy regulators and investors as they transition to electric vehicles.

BMW, for instance, expects all of its battery and many of its steel and aluminum providers to produce materials made using renewable energy, while Volvo is targeting 25 percent recyclable plastic in its cars by 2025.

Many suppliers are consequently making large investments to green up their acts, from developing recyclable parts to hooking up their businesses to renewable energy, according to interviews with more than a dozen industry players.

In 2002, Ficosa was one of the country’s first companies in the sector to join the Compact, as part of its commitment to sustainable development, which is key to the company’s present and future strategic vision.

Since then, Ficosa has periodically renewed its participation in the Global Compact, aligning its sustainability strategy with the Sustainable Development Goals (SDGs) across the organisation in all 16 countries in which it operates. This strategy encompasses a variety of projects in the environmental, social and governance fields, and it extends along the entire value chain, encompassing employees, customers and suppliers.

One of the company’s main goals in this regard is to achieve climate neutrality by 2030, reducing 100% of Scope 1 and Scope 2 emissions. To this end, efforts are being made to increase the use of renewable energies to the detriment of fossil fuels. So, for instance, the company is constantly analysing its processes to make more efficient use of its resources. It is also developing various projects in this regard, such as the installation of photovoltaic panels on the roof of some of its plants, some examples of which are already in operation in Taicang (China) and Maia (Portugal). Furthermore, 11 of its centres already use 100% renewable energy, and, by the end of the year, it is estimated that around 64% of the Group’s electricity consumption will be from renewable sources. Through these initiatives, it is estimated that CO2 emissions will drop by 17,800 tonnes in 2022 alone.

Mountain bike tyres from the Continental Gravity range have become the first products to feature responsibly sourced natural rubber from a project aimed at establishing sustainable natural rubber supply chains. Continental aims to achieve 100 per cent sustainable supply chains by 2050 at the latest, but is going one step further when it comes to natural rubber and intends to cover its entire demand exclusively through responsible sources by as soon as 2030.

The car industry, one of the largest polluters in the world, is showing its efforts to reduce it, as passenger cars produced approximately three billion metric tons of carbon dioxide emissions worldwide in 2020. The emissions produced by passenger cars have been steadily rising over the past two decades, increasing from 2.2 billion metric tons in 2000 to a peak of 3.2 billion metric tons nowadays.

In addition to CO2 emissions, cars can pollute even before going out on the street, and also after the end of their life. Materials like steel, rubber, glass, plastics, paints, toxic battery acids, and other products may stay in the environment, affecting the natural cycle of life on Earth. Fortunately, the automotive industry and many other areas are focusing their attention on this issue, taking visible actions.

The Volkswagen Group recently published its first Responsible Raw Materials Report, a first step in considering human rights and environmental risks in particularly exposed supply chains. When it has to rely on other manufacturers, the carmaker is hampered when it comes to transparency and the implementation of standards.

In this new report, Volkswagen shows his strength to reveal for the first time the list of smelters in its tin, tantalum, tungsten and gold supply chains as well as the countries of origin. The document covers 16 high-risk raw materials, including battery materials such as lithium and cobalt.

Each partner is targeting a specific part of the automotive supply chain for carbon-emissions neutrality over the Polestar 0’s expected lifecycle.

Mini's updated EV, the 2023 Cooper SE Resolute, is like hitting two birds with a single stone. On the one hand, the Resolute special edition model pays tribute to Mini's iconic sporting heritage. On the other is a hallmark of sustainability, ditching all those gaudy exterior chrome trim for sustainable bronze elements.