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Summary
Mercedes lost its number one position in the second edition of the Leaderboard to Ford. However, the automaker continues with a strong performance across both the fossil-free and environmentally sustainable and human rights and responsible sourcing sections. Mercedes made some notable improvements during 2023, in particular on fossil free and environmentally responsible aluminum – for which it received an 18% score increase.
Mercedes has room to move forward and reclaim its number one title through disclosing disaggregated supply chain emissions like fellow industry leader Tesla did this year, as well as prioritizing their commitment to the rights of Indigenous Peoples.
Key Findings
- Discloses supply chain emissions and has set a target to be net zero by 2040 across all stages of its value chain, with a new interim target to cut value chain emissions by 50% by the end of this decade.
- Has set clear requirements for suppliers on setting emissions targets and disclosing water usage.
- Top three scorer across the fossil free and environmentally responsible steel, aluminum and batteries categories. Made especially strong progress on aluminum decarbonization this year by setting new targets and signing a letter of intent with an aluminum producer to develop and use “practically CO2-free” automotive aluminum.
- Decent policy for responsible sourcing of transition minerals and above-average workers’ rights policies, although Mercedes should also commit to recognize unions in its U.S. plants through a fair “majority sign up" process.
- Also strengthened performance on recycling and reuse this year by disclosing progress on a new closed-loop process for steel production scrap at its Sindelfingen plant and a new battery recycling factory in Kuppenheim this year, which will use efficient hydrometallurgical processing.
- Decent scores in the human rights section across the General, Transition Minerals and Workers’ Rights categories. Also achieves the highest score on Indigenous Peoples’ rights, but with this score at just 17%, it still has significant room for improvement.
Score Breakdown
Fossil-Free & Environmentally Sustainable Supply Chains
Human Rights & Responsible Resourcing
Supply Chain News & Progress
Latest on Mercedes
Supply chain transformation is a risk management imperative and opportunity for a competitive edge. Leading brands are already securing a first-mover advantage and leveraging their power to transform legacy supply chains into a force for good. The revolution is underway.
Honda and Mercedes face allegations of illegal union-busting in the U.S.
Global automakers Honda and Mercedes are facing allegations that they have engaged in illegal union-busting activities in the U.S. Honda has been accused by the National Labor Relations Board of violating the rights of workers at a Greensburg, Indiana, factory by illegally cracking down on union organizing. Mercedes, meanwhile, has been accused by the UAW of engaging “in a relentless anti-union campaign” including the firing of employees who were pro-union and holding frequent captive-audience meetings to spread anti-union views, according to the filing.
Mercedes and H2 Green Steel announce agreements in both Europe and North America
Mercedes-Benz and H2 Green Steel have signed a binding agreement for the delivery of about 50.000 tonnes of green steel to the car maker’s European production annually. In a pioneer move Mercedes-Benz has also signed a memorandum of understanding with H2 Green Steel for the potential supply of green steel produced in North America.
Mercedes announces new supply chain goals, including steel, aluminum, battery recycling, and human rights risk assessment
At Mercedes annual ESG Conference 2023, Mercedes announced further supply chain priorities, plans, and investments across several areas.
Mercedes set “the goal of a green steel supply chain from 2039 at the latest,” including “low-CO2” steel from scrap already part of their vehicles, further details on their partnerships with H2 Green Steel and SSAB, including prototyping parts that contain “almost fossil-free direct-reduced iron,” and their intention to launch models from 2025 that use “almost CO2-free” steel. Like BMW, Mercedes also stated they see themselves as “promoting the transformation of the steel industry.”
Regarding aluminum, Mercedes stated they are working on decarbonization, however did not provide specific targets or milestones. They did state that “a third of the aluminium used in Europe” for EVs will be made with renewable energy, and that they are testing aluminum from Hydro with a minimum 25% scrap content, with the aim of it being incorporated into production this year. Each results in 50% and 70% lower CO2 emissions, respectively. Also with Hydro, Mercedes plans to pilot “very low CO2” aluminum by 2030.
Mercedes’ new battery recycling factory will increase their operations and achieve a recycling rate of more than 96%, with the potential to recycle “2,500 tonnes of battery modules per year.” They are also working with partners in China on recyclable materials. Additionally, Mercedes are aiming to reduce the CO2 footprint of battery cells by 40% with further emissions reductions’ possible with renewable energy to produce and refine raw materials.
Mercedes also shared further details on their timeline and milestones to assess 24 raw materials with elevated human rights risks: 70% by 2025 and completed by 2028. They also stated that this year, they plan to “establish risk mitigation measures for all raw materials affected by the future EU battery regulation.”
Mercedes establishes multiple partnerships on steel, aluminum, and lithium with IRMA certification requirement
Mercedes will procure “low-carbon aluminum” from Norsk Hydro, launched a partnership with SSAB to “introduce fossil-free steel into vehicle production as early as possible,” their China operations (Beijing Benz Automotive, BBAC signed an MoU with Baosteel for reduced-emissions steel and, in the future, green steel, and signed a lithium supply agreement with Rock Tech Lithium Inc. that will include creating a roadmap to achieving “CO₂ neutral production” of lithium hydroxide by the end of 2030. It also requires that all lithium hydroxide shall be sourced from mining sites audited by the Initiative for Responsible Mining Assurances (IRMA). Mercedes also recognized an established supplier, Big River Steel, with a sustainability award.
Allegations of forced labor and human rights violations in rare earth supply chains
The Business and Human Rights Resource Center has documented allegation that implicate Mercedes’ supply chains in forced labor and human rights violations in rare earth mining.
Our Vision
01 — Equitably
Respecting and advancing the rights of Indigenous Peoples, workers, and local communities throughout the supply chain.
02 — Sustainably
Preserving and restoring environmental health and biodiversity across supply chains, while reducing primary resource demand through efficient resource use and increased recycled content.
03 — Fossil-free
100% electric and made with a fossil fuel-free supply chain.