1、Kapitelname01Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexResponsible Raw Materials Report 2023Volkswagen Group Responsible Raw Materials Report 2023201Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406Anne

2、xContents3 Foreword 5 General Disclosures 6 Responsible Supply Chain(ReSC)System 8 Raw Materials Due Diligence Management System(RMDDMS)11 Social,Human Rights and Environmental Risks in Scope 12 Priority Raw Materials 13 Regulatory Frameworks and Guidelines 16 Main Tools of the RMDDMS 17 Supply Chai

3、n Grievance Mechanism18 Limitations 19 Commitment to Initiatives 20 DRIVE Sustainability 20 German sector dialogues on the implementation of the National Action Plan for Business and Human Rights(NAP)21 Initiative for Responsible Mining Assurance(IRMA)21 Responsible Minerals Initiative(RMI)22 2023 H

4、ighlights 23 Raw Materials 24 Battery Raw Materials 24 Lithium 28 Cobalt 31 Nickel 33 Graphite 35 Conflict Minerals 35 Tin,Tantalum,Tungsten and Gold(3TG)38 Other Raw Materials 38 Aluminum 41 Copper 43 Leather 45 Mica 48 Platinum Group Metals(PGM)51 Natural Rubber 54 Rare Earth Elements(REE)57 Steel

5、 59 Magnesium 60 Cotton 61 Outlook for 2024 63 Annex 64 List of Abbreviations 65 List of Initiatives and Associations 66 List of 3TG Smelters 73 List of 3TG Countries and territories of origin ContentsVolkswagen Group Responsible Raw Materials Report 20233Kapitelname01 Foreword02General Disclosures0

6、3Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexForeword01 Volkswagen Group Responsible Raw Materials Report 2023401 Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexForewordDear readers,The Volkswagen Group pursues the vision of ena

7、bling sus-tainable mobility for future generations.As one of the worlds largest automotive groups,we recognize our duty to make a difference to generate meaningful value for both society andthe environment.Our legal,social and environmental responsibilities extend well beyond our Group across all ou

8、r supply chains.These include more than 63,000 supplier locations in 96 countries around the world.The holistic approach of our regenerate+sustain-ability strategy provides the basis for advancing sustainability together with our partners and stakeholders.Focuses include environmental protection and

9、 human rights due diligence.We take our responsibility for sustainable procurement of raw materials very seriously and are continuously working with indirect suppliers in upstream supply chains where the challenge is greatest.We identify,assess and address risks through our Responsible Supply Chain

10、System,currently covering 18 priority raw materials and their respective supplychains.We share information across our brands and regions through our Sustainability Procurement Network of more than 110 experts,which serves as a component in managing sustain-ability in our supply chains.To increase tr

11、aceability,we work with our business partners and their respective suppliers,based on the requirements of our Code of Conduct.We also collaborate with like-minded stakeholders and companies via cross-industry initiatives to develop common standards and approaches to sustainability due diligence.In t

12、his report,you will find information on our approach and methodology,the raw materials we have identified as our priority focus and our activities in 2023.It highlights not only our progress in terms of transparency and risk mitigation for raw materials procurement,but also outlines challenges we co

13、ntinue to face in our global,complex and fragmented supply chains.In 2023,the first year in which the Supply Chain Due Diligence Act came into force,the Volkswagen Groups focus was on full and best possible compliance with the obligations imposed by the law.We have updated our procurement processes

14、and keep monitoring new developments to include new regulations such as the EU Battery Regulation and the EU Deforestation Regulation,but also use our global impact to improve supply chain due diligence.We hope you find this report informative and invite you to share your feedback through Dirk Groe-

15、Loheide Member of the Extended Executive Committee,Group ProcurementMember of the Board,Volkswagen BrandVolkswagen Group Responsible Raw Materials Report 20235Kapitelname Rohstoffbezeichnung01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rig

16、hts and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance Mechanism General Disclosures02 Volkswagen Group Resp

17、onsible Raw Materials Report 2023601Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures0

18、4Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Responsible Supply Chain(ReSC)System The Volkswagen Group is one of the largest automotive manu facturers globally.In this position we recognize our impact on people and the planet

19、.In order to align our own activities and the activities of the suppliers in our supply chains with leading practice in respecting human rights and the environment,we continue to take proactive steps.Our efforts are part of our broader commitment to fulfilling our legal,social and environmental resp

20、onsibilities,not only in the Volkswagen Group but also in our supply chains.Our policy on sustainable materials reflected in our Raw Materials Due Diligence Management System(RMDDMS)is based on global normative guidelines including the OECD Due Diligence Guidance for Responsible Supply Chains of Min

21、erals from Conflict-Affected and High-Risk Areas(OECD Minerals Guidance).This Guidance provides a five-step framework with detailed recommendations to ensure that the minerals we use are responsibly mined or sourced,respecting human rights and avoiding contributing to conflict.In accordance with the

22、 fifth step of the framework,we there-fore publicly report on our supply chain due diligence policies,processes and practices in this Responsible Raw Materials Report 2023.The report details our approach and covers the raw material-specific human rights and environmental supply chain due diligence a

23、ctivities that were implemented in 2023.It pro-vides an overview of the progress we made with our RMDDMS and lists our activities for 18 high-risk raw materials that we have prioritized for more in-depth risk management.In addition to the 16 raw materials covered in previous years,we have expanded o

24、ur scope to include cotton and magnesium.While we continue to face challenges in sourcing raw mate-rials responsibly,such as complex and sometimes opaque raw materials supply chains and varying legal requirements around the world for sustainability standards,we are also taking further steps to impro

25、ve the effectiveness of our risk management.We know that we need to continue to engage with our suppliers,turn our focus increasingly to risk mitiga-tion,and more effectively assess whether the actions we have taken are driving positive impacts for the people and environ-ments affected by our raw ma

26、terial supply chains.We are proud of our progress and the fact that this is our fourth time reporting publicly,although we recognize that,for some issues and raw materials,we are in the early stages.The Responsible Raw Materials Report 2023 is structured as follows:We first present the Volkswagen Gr

27、oups due diligence approach to supply chains in general and our raw material-specific management system in particular,including governance,scope and main tools used.We then describe the key activities and achievements for our 18 priority raw materi-als in 2023 and conclude with an outlook to 2024.Fu

