Mercedes-Benz will in future only source battery cells with cobalt & lithium from certified mining sites, while significantly reducing cobalt

STUTTGART, Germany, Nov. 12, 2020 /PRNewswire/ --

• Mercedes-Benz AG is fulfilling its responsibility as part of the sustainability offensive and is relying on sustainable supply chains for its electric vehicle fleet. Respect and protection of human rights and of the environment have the highest priority.
• Sourcing of cobalt and lithium exclusively from certified mines makes Mercedes-Benz AG a pioneer for the first cross-industry mining standard "Standard for Responsible Mining" of the "Initiative for Responsible Mining Assurance".
• Countries of origin viewed as high-risk are deliberately not generally excluded as sources of supply in accordance with the principle of using leverage before withdrawing.
• In the coming generations of battery cells, Mercedes-Benz is already reducing the cobalt content to less than ten percent and intends to dispense with materials such as cobalt entirely through post-lithium-ion technologies with new material compositions. 

The Mercedes-Benz electric offensive is a key component of the strategic focus "Ambition2039" and a prerequisite on the way to carbon neutrality. Responsibly mined and processed raw materials provide the foundation for a sustainable Mercedes-Benz electric vehicle fleet. Respect and protection of human rights and of the environment, all the way from the mine to the finished product, are decisive in this respect. Currently, the focus is particularly on the battery raw materials cobalt and lithium.

Mercedes-Benz is taking a comprehensive approach across the whole battery technology chain - from research and development to series production. The cell is at the very heart of the battery and mastering its chemistry is therefore critical. "Mercedes-Benz's clear development goal is to significantly increase the range of future batteries through advances in energy density, to advance the production maturity of future battery technologies, to significantly reduce charging times, and to further reduce the use of critical materials. In the coming generations of battery cells, the cobalt content is already being reduced to less than ten percent. In the future, we want to use post-lithium-ion technologies with new material compositions to completely dispense with materials such as cobalt. The further optimization of recyclability and its implementation at Mercedes-Benz is also part of the holistic battery strategy," says Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG; responsible for Daimler Group Research and
Mercedes-Benz Cars COO.

Mercedes-Benz AG is taking a pioneering role with a comprehensive approach that promotes the socially acceptable and environmentally sound extraction of cobalt and lithium. The company insists on the use of strong standards for sustainability, making the industry-wide recognized "Standard for Responsible Mining" of the "Initiative for Responsible Mining Assurance" (IRMA) one of the key criteria for supplier decisions and supplier contracts within raw material supply chains. The standard is in the early stage of adoption by the industry, a process Daimler seeks to accelerate. In the company's contracts, partners will need to commit to working within their own supply chain to source exclusively from raw material suppliers who are audited in accordance with the IRMA mining standard. The supply chains will in the future also be regularly monitored. 

Countries of origin viewed as high-risk are deliberately not generally excluded as sources of supply. Instead, the approach taken here aims to improve the local situation for the people working there and to strengthen their rights. By doing so, Mercedes-Benz AG is following the recommendation of non-governmental organizations, governments and other relevant interest groups not to withdraw from high-risk countries.

In accordance with the principle of using leverage before withdrawing, the aim is to encourage the local economy while at the same time ensuring that higher standards in relation to the protection of human rights are established.

"We have had the supply chains for our Mercedes-Benz electric vehicle fleet audited in line with OECD guidance, all the way back to the mine, even though we don't source cobalt directly ourselves. Based on the insights gained, we will instruct our battery suppliers to only source cobalt and lithium from certified mining sites in the future. With this, we even go a step further and will ensure our sourcing is from mining sites compliant with the mining standard of the 'Initiative for Responsible Mining Assurance'. This way, in addition to child labor and a range of other social concerns, environmental risks in the mining of raw materials can also be minimized. By doing so, we are paving the way for clean raw materials, from which other participants in the market can also benefit," said Markus Schäfer. "Going forward, we will only work with suppliers who agree to comply with these requirements."

"Our aspiration is very clear: we want our products to contain only raw materials that have been mined and produced without human rights violations. This is one of the core elements of our sustainable business strategy. This way, we are putting an important element of our Human Rights Respect System into practice and are shaping the path to electric drive systems in a sustainable way," said Renata Jungo Brüngger, Member of the Board of Management of Daimler AG and Mercedes-Benz, responsible for Integrity and Legal Affairs.
"If there are any indications of risk, we take another, closer look at the supply chain. This involves us going beyond the direct suppliers and creating transparency, if necessary all the way back to the mine."

