Responsible Raw materials management
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.
Approach towards responsible sourcing of raw material
To date, one of the main barriers to responsible sourcing has been supply chain transparency and the lack of reliable data around the impacts of raw material extraction. To address this challenge, Scania has been working with external partners to assess risks and increase transparency in raw material supply chains. In 2021, several important steps were taken. These included working with the Volkswagen Group to publish the Responsible Raw Materials Report – the first report of its kind in the automotive industry. The report was based on the insights gained through our joint Raw Material Human Rights due diligence management system, which is based on the OECD Guidance for Responsible Mineral Supply Chains. The due diligence management system focus on 16 identified high risk raw material in our products. 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. 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. 2022 annual Responsible Raw Material Report can be found here
Electrification of transport has environmental benefits, but brings challenges in terms of impacts in other areas of the value chain. These include the social and environmental impacts related to the extraction of the raw materials needed to manufacture batteries. Mining for battery materials such as cobalt and lithium has an impact on the environment, communities and has been linked to poor working conditions and human rights abuses such as child labour. At Scania, we are determined to make sure that our transition to electric transport happens sustainably and responsibly, taking the value chain impacts of mining metals and minerals into account.
Based on this collaborative work Scania together with the Volkswagen Group, also supports projects to improve conditions for working and living conditions for people and communities connected to mining activities. These included the Cobalt for Development project in the Democratic Republic of Congo, and the Responsible Lithium Partnership in Chile.
Furthermore, in the effort for responsible sourcing of raw material and promoting responsible mining practice, Scania have together with the VW Group in 2022 joined as a member of the Initiative for Responsible Mining assurance. IRMA is an alliance of enterprises, mining companies and non-profit organization. Their common goal: clear standards for improved practices in industrial mining.
Another major achievement was the launch of the Raw Material Outlook platform. Produced and launched along with our partners in the Drive Sustainability initiative, the publicly available platform gives automotive companies a valuable tool to identify and manage the environmental and social risks related to raw materials.
Approach on conflict minerals
Scania is committed to a responsible sourcing of minerals from conflict, conflict-affected and high-risk areas, with particular focus on the metals tantalum, tin, tungsten, gold and cobalt. To address these, Scania has clear requirements towards the suppliers concerned, and structured internal management to support our efforts.
Scania performs due diligence yearly in alignment with the OECD Due Diligence five-step framework, to identify the source and chain of custody of materials containing the aforementioned metals: That involves tracing the mineral supply chain to smelter level and verifying that smelters and refiners in our supply chain are listed by recognised programs providing assurances that the metals are conformant. Alongside that, suppliers not meeting related requirements in the Scania Supplier Code of Conduct are further engaged in the frame of risk mitigation. That includes, but is not limited to, education and capacity building both towards our purchasers and our suppliers. Through the Volkswagen group, Scania also collaborates with industry initiatives such as the Responsible Minerals Initiative to support smelter outreach activities. Read more details in Volkswagen Group Raw materials Due Diligence Report that addresses due diligence efforts undertaken over the year 2021 as well as the measures taken to address the risks identified.
