Umicore Launches Responsible Sourcing Frameworks for Nickel and Lithium
Responsible sourcing and supply chain due diligence are an essential part of the Umicore way, the cornerstone of everything we do at Umicore, linked to our values and our commitment to the principles of sustainable development. That’s why we work so hard to ensure that our raw materials, including our battery materials, , are responsibly sourced and align with our sustainability ambition for Zero Harm in our operations and value chain.
This month, we’re proud to take another step on this important journey with the introduction of new dedicated Sustainable Procurement Frameworks for Nickel and Lithium.
This exciting development follows the lead of our long-standing Sustainable Procurement Framework for Cobalt. Set up in 2012, along the principles of the OECD Due Diligence Guidance for Responsible Business Conduct and Responsible Mineral Supply Chains, the Cobalt Framework aimed to prevent and mitigate risk in our cobalt supply chain, with a strong focus on human rights violations, child labor and business ethics, linked to the sourcing of cobalt from, among others, the Democratic Republic of Congo (DRC). Since then, we have expanded our Cobalt Framework with a broader ESG focus to include, but not limited to, CO2 emissions, waste, water, health and safety, and community engagement. We report annually on our due diligence practices for sourcing cobalt, through a publicly available compliance report.
Building on this market-leading example, we are now ready to apply the same robust processes to nickel and lithium. Achieving this will be an important proof-point in our 2030 RISE strategy, of which a key pillar is our ambition to be a Sustainability Champion, in our own operations and value chain, as well as supporting our suppliers and customers on their sustainability journey.
Identifying and mitigating risks in extracting lithium and nickel
Currently, much of the world’s lithium comes from the salt flats of South America, where it is extracted by pumping and evaporating mineral-rich brine. Australia is also one of several countries where Lithium is sourced , and here it is "hard rock" extracted from mines containing the mineral spodumene. Nickel is found in many parts of the world, with Indonesia being a fast-growing exporter. Nickel concentrates are often found in remote forested areas of the country.
For both metals – and as with cobalt – there are risks associated with their extraction that we need to identify and manage through our responsible sourcing frameworks. For example, for lithium extracted from brine, we pay particular attention to water use and how this may impact local communities. In the case of lithium from spodumene, one issue of concern, among others, is the CO2 footprint. For nickel mining in Indonesia, we concentrate on the risks associated with deforestation and biodiversity.
By working with our suppliers and other stakeholders in all these areas, we aim to mitigate risk as much as possible and work towards truly responsible value chains.
How the process works
Barbara Cooreman, Program Lead for Responsible Sourcing, explains the process for building the Sustainable Procurement Frameworks for Nickel and Lithium: “The first step is to establish supply chain visibility and traceability, to track the materials back to the mines of origin. We then work on risk assessment, building a detailed picture of risks, in the countries of origin and transit, risks related to the specific material itself and risks related to the supplier in question. When risks have been identified, we develop plans together with the supplier to prevent and mitigate them. The final stage is reporting on our actions taken and ensuring that our processes are third-party certified."
This isn’t a checklist to say we’re compliant – it’s about making sure that our impact on people, society, and the environment is as small as possible.
As of 1 April 2023, the new frameworks will become applicable to our nickel and lithium suppliers. To start the journey, suppliers will be expected to complete self-assessment questionnaires, giving a detailed overview of, among other things, their business activities, ESG policies and due diligence. As well as using this information, Umicore will also use a supplier screening process, informed by our own research and that of stakeholders. As issues arise, Umicore will engage with suppliers and work together on remediation measures. These could include setting up policies and processes or organizing training and capacity-building. Umicore will also perform regular site visits to understand what’s happening on the ground and, when required, audits may be performed. Ultimately, suppliers will be asked to work with third parties to achieve official certification against recognized responsible sourcing and ESG standards by 2025 latest. Throughout our due diligence efforts, our aim is to maintain good relationships with our suppliers and work together on this important journey.
With the new frameworks for lithium and nickel adding to cobalt, our customers will have full confidence that the battery materials provided by Umicore are sourced responsibly, ethically, and sustainably.
Raising the bar for responsible sourcing
We ask all our suppliers to adhere to Umicore’s Global Sustainable Sourcing Policy, and the new lithium and nickel frameworks complement this parent policy with added guidance through a risk-based approach. Barbara concludes “As we showed with our work on cobalt, we aim to develop a best-in-class approach that goes beyond legal compliance and aims at real impact. We work closely with people on the ground in a mutually beneficial relationship based on strong ethical business standards, trust and shared commitments."
The industry recognized that Umicore truly raised the bar for responsible sourcing of cobalt and now the logical next step is to follow this path with nickel and lithium, and beyond that we are currently working on a framework for manganese, which we expect to launch later this year.
What is responsible sourcing?
Responsible sourcing is the practice of procurement / supply chain management in line with:
- Ethical business practices (transparency, accountability, no bribery, no corruption)
- Respecting human rights and labor rights
- Protecting human and environmental health
- Combating forced labor and child labor
- Conducting due diligence in supply chain
- Help to create positive impact and add value