Cobalt supply chains: stringent selection process

Already in 2018, Mercedes-Benz commissioned the auditing and advisory firm RCS Global to establish transparency over the complex cobalt supply chains behind battery cells and to audit these at every stage in accordance with OECD Due Diligence. More than 120 suppliers were identified and 60 audits were conducted after a corresponding risk assessment. As things stand at present, there are currently no cobalt mines certified in accordance with IRMA's Standard for Responsible Mining. Cobalt is one of the raw materials in batteries that is subject to intense criticism in terms of human rights. Mercedes-Benz is therefore working with IRMA and RCS Global on a step-by-step approach for dealing with particularly challenging local situations. This approach will be taken with a limited number of cobalt mines in the Democratic Republic of the Congo, auditing them against a series of specific sets of requirements in the IRMA Standard for Responsible Mining. In addition to the human rights aspects, the environmentally friendly mining of raw materials and other key aspects relating to the consequences of industrial mining are examined. In the medium term, this approach aims on the one hand to formulate realistic expectations of the mining suppliers, while pressing for increasingly responsible practices in order to meet Daimler's requirements for sustainable supply chains. The long-term objective is a clear commitment to a process of continuous improvement. Included in this are transitional periods for the achievement of different levels of performance for an IRMA certification.

Lithium: IRMA mining standard also mandatory for suppliers

With regard to lithium, Mercedes-Benz is also working to ensure that the raw material is sustainably extracted and that the IRMA mining standard will be enshrined in the supply contracts. In order to improve the situation in the mining areas at the same time, Daimler AG is in contact with development agencies and non-governmental organizations for possible projects on site.

Sustainability in Mercedes-Benz Procurement

Sustainability is a central pillar of the Mercedes-Benz purchasing strategy. On Mercedes-Benz's way to CO₂-neutrality within the framework of "Ambition2039", the focus is on the reduction of CO₂ emissions as well as on respecting and safeguarding human rights and the responsible use of resources along the entire supply chain. The new standards for the responsible procurement of raw materials apply only in the first step for cobalt and lithium. Daimler AG takes a systematic approach to counteracting human rights violations early and actively: A strategic approach to respecting human rights, the Human Rights Respect System has been developed both for its own entities and for its supply chains. As an important measure, the company has identified potential risk raw materials. The aim is to gradually make the supply chains for these potential risk raw materials transparent and to take risk-based measures. In the next step, it is planned to extend the procedure to other raw materials, initially to other battery raw materials.

About IRMA

With the "Initiative for Responsible Mining Assurance" (IRMA), there is now for the first time a multi-stakeholder standard for industrial mining, developed in a process of intensive discussion with industry, civil society, communities and labour unions. More than 100 experts and not-for-profit organisations were involved in defining the IRMA "Standard for Responsible Mining". After more than a decade of development, the Standard was released in 2018 and independent auditing of mines began in 2019. Through its membership of IRMA, Daimler AG supports implementation of this high-bar standard, with the company's medium-term objective being to support access to certified raw materials for all players in the market. The Standard for Responsible Mining is a comprehensive standard that encompasses the four elements of Business Integrity, Planning for Positive Legacies, Social Responsibility and Environmental Responsibility, and addresses a wide range of aspects such as Legal Compliance, Resettlement, Community health and safety, Waste and materials management. Further information can be found here: www.responsiblemining.net

About RCS Global

RCS Global is a leading responsible sourcing assurance and advisory company, supporting industry and individual companies at all tiers of the global value chain to identify, assess and manage, environmental, social and governance (ESG) risks in their supply chains. Partners include automotive and consumer electronics groups, battery manufacturers and trading companies around the world. Further information can be found here: www.rcsglobal.com

Further information on the subject of sustainability in the supply chain may be found at:

Strong for human rights – Daimler goes on the offensive for a sustainable raw material supply chain
Next step in the offensive "Strong for human rights": Mercedes-Benz Cars enhances sustainability activities for the paint raw material Glimmer
Daimler intensifies activities for a sustainable raw material supply chain and joins further initiatives
Education to counter child labor – Daimler supports a social project in the Democratic Republic of the Congo with over one million euros
Daimler is committed to combating child labor: education projects in India and the Congo – joining another initiative

Mercedes-Benz AG at a glance
Mercedes-Benz AG is responsible for the global business of Mercedes-Benz Cars and Mercedes-Benz Vans with over 173,000 employees worldwide. Ola Källenius is Chairman of the Board of Management of Mercedes-Benz AG. The company focuses on the development, production and sales of passenger cars, vans and services. Furthermore, the company aspires to be leading in the fields of connectivity, automated driving and alternative drives with its forward-looking innovations. The product portfolio comprises the Mercedes-Benz brand with the sub-brands Mercedes-AMG, Mercedes-Maybach and Mercedes me - as well as the smart brand, and the EQ product and technology brand for electric mobility. Mercedes-Benz AG is one of the largest manufacturers of premium passenger cars. In 2019 it sold nearly 2.4 million cars and more than 438,000 vans. In its two business divisions, Mercedes-Benz AG is continually expanding its worldwide production network with over 40 production sites on four continents, while aligning itself to meet the requirements of electric mobility. At the same time, the company is developing its global battery production network on three continents. Sustainable actions play a decisive role in both business divisions. To the company, sustainability means creating value for all stakeholders on a lasting basis: customers, employees, investors, business partners and the society as a whole. The basis for this is the sustainable business strategy of Daimler in which the company takes responsibility for the economic, ecological and social effects of its business activities and looks at the entire value chain.

SOURCE Daimler North America - Corporate Communications

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