Active Engagement with Automakers On the Impacts of their Supply Chains Can Mitigate Risks, Drive Long-Term Value, and Promote Positive Social and Environmental Outcomes
The Lead the Charge network launched a briefing for investors examining the risks and opportunities embedded within automotive supply chains as the industry transitions to electric vehicles.
“Investors deeply care that automakers uphold their human rights responsibilities to respect the human rights of workers, communities, and Indigenous Peoples throughout their supply chains, as these can ultimately impact their bottom line,” said Aaron Acosta of Investor Advocates for Social Justice, a nonprofit organization representing faith-based investors.
“This briefing by Lead the Charge is a useful tool for automotive investors seeking to navigate the emerging and complex landscape of ESG risks within EV supply chains.”
Lead the Charge, a global coalition of partners working for an equitable, sustainable, and fossil-free auto supply chain, made headlines with their leaderboard, an annual evaluation of the efforts by the world’s leading automakers to eliminate emissions, environmental harms, and human rights violations from their supply chains.
This briefing shines a light on a range of ESG risks within EV supply chains that can impact the financial performance of automotive companies. It also examines how effective supply chain ESG management can unlock opportunities for long-term value creation and drive positive environmental and social outcomes across multiple industries within investment portfolios.
“Ultimately, supply chains riddled with abuses present serious material risks to investors and can slow down the transition to EVs,” said Xavier Sol of Transport & Environment (T&E), the leading European advocacy group for clean transportation. “Investors, equipped with knowledge of best practices, can steer automakers in the right direction so that they can mitigate the risks and capitalize on the financial opportunities linked to supply chain sustainability.”
Rainforest Foundation Norway, another member of Lead the Charge, works with investors to address risks of deforestation and to the rights of Indigenous and forest peoples within global supply chains. They say that proactive investor action is key.
“Automakers’ supply chains frequently threaten and pose risks toward Indigenous Peoples’, their local communities, their livelihoods, and the environments they depend on,” said Jasmine Puteri, a senior supply-chain expert at Rainforest Foundation Norway.
“Investors have a critical role in ensuring that companies respect these rights and minimize environmental damage. Proactive investors who address this issue, as well as the climate impacts and deforestation within supply chains and their investment portfolios will benefit more in the long run by minimizing these risks.”
The Lead the Charge network includes partners who work across multiple geographies and issues, with expertise in climate, environmental justice, human rights, Indigenous rights, heavy industry, ESG and more.