Raw materials are the basis of Scania’s industrial processes and we are committed to build products through responsible business by aiming for a supply chain which cause no unnecessary harm for the people and the environment. However, mapping our products from mill to final assembly is a challenge due to the complexity and constant changes.
Scania believes transparency and cooperation are key words for positive changes throughout our supply chain and we expect our suppliers to take responsibility together with us. We expect our suppliers to disclose the source of materials that may be associated with environmental impacts and potential human rights violations.
Risk based approach
To create further transparency and know-how about raw materials in our supply chains, internal research and risk assessments have been made through different studies and pilot projects. One of our main studies on high risk raw materials was initiated by the automotive industry’s sustainability initiative Drive Sustainability, which Scania is a Lead partner in (Material Change Report). The study was conducted together with The Dragonfly Initiative (TDI) and Responsible Minerals Initiative (RMI). Based on the result of the study, Scania created a joint due diligence management system approach together with the Volkswagen group on high risk raw materials. The management system prioritizes a total of 16 raw materials. The raw materials are connected to conflict minerals tin, tantalum, tungsten, gold, battery raw materials cobalt, lithium, graphite and nickel as well as aluminium, copper, leather, mica, natural rubber, platinum-group metals, rare earth elements and steel. The management system connected to these high risk raw materials is based on the OECD Guidance for Responsible Mineral Supply Chains including steps as: Human rights and environmental risk identification, assessment, mitigation, follow up and reporting. Various Volkswagen Group brands act as sustainability concept leads for prioritized raw materials in order to manage the major challenges of a complex supply chain. Roadmaps and measures have already been developed to mitigate the risks in many of the high-risk raw materials in our supply chains, and the work is continuously ongoing to cover more risks.
All Scania’s products contain conflict minerals. To ensure their responsible sourcing, the company conducts due diligence yearly to identify the source and chain of custody of the parts supplied during the preceding calendar year, and which contained tantalum, tin, tungsten, and gold (3TG). As far as calendar year 2019, Scania conducted Reasonable Country of Origin Inquiry to virtually 100 prioritised suppliers representing 80% of the accumulated weight and volume of the 3TG contained in the parts supplied to the company during the year. As a result of this exercise, 357 smelters were identified, of which 74.5% were found on the Responsible Minerals Initiate (RMI) List of Conformant Smelters. Additionally, Conflict Minerals training was provided to 84 supplier representatives as part of risk mitigation activities.
As far as calendar year 2020, due diligence is currently taking place and for the first time, a Cobalt Reporting Template (CRT) will be made available to our customers, in addition to Scania’s Conflict Minerals Reporting Template provided yearly.
Decarbonisation of supply chain
Scania has a responsibility to constantly improve our climate footprint from purchased goods and services. In our products, batteries, steel, aluminium and plastics are the emission hotspots that make up the majority of our supply chain emissions. They are therefore the main focus in our supply chain decarbonisation. Also we know that the majority of our emissions are not emitted by our tier 1 suppliers, but higher up in the upstream value chain. Therefore it is not enough for us to focus on our tier 1 suppliers’ emissions, we need to address emissions beyond our tier 1 suppliers. We are currently in the process of developing a new supply chain decarbonisation strategy.