28、rther information on Environmental,Social and Governance(ESG)topics is available on the Groups corporate website and in the 2023 Sustainability Report.Responsible Supply Chain(ReSC)SystemIn 2022,in preparation for the German Supply Chain Due Dil-igence Act(LkSG),we adapted our management approach in

29、 procurement and introduced extensive measures to facilitate compliance.We developed the Volkswagen Group Respon-sible Supply Chain(ReSC)System as an overarching due diligence approach for our supply chains and integrated the existing Raw Materials Due Diligence Management System into the ReSC Syste

30、m as a deep-dive measure for risks in ourupstream supply chain.The aim of the new holistic approach is to further enhance our management of risks occurring along the Volkswagen Groups supply chains.We aim to respect human rights and avoid and minimize social and environmental risks based on a system

31、atic risk analysis and in close collaboration with our suppliers and business partners.The approach also intends to help end breaches and continu-ously improve suppliers sustainability performance.It includes controls and a disclosure system to ensure transparency.A grievance mechanism at Group leve

32、l to provide an early-warning risk-awareness system is also in place.Implementation of the management approach is mandatory and is enshrined in corresponding policies for the Groups brands and controlled companies.The various procedures and measures that the ReSC System entails are described in deta

33、il in our 2023 Sustainability Report(pages 121127).The Responsible Raw Materials Report 2023 focuses on the Raw Materials Due Diligence Management System.Kapitelname Rohstoffbezeichnung01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights a

34、nd Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Responsible Supply Chain(ReSC

35、)System Responsible Supply Chain(ReSC)SystemHuman Rights Focus SystemRisk assessment based on the nature of the suppliers business activitiesIndividual supplier riskStandard measuresDeep diveMeasureslowmediumhighall suppliersmedium-/high-risk suppliershigh-risk suppliersAnalysisAssessmentMitigationI

36、mpact evaluationDeep DiveMeasuresProbability and severity of human rights and environmental risksRaw Materials Due Diligence SystemCountry Risk FilterAcross all tiers+n tierlowlowhighhigh Code of Conduct for Business Partners Supply Chain Grievance Mechanism Sustainability Rating Supplier TrainingRi

37、sk Analysis Media ScreeningVolkswagen Group Responsible Raw Materials Report 20237Volkswagen Group Responsible Raw Materials Report 20237Volkswagen Group Responsible Raw Materials Report 2023801Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human R

38、ights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Raw Materials Due Dili

39、gence Management System(RMDDMS)Raw Materials Due Diligence Management System(RMDDMS)One deep-dive measure of the ReSC System,specifically used to manage risks along raw material supply chains,is the Volkswagen Groups Raw Materials Due Diligence Manage-ment System(RMDDMS).The RMDDMS covers the 18 raw

40、 materials identified as priority raw materials and their respec-tive supply chains.The Volkswagen Groups supply chain is extremely com-plex,globally distributed and subject to constant change.It includes more than 63,000 direct supplier sites in more than 96 countries involving thousands of parts m

41、ade from a wide range of raw materials.One product supply chain can include as many as nine levels and one single car component can have more than 1,000 suppliers.It is therefore essential that we take a risk-based approach and prioritize areas of focus in our due diligence efforts.The risk-based du

42、e diligence provides the steps we should take to identify,prevent and mitigate actual and potential adverse effects in the supply chain.It also ensures that we do not contribute to conflict in our purchasing activities through indirect support to non-state armed groups in the extraction,transport,tr

43、ade,handling and export of raw materials.Different supply chains tend to have different levels of risk.Raw material supply chains require special focus,as our abstract risk analysis as part of the ReSC System showed a high exposure to human and environmental risks which are often more systematic and

44、 prevalent with indirect suppliers.For prioritized raw materials,the RMDDMS includes further assessments which facilitate the deduction of mitigating and preventive measures for systematic risks as well as a review of the effectiveness of these measures.Seeking alignment with the five-step framework

45、 of the OECD Minerals Guidance,we developed and implemented the RMDDMS in 2020.It is based on the Volkswagen Group Policy on Sustainable Raw Materials which sets out our com-mitment to responsible and transparent business practices throughout our raw materials supply chains.The policy out-lines our

46、responsibility to respect human rights,the obliga-tion to implement a human rights due diligence process and measures to remediate negative human rights impact.The Volkswagen Group Policy on Sustainable Raw Materials is being reviewed and will be updated in 2024.Through the RMDDMS,we aim to improve

47、transparency in our upstream supply chain,assess and identify risks,and engage with suppliers and stakeholders to prevent and mitigate po-tential negative impact on people and planet.The graphic below provides a visual depiction of our step-by-step approach to raw material due diligence:Volkswagen G

48、roup Responsible Raw Materials Report 2023901Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Dis

49、closures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Raw Materials Due Diligence Management System(RMDDMS)AssessmentMitigationImpact EvaluationIdentification of 18 priority materialsInternal assessment of how the RMDDMS is p

50、erformingApproach:direct engagement with our direct suppliersEngage in cross-industry initiatives or in-country projectsAssignment of sustainability lead brands for raw materialsAnnual reporting on due diligence efforts in public disclosureSupplier engagement to raise awareness and better understand

51、 the risksCollaboration on high-risk supply chains through joint projects and initiativesIdentification of affected vehicle parts and main suppliers to the Volkswagen GroupRisk mitigation measuresStep-by-step approach to raw material due diligence0107AB020804060305RMDDMS GovernanceIn line with the O

52、ECD Minerals Guidance,the RMDDMS is overseen by a senior-level Steering Committee comprised of senior management of the Sustainability function from Procurement across all relevant brands and regions of the Volkswagen Group,including the Head of Global Supplier Risk and Sustainability Management of

53、Volkswagen Group Procurement.The Steering Committee meets quarterly.The due diligence activities are coordinated through a Working Group comprising representatives from Sustainability Manage-ment in Procurement departments across the Volkswagen Groups brands.Each of the identified priority materials

54、 is assigned to a“Brand Lead”to ensure in-depth knowledge and ongoing engagement with relevant suppliers and stakeholders for each of the raw materials.This Brand Lead is a representa-tive from one of the Volkswagen Groups brands and responsi-ble for coordinating and implementing the RMDDMS activiti

