London — The BMW Group is stepping up its sustainability standards as it moves towards e-mobility growth by integrating sustainability requirements into all contract awards, as well as putting extensive measures in place to ensure compliance with environmental and social standards, while securing access to critical raw materials.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The carmaker said Dec. 10 that the expansion of e-mobility made value creation in the supplier network more important than ever, with its purchasing department focusing on sustainability through compliance with environmental and social standards and respect for human rights, protecting natural resources, and reducing CO2 emissions in the supply chain.
The BMW Group aims to have over 7 million electric vehicles on the road by 2030, of which two thirds will be full electric, and at the same time, it aims to reduce supply chain CO2 emissions per vehicle by 20% from 2019 levels.
One of the main areas of the carmaker's sustainability focus is the critical raw materials required for battery cells, such as cobalt and lithium.
BMW said it was limiting its use of critical raw materials and had reduced the amount of cobalt in the cathode material for the current fifth-generation battery cells to less than 10% and increased the amount of secondary nickel to up to 50%, while the e-drive no longer required the use of rare earth minerals.
The carmaker said it had also set itself the goal of significantly increasing the percentage of recycled raw materials it uses by 2030 and using raw materials multiple times in a circular economy to safeguard reserves of critical raw materials.
"The growth in e-mobility makes the idea of the circular economy increasingly important, because of the many critical raw materials needed for battery cells. Secondary material reduces CO2 emissions substantially compared to primary materials: by about factor four to six for aluminum," it said.
BMW added that, "eliminating infringements of human rights and environmental standards presents a particular challenge," particularly in lithium and cobalt, which are key components for battery cells production.
The company said it had implemented additional measures to ensure cobalt extraction and processing were in compliance with sustainability standards and to avoid problems with working conditions, such as child labor, resulting in the company sourcing its cobalt and lithium directly from the mines and making it available to battery cell suppliers.
BMW board member responsible for purchasing and supplier network, Andreas Wendt, said this allowed for predictable pricing and also enabled the company to "anchor our sustainability standards in contracts and ensure cobalt and lithium are mined and processed in an environmentally and socially sustainable manner. We saw this for ourselves when we inspected mines in Australia and Morocco."
BMW is also actively participating in local artisanal mining projects to ensure respect for human rights and compliance with environmental, health and safety standards.
This includes the Cobalt for Development initiative in Congo, which BMW formed in 2018 with other industry partners to develop and professionalize artisanal mining, so that it meets BMW's sustainability requirements and could eventually become a cobalt sourcing option in the long term.
BMW said it had also implemented additional measures to tighten compliance with environmental and social standards for the additional critical raw materials with increased involvement through corresponding agreements made directly at particularly critical points in the supply chain.
It said this focused mainly on mines and smelters, which had to be certified according to strict, internationally recognized standards, and to achieve this, BMW was actively involved in international standardization initiatives focused on raw material extraction, such as the IRMA standard.
Other sustainability measures being implemented include sourcing its fifth-generation battery cells from four suppliers, reducing dependence on individual suppliers.
The carmaker has also made flexibility a criterion for choosing suppliers, with it implementing 20% flexibility up or down in the quantities purchased for cells.
Since 2014, the BMW group has contractually obliged all direct suppliers to respect human rights, comply with expanded environmental and social standards, with these requirements also contractually passed on to subcontractors.
It also ensures that compliance with defined environmental and social standards is controlled through transparent processes before, during and after a contract is awarded.
The carmaker said its sustainability drive had already had some results, with CO2 emissions from its BMW iX supply chain, which used renewable green power to produce battery cells and increased use of secondary material, reduced by 17% compared to the same vehicle produced without these measures.
Wendt said the company saw sustainability is an integral part of all purchasing activities.
"As we accommodate the planned growth in electrified vehicles in the supplier network, we are at the same time integrating our sustainability requirements into all contract awards. In this way, we are taking sustainable development to the next level," Wendt said.