Human Rights Day is an opportune moment to reflect on our contribution to sustainable practices. Where do our raw materials come from? How can we ensure that our environmental, social and governance commitments are respected in our supply chain? And what about our relationship with China?

So, grab a warm drink and get ready to chat as on this Human Rights Day, we’ll take a closer look at our sourcing policy and our efforts to establish a sustainable supply chain.

What is the role of the Supply Chain in social and environmental outcomes?

Our project aims to put Corporate Social Responsibility (CSR) at the heart of its concerns. A majority of the social and environmental impact of our products comes from the supply chain. The extraction and refining of raw materials presents challenges not only for the environment, but also in terms of human and labour rights. 

In this context, our goal is to put in place and guarantee a fair, transparent and sustainable supply chain that enables us to reduce our environmental impact. Various areas of action, detailed in our CSR Report 2023, have already been put in place or will be deployed in the near future.  

How do we ensure sourcing from "responsible" mines upstream in the process? 

The first step of our strategy is to choose the right suppliers to provide our raw materials. Our suppliers must ensure that their practices do not cause human rights abuses, environmental pollution and damage, health and safety risks, or breaches of compliance. 

But what is a responsible mine? According to global standards (i.e. IRMA) a mine is considered "responsible" when it complies with laws and regulation on human rights, business ethics, labour law, health and safety practices and environmental responsibility. 

Suppliers meeting ACC’s requirements is a major achievement. Suppliers' maturity in terms of responsible practices can vary that’s why ACC has developed process to support and continuously improve suppliers performance. 

ACC develops demanding Codes of Conduct (Code of Ethics, Sustainable Supply Chain Charter) with which suppliers must comply. 
During the Request For Quotation (RFQ) process, which enables the selection of the suppliers, ACC is evaluating each of them on several aspects, CSR being one of them. 
ACC has implemented a supplier CSR evaluation process, based on our Sustainable Supply Chain Charter, a documentary assessment by EcoVadis and an internal questionnaire designed by ACC to tackle the CSR, environmental and raw materials traceability topics. 
 

An ongoing collaboration: assessing suppliers and enhancing sustainability practices 

After the supplier selection process, ACC also carries out regular assessments and works closely with suppliers, particularly helping them calculate their CO₂ emissions and improve their CSR maturity. 

Another important concept to know when talking about sustainable procurement is the Due Diligence. According to OECD, Due diligence is “the process through which enterprises can identify, assess, prevent and/or mitigate and account for how they address actual and potential adverse impacts in their own operations, supply chains, and business relationships”. 

Supply Chain Due Diligence is related to ethical, labour, human rights, and environmental aspects within the supply chain. This involves evaluating every step in the supply chain, from raw material sourcing to final product delivery, to ensure compliance with regulations and promote transparency and accountability. 

ACC is rolling out progressively its Due Diligence in Supply Chain Program by: updating the Sustainable Supply Chain Charter and our questionnaires to suppliers in 2024, strengthening the supplier assessment process based on the updated requirements of the Sustainable Supply Chain Charter, conducting risk mapping for key raw materials. 

ACC is also working on the supply chain traceability mapping and started to conduct third-party audits of the mines (on-site) in collaboration with RCS Global.  

How do we ensure that these values are respected on the long run?  

Once this list of criteria has been drawn up, how can we ensure that they are respected by our suppliers, and monitor their application throughout the value chain?  

Firstly, any supplier wishing to work with us must first undergo a Corporate Social Responsibility assessment process before signing a contract. This system will be strengthened in 2025 to comply with the due diligence requirements of the EU battery regulation.  

ACC requires all our suppliers to commit to apply and cascade in their supply chain ACC Sustainable Supply Chain Charter requirements, this document is a part of contracts. In particular, this charter emphasizes the respect of responsible conduct principles listed in the international standards such as the OECD and UNO guiding principles. Suppliers must prohibit child labour within its own operations and throughout its supply chain, without exception.   

We’ve also started to carry out on-site audits with the support of RCS Global: these will enable us to check compliance and, if necessary, support our suppliers with recommendations and follow up on improvement plans where needed.  

Furthermore, we have put in place an alert system to immediately warn us in case of issue. These alerts lead to deeper audits to understand the issue and make recommendations which, if they are not followed through, may lead to termination of the contract with a supplier that contravenes these standards. 

In 2024, ACC became an active member of the Initiative for Responsible Mining Assurance (IRMA), which promotes responsible mining practices throughout the supply chain.  

Our responsible procurement policy excludes suppliers that don’t respect human rights or operating in regions or countries covered by international sanctions. Our suppliers must provide evidence that their practices do not cause human rights abuses, environmental pollution and damage, health and safety risks, or breaches of compliance. 

Tracing the source: the origin of our raw materials 

Transparency and traceability in the supply chain are very complex topics.  

First of all, ACC does not source raw materials directly from mining companies. We buy finished products, i.e. cathode and anode active materials, and our suppliers source the raw materials.  

Despite that our suppliers don’t have regulatory obligation to share the name of their supply chain actors with us, they still do it in the mater of good business practices and in order to build trust with customers.  By being transparent, we can better identify and mitigate risks within our supply chains, such as unethical practices or potential disruptions. The European battery regulation will put an end to all uncertainties regarding supply chain transparency and make it a mandatory requirement for all battery manufacturers wishing to sell lithium-ion batteries on the EU market. 

The origin of the biggest producers of battery minerals is publicly available:   

• Lithium: the most important resources are extracted in Chile, Australia and Argentina. New projects are emerging in Europe, which we are monitoring. 

• Cobalt is mainly mined in the Democratic Republic of Congo, but is also extracted in Australia and Indonesia.  

• Manganese comes mainly from Africa, Australia, China and Brazil.  

• Nickel comes from Australia, Indonesia, China, the Philippines, Russia and Canada.  

• Graphite comes from China, Africa, Canada, Brazil and India. 

And what about China's impact on our value chain? 

China currently controls most of the refining of the raw materials essential to battery manufacture (lithium, nickel, cobalt, manganese, natural graphite) and mainly uses coal and other fossil fuels to run its factories. Europe's dependence on this country is a major concern and ACC has got a commitment to contribute to the reindustrialisation and development of a responsible European battery ecosystem. We aim at progressively relocating the supply chain in Europe.  

Today, we work with Chinese suppliers who have recognized know-how, given that this country is fifteen years ahead in battery development. Our Chinese suppliers comply with our CSR requirements. 

Whenever possible we actively seek to diversify the geographical origin of our suppliers, and we encourage our suppliers to relocate their production, ideally in Europe. Wherever possible, we favour sourcing from local suppliers. We are working with new market players in Europe to help them develop and improve their products, to ensure that they will be able to compete with their Chinese rivals in the years to come. 

Nevertheless, for certain types of purchase and for the time being, Chinese suppliers are the best positioned or the only ones able to manufacture and supply components that are meeting ACC requirements (i.e. quality, reliability, etc.). We respect their expertise and work with them, in compliance with the high CSR standards we have set ourselves. 

 

Through continuous monitoring, evaluation and collaboration with responsible suppliers, we strive to minimize our environmental impact and ensure respect for human rights in all our operations. 

For more information on this subject, and on all our CSR initiatives, please read or re-read our CSR Report 2023. Thanks to all this information, you'll be in no doubt when it comes to answering your uncle's toughest questions around the log!