55、es.In the reporting period,the internal capacities for Sustainability functions in Procurement were strengthened,both in the Volkswagen Group as well as in the respective brands,and thefrequency of Working Group meetings was increased.Volkswagen Group Responsible Raw Materials Report 20231001Forewor

56、d Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 0

57、5Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Raw Materials Due Diligence Management System(RMDDMS)RMDDMS GovernanceSenior-Level Steering CommitteeSenior Management of Sustainability from Procurement RMDDMSMeets quarterly as the “Group Staff Meeting Sustainability.”Rep

58、resents all relevant brands and regions of the Volkswagen GroupWorking GroupRepresentatives or“brand leads”assigned to each priority raw materialMeets bi-weekly to coordinate RMDDMSactivities across the materialsAccountable for all steps according to the RMDDMS and alignment with global best practic

59、e.Oversees risk analysis and mitigation measures and their implementation for all relevant high-risk raw materials.For more information on the steering bodies see the detailed version in the 2022 Responsible Raw Materials Report(page6)Risk mitigation (i.e.contractual requirements,audits,on-the-groun

60、d projects,training)Risk Analysis (i.e.gather data from suppliers,engage with stakeholders)OverseeFeeds intoVolkswagen Group Responsible Raw Materials Report 20231101ForewordResponsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks

61、 in ScopePriority Raw MaterialsRegulatory Frameworks and GuidelinesMain Tools of the RMDDMS Limitations02General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406AnnexSupply Chain Grievance MechanismGeneral Disclosures Social,Human Rights and Environmental Risks in Scope Soc

62、ial,Human Rights and Environmental Risks in ScopeEnvironmental Water,including water pollution,water consumption,amount of water(flood or drought)and access to water and sanitation Handling,storage and disposal of waste Production and use of pollutants and hazardous chemicals Air,including air pollu

63、tion and greenhouse gas emissions Noise and vibrations Destruction of forests and soils Biodiversity,including damage to natural habitats,wildlife,plants and ecosystems,including ecosystem servicesBiodiversityPollutionWasteWaterCommunities Causing harmful soil change,water and air pollution,noise em

64、issions and excessive water consumption,which affect natural resources and health Forced evictions and/or expropriations of land,forests,bodies of water Protection of the rights of indigenous peoplesCommunities rightsSocial&Human Rights Child labor Forced or compulsory labor Discrimination,incl.sexu

65、al harassment Direct or indirect support to non-state armed groups and/or public or private security forces Torture Health and safety at work Trade union freedoms and freedom of association Payment of adequate wages/salaries Safety of installationsHuman rightsWorking conditionsThe risk categories ar

66、e listed in abbreviated form in Section 04 of this report for every raw material.The risks categories used in our RMDDMS are reviewed regularly to reflect legal requirements and best practices.For this Responsible Raw Materials Report,we summarized the risks in scope in seven sub-categories aligned

67、with the European Sustainability Reporting Standards(ESRS):Environmental risks are summarized in the sub-clusters pollution,waste,water and biodiversity.Social risks are covered by the sub-clusters human rights and working conditions.The impact of supply chain activities on local communities is comp

68、rised in the sub-cluster communities rights.01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Di

69、sclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Priority Raw Materials 12Volkswagen Group Responsible Raw Materials Report 2023Raw Material Lead Brands in RMDDMS are Volkswagen|Audi|Porsche|MAN|Scania1 PGM Platinum Gro

70、up Metals 2 REE Rare Earth Elements Battery Raw MaterialsOther Raw MaterialsConflict Minerals(3TG)AluminumNickelLeather Mica Natural Rubber Steel Tungsten CobaltCopperTantalum NEW CottonGold 20Raw material experts across our groupPriority Raw MaterialsTo address our due diligence obligations in ligh

71、t of the complexities and scale of our raw materials supply chains,we followed the OECD-compliant risk-based approach and developed a methodology to select priority raw materials based on the severity of potential human rights and environmental impacts.For the first risk assessment,we used databases

72、 such as Maplecrofts global risk data,raw material-specific risk analyses and other reports that outline ESG risks in supply chains.In addition,we reviewed cases from our grievance mechanism and gathered relevant data through outreach to stakeholders such as NGOs and n-tier suppliers.We also conside

73、red our leverage in raw materials supply chains,and at times prioritized raw materials where we considered the risk less severe but where we had high leverage.In these cases,we saw aclear opportunity to make a positive impact.In the reporting period,we reassessed our raw material prioritization.We e

74、xtended the scope of the RMDDMS and included two additional raw materials with particularly high levels of sustainability risks cotton and magnesium resulting ina total of 18priority raw materials.Tin LithiumNatural GraphitePGM1 NEW MagnesiumREE2 Volkswagen Group Responsible Raw Materials Report 202

75、31301Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to I

76、nitiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Regulatory Frameworks and Guidelines Regulatory Frameworks and Guidelines The Volkswagen Group is committed to adhering to all appli-cable national and international legislation.Beyond this,we confirm our commit

77、ment to major international agreements and declarations,which determine important cornerstones for our actions.These include in particular:The UN Universal Declaration of Human Rights,which is codified in the International Covenant on Civil and Political Rights and in the International Covenant on E

78、conomic,Social and Cultural Rights The Core Labour Standards of the International Labour Organization(ILO)The UN Guiding Principles on Business and Human Rights The OECD Guidelines for Multinational Enterprises The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-A

79、ffected and High-Risk Areas The principles of the UN Global CompactThe Volkswagen Group continuously monitors and adapts its risk management approach in procurement to meet the re-quirements of new laws such as the German Supply Chain Due Diligence Act(LkSG)which came into force on January 1,2023 an

80、d prepare for upcoming regulations at both na-tional and international level.Relevant upcoming sustainabil-ity regulations on a European level include for example the EU Battery Regulation(EUBR)and the EU Deforestation Regula-tion(EUDR).Another focus topic is the Corporate Sustainabil-ity Reporting

81、Directive(CSRD),and the associated European Sustainability Reporting Standards(ESRS)will be applied for 2024 reportingof the Volkswagen Group.Preparation for upcoming EU sustainability regulationsIn 2023,we closely monitored proposals for new regulations.However,before final legislative texts are en

82、dorsed,the drafts are altered,amended and fine-tuned.Therefore,preparation for the new legislation is a process which will be ongoing until the implementation guidelines and specifications have been defined,open questions resolved and new processes established.In the reporting period,we undertook pr

83、eparatory measures such as:Identify relevant aspects for the team working on responsible sourcing practices(based on the final versionof the respective regulation).Establish Group-wide working group to coordinate all activities on new sustainability regulations,specifically EUBR and EUDR,across bran

84、ds and regions.Create shared understanding on the scope of the due diligence requirements and specific legal terms;align with internal departments such as Legal,Customs,etc.Identify parts and suppliers in scope of the due diligencerequirements.Conduct gap analysis to identify potential need for chan

85、ges in internal processes and systems,agree on working packages and assign responsibilities.Identify necessary updates to contractual requirements such as the battery raw materials specification sheet.Determine suitable tools to support due diligence.In addition,the Volkswagen Group also initiated d

86、iscussions with suppliers to achieve a common understanding of the regu-lations.Alignment on expectations and tools is required in order to standardize audits and questionnaires and reduce the efforts for suppliers.Here,we also engaged with industry initiatives such as Drive Sustainability and the R

87、esponsible Minerals Initia-tive(RMI),with the aim of driving industry-wide good practice.EU Battery Regulation(EUBR)The EU Regulation concerning batteries and waste batteries(EU Battery Regulation)was published on July 12,2023,and will replace the existing Batteries Directive dating from 2006.The EU

88、BR aims to improve current regulations by making batteries used in the EU more environmentally friendly and increasing the lifespan of electronic devices used by consumers.The due diligence chapter of the regulation(chapter VII)will apply from August 18,2025.In view of the expected growth in battery

89、 demand,the EU puts battery due diligence obligations on economic operators that place batteries on the Union market or put them into service,going beyond the voluntary efforts from actors in the battery supply chain that are already in place.Annex X of the EUBR provides a list of raw materials and

90、risk categories to focus on when designing and implementing battery due diligence policies.The list of social and environmental risk categories is far more extensive than existing due diligence legislation and will require a thorough review of our RMDDMS.While the Volkswagen Group prepared for the n

91、ew regulation in the reporting period,sustainability was already a significant fo-cus area in our battery supply chains and our responsible sourc-ing practices before that and a large part of our internal processes are already aligned with the EUBR due diligence requirements.EU Deforestation Regulat

92、ion(EUDR)The EU Regulation on deforestation-free products(EU De-forestation Regulation)came into force on June 29,2023.It impacts seven specific commodities,including leather and natural rubber as well as derived products.The new EUDR reg-ulation will require any company importing or exporting these

93、 commodities and products into or out of the EU as well as plac-ing them on the EU market to prove that the products are not linked to deforestation and have been produced in accordance with the relevant legislation of the country of production.The provisions will enter into application from Decembe

94、r30,2024.The Volkswagen Group has started analyzing theEUDR and is taking steps to align its due diligence approach,particularly for leather and natural rubber,with the legisla-tive requirements.Volkswagen Group Responsible Raw Materials Report 20231401Foreword Responsible Supply Chain(ReSC)System R

95、aw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Gr

96、ievance MechanismGeneral Disclosures Main Tools of the RMDDMS Main Tools of the RMDDMSWhile the challenges and solution approaches can vary greatly depending on the high-risk raw material in focus,there are a number of tools that are considered particularly useful in the context of the RMDDMS.These

97、are presented below.Raw Material Specification SheetsThe Volkswagen Group uses a Code of Conduct for Business Partners(CoC BP)as a mandatory component of all contracts with direct suppliers.It sets out our expectations of business partners with respect to key human rights,environmental,social and co

98、mpliance standards,based on international standards,as well as objectives,rules and policies of the Volkswagen Group.We also call on our tier-1 suppliers to pass these requirements down along the supply chain.As a key component of our raw materials due diligence,we work on developing and implementin

99、g contractually binding specification sheets for our high-risk raw materials.The use of the specification sheets defines our raw material-specific human rights and environmental expectations towards our suppliers and ensures that they are fulfilled.For example,specification sheets can include requir

100、ements on supply chain transparency and the implementation of certain industry-specific sustainability standards at important pinch points in the supply chain.To date,we have developed specification sheets for the following priority raw materials:Battery raw materials lithium,cobalt,nickel and nat-u

101、ral graphite:rolled out across the Volkswagen Group in 2020.Preparing for compliance with the new EU Battery Regulation,the specification sheet for our battery raw materials was updated in 2023 Aluminum:piloted by AUDI AG and Volkswagen in 2022,rolled out across the Volkswagen Group in 2023 Mica:pil

102、oted by Porsche,AUDI AG and Scania in 2022,rolled out across the Volkswagen Group in 2023 Leather:rolled out across the Volkswagen Group in 2023 Natural rubber:specification sheet developed in 2023Direct business partners who supply a product that contains any of the raw materials in scope are reque

103、sted to comply with the specification sheets for all new contracts.However,when rolling out the sustainability specification sheets across the Volkswagen Group for the materials in scope,we strongly encouraged our suppliers with existing contracts to also comply with the specified requirements.We ex

104、pect our direct suppliers to pass on these requirements to their respective suppliers and into the upstream supply chain alongside theCoC BP.AuditsAudits are one of the key tools for assessing risks in our upstream supply chains and consequently identifying mit-igation measures.They tie in with othe

105、r tools used for our raw material due diligence and help promote transparency,compliance and a culture of continuous improvement and dialogue throughout the supply chain.Due to the complexity and the large number of suppliers,particularly in our battery supply chain,the Volkswagen Group has establis

106、hed a tiered assessment system with different types of audits to systematically review the sustainability performance of our suppliers.Second-party audits are used to verify,at regular intervals or on a case-by-case basis,that our suppliers are complying with our requirements.They are carried out by

107、 qualified audi-tors(internal or contracted consultants).The Volkswagen Group also carries out audits of selected direct suppliers as part of the Sustainability Rating(S-Rating)1.Other audits are performed ad hoc,for example in response to a grievance case,and focus on human rights risks and social

108、standards.The on-site audits can identify gaps in supplier performance,but also risks at indirect suppliers sites that need to be mitigated through the direct supplier.All audits of direct suppliers carried out on behalf of the Volkswagen Group are accompanied by a Corrective Action Plan(CAP),and th

109、e effectiveness of the implemented measures is verified by the auditor in re-audits(as part of a desktop review or a further on-site audit).1 Find more information on audits related to the Sustainability Rating in the 2023 Sustainability Report,page 129.Volkswagen Group Responsible Raw Materials Rep

110、ort 20231501Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitme

111、nt to Initiatives 05Outlook for 202406Annex Supply Chain Grievance Mechanism General Disclosures Main Tools of the RMDDMSInitially,the Volkswagen Groups battery audit program fo-cused on cobalt due to the severity of the human rights risks associated with this mineral.From there,we covered other bat

112、tery raw materials and have worked our way up the supply chain,moving from our battery suppliers to precursors,refin-ers,treatment units and mine sites.As human rights-related risks are often greatest at the beginning of the supply chain and can be most effectively addressed there,third-party audits

113、 and certifications are another part of our strategy.These independent audits are AuditsTin|Tantalum|Tungsten|GoldCobaltLeatherAluminumMicaAudit standardResponsible Minerals Assurance Process(RMAP)(Responsible Minerals Initiative)Customized standard developed by the Volkswagen Group with an external

114、 audit company.Draws on the OECD Minerals GuidanceStandard developed by the Leather Working Group(LWG)ASI Performance and ASI Chain of Custody(CoC)Standard developed by the Aluminium Stewardship Initiative(ASI)Global Workplace Standard for Mica ProcessorsScope of risks assessed in the auditAnnex II

115、risks as defined by the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk AreasAnnex II risks(see column to the left),as well as occupational health and safety,and child laborBusiness and operations management,environmental and social impact,o

116、ccupational health and safety,complianceASI Performance Standard:62 environmental,social and governance principles such as business integrity and transparency,water and biodiversity and human and labor rightsASI CoC standard:requirements for a CoC material,including supply chain due diligence and ma

117、terial accountingEnvironmental management system,occupational health and safety,fair labor practicesTier(s)that have been auditedSmelters and refinersFrom battery cell supplier to treatment unit levelTanneriesAll stages of the aluminum supply chainMica processorsconducted by certification bodies acc

118、ording to a standard set of requirements and verify that the suppliers meet all the requirements of the chosen standard.The Volkswagen Group also uses databases with audits conducted by global initiatives.One example is RMIs“list of RMI-conformant smelters.”Several global initiatives offer voluntary

119、 audit-based certifications for suppliers,among them IRMA,ASI and LWG.We also work directly with mine operators to certify mines through international associations.By employing a combination of these approaches,the Volkswagen Group can more effectively oversee its supply chains,ensuring that they li

120、ve up to rigorous environmental and human rights standards.This table provides an overview of how we use audits across various raw materials in our supply chains:Volkswagen Group Responsible Raw Materials Report 20231601Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Manage

121、ment System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosu

122、res Main Tools of the RMDDMS Supplier DialoguesTo help us establish and strengthen alignment around expec-tations with respect to our raw materials supply chains,we continue to engage directly with key suppliers.Sustainability training and workshopsOne key component is systematic training of supplie

123、rs as well as our own employees.Sustainability is an integral part of the skills profile for all procurement employees.Sustainability training delivered in web-based,online or face-to-face for-mats covers topics such as:(i)corporate responsibility;(ii)legal frameworks and requirements;(iii)our inter

124、nal process-es,such as the Volkswagen Groups sustainability rating and(iv)our management systems,such as the RMDDMS.Part of this training was dedicated to the topic of sustainability in raw materials.The training course on sustainability for procure-ment was held more than 3,700 times worldwide in 2

125、023.In order to support the continuous development of our suppliers,the Volkswagen Group Procurement Sustainabil-ity Management also offered sustainability training courses and workshops with our suppliers at selected locations or online.We also offered web-based on-demand training.7,791 suppliers r

126、eceived such training in 2023.We continued to offer our voluntary human rights training for suppliers,which has been available since 2020.In addition to the training,we created an e-learning module on sustainabili-ty which is available to current suppliers in eight languages.Collaboration with exter

127、nal partners and international initiativesThe Volkswagen Group also aims to address human rights risks in the upstream supply chain beyond its contractual re-lationships.To this end,we engage with various stakeholders as an exercise to increase our leverage while at the same time benefit from the le

128、arning and knowledge sharing.We take part in conferences and workshops and meet with NGOs,associations,local partners and media representa-tives.We see value in engaging with NGOs and community representatives,both on a national and international level.In 2023,our Working Group members met with near

129、ly 20 different stakeholders to exchange views on human rights,social and environmental issues.These meetings took place both virtually and in person,included follow-up meetings,and some evolved into recurring working groups.In 2023,we attended over 15 events of relevance to our responsible sourcing

130、 of raw materials and spoke at seven events,including conferences related to the automotive industry and its impact on human rights and the environment.During the OECD Forum on Responsible Mineral Supply Chains in April 2023,the Volkswagen Group took part in the DRIVE and the RMI Partner Session and

131、 spoke about the EUBR,challenges of implementation and opportunities for an industry-wide alignment.The Volkswagen Group and its brands are also active members in a number of global initiatives both cross-industry and raw material-specific.Together with our partners,we pursue the following objective

132、s:knowledge transfer,development of standardized risk assessment tools and the introduction of standards for responsible raw material supply chains with respect to human rights,the environment and compliance.We believe that these activities are helping us make progress on our path to transparent and

133、 sustainable supply chains and advance more responsible business practices worldwide.For a description of selected initiatives of which the VolkswagenGroup is a member,see the section on participation in international initiatives on pages 2021.Volkswagen Group Responsible Raw Materials Report 202317

134、Kapitelname Rohstoffbezeichnung01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Ra

135、w Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismVolkswagen Group Responsible Raw Materials Report 202317General Disclosures Supply Chain Grievance Mechanism Supply Chain Grievance Mechanism The supply chain grievance mechanism is used to process infor

136、mation on breaches of the Code of Conduct for Business Partners by the Volkswagen Groups direct or indirect suppliers.We believe that grievance mechanisms are important for managing human rights and environmental risks in our supplychains.Through this mechanism,we process concerns others have raised

137、 regarding negative human rights and environmental impacts.Hints can be placed anonymously.When a hint is brought to our attention,we investigate incidents relating to breaches or suspected violations by business partners of the Code of Conduct for Business Partners of the Volkswagen Group,including

138、 abuses of human rights and environmentalimpacts.More information about our grievance mechanism and KPIs for 2023 can be found in our 2023 Sustainability Report(pages123 and 128).Who can reportWhat is the outcomeHow can reports be madeIn personVia the Compliance contact personOmbudspersons (external

139、 lawyers)www.ombudsmen-of-Respective suppliers might be temporarily blocked from being awarded new contractsCan lead to termination of supplier relationship with the Volkswagen GroupRepresentatives of communities in the immediate vicinity of our production locationsCivil society organizationsAll sup

140、pliers staff membersBreaches identified and categorized by their severitySerious breachesOnline Reporting Channelwww.bkms- sustainability Mail Central Investigation Office,Mail Box 1717,38436 Wolfsburg/Germany24/7 hotline+49 5361 9 46300+800 444 46300Civil society organizationsVolkswagen Group Respo

141、nsible Raw Materials Report 20231801Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures0

142、4Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures LimitationsLimitations2023 marks the fourth year since introducing the RMDDMS at the Volkswagen Group.Over the course of the reporting period,we made improvements across the indivi

143、dual raw materials and undertook steps to strengthen the management system itself.While we are pleased with our progress,we also encountered obstacles along the way.Challenges of multi-tier global supply chainsIn the reporting year,we continued our efforts to work towards greater transparency in our

144、 supply chains.It is a particular challenge to identify upstream actors in our supply chains that impede the flow of sustainability and compliance information,as well as risk assessment and mitigation activities in the more remote tiers of the supply chain where the Volkswagen Group does not have a

145、direct contractual relationship with the suppli-er.For example,we found that,in some cases,suppliers were unwilling to disclose the identities of their suppliers because of antitrust and competitionconcerns.Limited responsible sourcing maturity among supplier groupsThrough our battery materials mapp

146、ing and auditing program we continued to conduct supplier audits against the five-step framework of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals.While many of our suppliers and sub-suppliers are open to adopting the OECD framework,some are reluctant to conduct external a

147、udits or are struggling to identify and mitigate risks in their supply chains.Midstream companies in particular are often unable to identifythe existing human rights and environmental risks associated with the mineral commodities they process and are not familiar with international standards.Lack of

148、 a level international playing fieldWhile due diligence expectations at the EU and European na-tional level have increased,legal requirements for businesses in many other geographies are not developing at the same speed.This creates a challenge for downstream companies which are unable to address ri

149、sks much further up their global and fragmented supply chains by themselves.This regulatory imbalance can only be addressed through close collaboration between businesses in various jurisdictions,as well as measures aimed at creating an international level playing field.Another example is that in so

150、me cases,national legislation is not in line with,or even contradicts,international best practice(for example,the stakeholder consultation process-es required at mine sites).Upstream companies then face the challenge that while they implement national legisla-tion,it may not be perceived as sufficie

151、nt by downstream industry actors who expect them to implement international best-practice requirements.Limits of corporate influence and the role of governmentsSome of the issues we face are beyond our sole control.As set out in the UN Guiding Principles on Business and Human Rights,states have a du

152、ty to protect human rights,while business enterprises have a responsibility to respect human rights.To create an enabling environment for responsible business conduct,governments play a key role in issues such as ensuring good governance(for example,combating bribery and corruption),enacting and enf

153、orcing relevant legal frameworks,and ensuring that human rights are not violated through the deployment of state security forces.However,we recognize the complexities for governments in ensuring human rights and environmental protection.One example of such complexities relevant to the downstream sec

154、tor is the protection and respect of human rights in regions with artisanal and small-scale mining(ASM).While ASM is associated with poor health and safety standards and child labor and may operate outside the formal economy with little or no regulation,it is an important source of income for a larg

155、e number of people in the countries concerned.It is therefore a balancing act to exclude poor working and environmental conditions from global supply chains,while at the same time not excluding the most vulnerable groups in society from improving theirlivelihoods.Evolving legislation and management

156、systemsDue diligence management systems require significant resource investment and learning for all businesses,includ-ing ours.This is particularly the case with systems trying to address risks across multiple tiers of long and complex supplychains.In the reporting period,we were able to increase t

157、he internal capacities working on the RMDDMS.This required internal capacity development and training.Due to the LkSG and other upcoming legislations,documentation and internal proce-dures became a higher priority in our work.In addition,supply chain compliance obligations continue to grow in comple

158、xity.Evolving laws and regulations in different jurisdictions add to the challenge and need to be communicated and implemented in our due diligence processes and tools,as well as rolled out to our supply chains.This is especially challenging when leg-islation is not harmonized,differs from internati

159、onal guidelines or uses undefined legal terms.We are constantly learning along the way and are achiev-ing milestones and measurable positive results for human rights and the environment through longer-term initiatives and engagement.Volkswagen Group Responsible Raw Materials Report 202319Schaubild01

160、Foreword02General Disclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook f

161、or 202406Annex Commitment to Initiatives 03 Volkswagen Group Responsible Raw Materials Report 20232001Foreword02General Disclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Min

162、erals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406AnnexCommitment to Initiatives DRIVE Sustainability|German sector dialogues on the implementation of the National Action Plan for Business and Human Rights(NAP)The Volkswagen Group is invol

163、ved in various initiatives with a focus on sustainability along the supply chain,some of which are cross-industry initiatives and relevant across a range of raw materials while others are raw material-specific.By participating in these initiatives,we are able to collaborate with other industry actor

164、s and increase our leverage across all tiers ofthe supply chain and within the broader industrysector.In 2023,we continued to be involved in several broader ini-tiatives and took part in several of their activities:DRIVE Sustainability The Volkswagen Group is a founding member of the industry-led in

165、itiative DRIVE Sustainability under the umbrella of CSR Europe.DRIVE Sustainability is a partnership of 16 leading automotive companies that are leading the transformation to a circular and sustainable automotive value chain by using a common voice in their engagement with suppliers,stakehold-ers an

166、d related sectors.As active members,we participate in the Raw Materials Working Group,through which we contributed to further developing the Raw Material Outlook.The platform is a keyini-tiative within DRIVE Sustainability and provides a tool for automotive companies to analyze critical raw material

167、s value chains by mapping stages and actors and identifying salient ESG risks along the supply chain.In 2023,we worked on updating the ten initial raw material profiles of the platform and added five newrisk profiles.Another tool developed by the working group is the Sustain-ability Assessment Quest

168、ionnaire(SAQ)which is also used by the Volkswagen Group as a basis for our Sustainability Rating(S-Rating)assessment.The common questionnaire standard for auditing sustainability aspects of suppliers is currently used by 13 of the member companies and intends to improve efficiency through a standard

169、ized approach.In SAQ version 5.0,revised in 2022,relevant topics were added to prepare for the German Supply Chain Due Diligence Act(LkSG).Drive+is the sustainable supply chain platform for automo-tive tier-1 suppliers and supplier associations.Members can engage in a systematic dialogue with Drive

170、Sustainability partners about common sustainability challenges and find joint solutions.In 2023,we took part in two workshops with Drive+members on ESG risks of Rare Earth Elements(REE)and Nickel value chains.Together with DRIVE Sustainability,we also participated in several external events in the r

171、eporting period 2023 EU-LATAM Convention on Raw Materials,2023 OECD Minerals Forum,the final RE-SOURCING conference and engaged with 50+stakeholders across NGOs,trade unions,industry associations and suppliers.Drive Sustainability and CSR Europe also work locally with a focus on setting up sustainab

172、ility networks to strengthen responsible sourcing and due diligence practices in the bat-tery value chain.The project“Extractives for Sustainability,”carried out with the support of the Deutsche Gesellschaft fr Internationale Zusammenarbeit(GIZ),addresses ESG issues related to the production of copp

173、er and cobalt in the DR Congo and manganese and iron ore in South Africa.The proj-ect,finalized in 2023,helped build local business networks among local mines for collaborative action and dialogue with the downstream part of their supply chains.In 2023,we con-tinued to participate in the project thr

174、ough online meetings and webinars.Other on-the-ground activities in the reporting period included engagement sessions on rare earth elements in Myanmar with NGO Global Witness and on aluminum with Human Rights Watch and Inclusive Development International.We also kicked off a project with global uni

175、on IndustriALL on human rights due diligence in the Indonesian battery supplychain.DRIVE Sustainability is an associate member of several material-specific initiatives to join forces for more sus-tainable material-specific supply chains,among them the Global Platform for Sustainable Natural Rubber(G

176、PSNR)and ResponsibleSteel.German sector dialogues on the implementation of the National Action Plan for Business and Human Rights(NAP)Since 2020,the Federal Ministry of Labour and Social Affairs(BMAS)has organized Sector Dialogues to help implement Germanys National Action Plan for Business and Huma

177、n Rights(NAP).These dialogues offer guidance to enterpris-es and support their efforts to implement the NAPs human rights due diligence requirements.One of the sectors is the automotive sector.The Sector Dialogue is a forum compris-ing representatives of the automotive industry and business associat

178、ions,trade unions,NGOs and several other initiatives.The members have developed a series of guidelines for inte-grating due diligence requirements into business processes,covering both the NAP requirements and the obligations set out in the German Supply Chain Due Diligence Act(LkSG).Fo-cus material

179、s are copper and lithium.In the reporting period,we actively participated in the Lithium Working Group,mainly through Porsches representation.Find more information on the Lithium Working Group in section 04 of this report.Volkswagen Group Responsible Raw Materials Report 20232101Foreword02General Di

180、sclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406AnnexCommit

181、ment to Initiatives Initiative for Responsible Mining Assurance(IRMA)|Responsible Minerals Initiative(RMI)Initiative for Responsible Mining Assurance(IRMA)The Volkswagen Group continues to be an active and com-mitted member of the Initiative for Responsible Mining Assurance(IRMA)and is also a member

182、 of the IRMA Buyers Group and the Mining Engagement Team.IRMA is a multi-stakeholder alliance that advocates for more socially and environmentally responsible mining.IRMA offers an independent assessment of mines against comprehensive standards.The IRMA stan-dards encompass the protection of human r

183、ights including the rights of local communities,the exclusion of corruption,health protection measures,occupational safety and environmental protection.In 2023,public consultation began on two draft updated standards:the Standard for Responsible Mining and Mineral Processing 2.0 and the Chain of Cus

184、tody Standard for Responsible Mined Minerals.The Volkswagen Group has committed to gradually applying the IRMA Standard for Responsible Mining in its battery sup-ply chains,ensuring that,in high-risk regions,sourcing battery raw materials is restricted to material originating from mines that are aud

185、ited against the IRMA Standard.The continued scaling of IRMA across the mining industry and raw material supply chains remains critical to unlocking the ability of the Volkswagen Group and other downstream brands to achieve their responsible sourcing goals.We fully support IRMAs efforts to engage wi

186、th mining-affected communities,civil society and trade unions on how the IRMA system can serve as a tool for meaningful engagement to improve mining practices worldwide.Responsible Minerals Initiative(RMI)The Responsible Minerals Initiative(RMI)of the Responsible Business Alliance(RBA)is a global mu

187、lti-stakeholder effort to promote responsible sourcing of minerals from conflict-affected and high-risk areas.RMIs Responsible Minerals Assurance Process(RMAP)en-ables companies and their suppliers to determine which smelt-ers and refiners have systems in place to responsibly source minerals in acco

188、rdance with current global standards.The evaluation is done through an independent third-party audit.Through the RMI,the Volkswagen Group joins forces with oth-er partners,either along the supply chain or from other indus-tries,to promote dialogue and build a common understanding of sustainability e

189、xpectations and harmonized upstream and downstream due diligence tools.We help drive industry-wide solutions and collaborative efforts to collectively leverage and standardize tools and adopt standardized data points for data exchange that enable downstream and upstream companies to map their supply

190、 chains while maintaining business confidentiality.In the reporting period,the Volkswagen Group used Material Insights as a risk radar tool to start the risk identification and due diligence process and continued to encourage suppliers to be assessed against RMI standards.We also played a key role i

191、n reviewing the RBA and RMIs Practical Guide to EU Battery Regulation and Battery Ma-terials Due Diligence and supporting documents,working with suppliers to ensure the accurate completion of the information.In addition,we participate in the RMIs Emerging Minerals Working Group,which brings together

192、 more than 40companies to map global value chains for sustainable transition,encourage suppliers to be assessed against a standard and use collective leverage where necessary to drive responsible business practices upstream.For more details on our participation in raw material-specific initiatives p

193、lease see the respective Raw Material Snapshots in section 04 of this report.A full list of our membership and participation in industry groups and initiatives can be found in Annex II at the end ofthis report.Volkswagen Group Responsible Raw Materials Report 20232201Foreword02General Disclosures03

194、Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406AnnexCommitment to Init

195、iatives 2023 Highlights DRIVE SustainabilityMicaPorsche joined the Responsible MicaInitiative pilot project to establish responsible supply chains in Madagascar on behalf of the Volkswagen Group and took part into a field trip toMica Mines inAnsy,Madagascar.See also Raw Material Snapshot on mica,pag

196、e 45Global Platform for Sustainable Natural Rubber(GPSNR)Capacity-building projects in Indonesia coached 380 smallholders on disease fighting and trained 7,000 smallholders on Good Agricultural Practices.Projects in Thailand educated 100 smallholders on agroforestry and 85 small-holders took part in

197、 training workshops on agro-forestry in Cote DIvoire and Indonesia.See also Raw Material Snapshot on natural rubber,page 51Aluminium Stewardship Initiative(ASI)Aluminum specification sheets with ASI requirements rolled out across the VolkswagenGroup.See also Raw Material Snapshot on aluminum,page 38

198、new risk profiles have been ad-ded to the Raw Material Outlook platformworkshops with Drive+members on ESG risks in REE and nickel value chains5 2Technical workshops by the”Responsible Lithium Partnership”on water-related challenges in Chile See also Raw Material Snapshot on lithium,page 24112021Lit

199、hiumPGMScania started supporting the Marikana Youth Centre,a multi-stakeholder project working to provide brighter futures for children in the platinum mining town of Marikana.See also Raw Material Snapshot on PGM,page 48The Leather Working Group(LWG)All of the Volkswagen Groups brands joined the Le

200、ather Working Group,following Bentley which became the first automotive member of the LWG in2023 HighlightsSee also Raw Material Snapshot on leather,page 43 Battery Raw Materials Conflict Minerals05Outlook for 202406Annex Other Raw Materials01Foreword02General Disclosure03Commitment to Initiatives 0

201、4 Raw Materials 04 Raw Materials Volkswagen Group Responsible Raw Materials Report 20232401Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials

202、 Lithium LithiumLithium is a soft and light,silvery-white alkali metal found in mineral and brine deposits.The metal is best known for its high energy storage density and its use in rechargeable batteries.Further industrial applications are metallurgy,glass and ceramics,lubricants and drugs.Environm

203、entalSocial&Human RightsCommunities Forced or compulsory labor Protection of the rights of indigenous peoples Pollution,water consumption Loss of biodiversity Destruction of forests and soilsKey material-specific risks24%31%48%6%Countries of origin(Share of global mining/processing)AustraliaArgentin

204、aChinaChile Top 3 mining countries Top 3 smelting and refining/processing countries Both 58%18%Source:USGS,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20232501Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials

205、Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials LithiumKEY APPLICATION EV batteries Lithium in our supply chainLithium hydroxide and lithium carbonate are the most import-ant lithium products,also for the Volkswagen Group.They are used as raw material for ca

206、thodes for battery manufacturing.Owing to the expansion of e-mobility,our demand for lithium as a key material for batteries is expected to grow in the coming years.In 2023,the Volkswagen Group did not directly source any battery raw materials,including lithium.Instead,we buy bat-tery cells from sup

207、pliers which are themselves up to several supply chain steps away from the raw material origin.We collaborated with our main battery suppliers,for which we use a mandatory EV battery raw materials specification sheet.The main lithium producing countries are Australia,Chile,China,Argentina and Brazil

208、.In the reporting period,PowerCo entered into purchasing agreements with suppliers of battery raw materials that will begin supplying PowerCo in 2025.PowerCo,founded in 2022,vertically integrates the develop-ment and production of battery cells within the Volkswagen Group and is expected to start ma

209、nufacturing in 2025.More information is available in the 2023 Sustainability Report(pages54-55).Risk Assessment The systemic and salient risk area identified for lithium is related to water.The water consumption for mining and processing,which is particularly relevant in high water stress areas,can

210、be related to adverse environmental impacts on soil and biodiversity as well as adverse impacts on neigh-boring communities.However,the water-related challenges are manifold and vary depending on the lithium deposit(hard rock or brine)and the extraction process and the technologies used.Another impo

211、rtant risk in the context of lithium extraction relates to the protection of indigenous peoples rights.Many lithium deposits are located on or near indigenous territories and operations affect indigenous livelihoods in different ways.Forced labor was added as a newly identified risk area in 2023 as

212、a result of a grievance case(see below).For all battery raw materials,we engage closely with our bat-tery suppliers in order to collect supply chain data and con-duct thorough risk assessments.During the reporting period,we continued to collect data through our lithium supply chain mapping questionn

213、aire,which we analyzed and assessed to identify any responsible sourcing risks.In addition,publicly available information such as news articles or ESG reports provided useful insights.In 2023,two lithium mine sites in Chile successfully under-went assessments according to IRMA standards and achieved

214、 IRMA50 and IRMA75 respectively.Both reports were thor-oughly reviewed to confirm our previous risk assessments.Risk MitigationOur strategy for risk mitigation in the lithium supply chain is multi-faceted.Through cross-industry initiatives such as the Initiative for Responsible Mining Assurance(IRMA

215、)and the activities of the Responsible Lithium Partnership in Chile,we continue to advocate for more responsible mining,positive impact in mining affected regions and an increased share of IRMA-certified material.Contractual requirements for transparency and due diligence set out in our battery raw

216、materials specification sheets are one key element of risk mitigation.The first requirement established in the specification sheet is providing trans-parency on the supply chain which allows us to conduct a comprehensive social and environmental risk analysis,con-duct mapping audits and define and i

217、mplement risk mitiga-tion measures,if necessary.We use the IRMA reports for our risk assessment,and the IRMA standard is a prerequisite for direct lithium procure-ment.In the reporting period,we continued to promote the IRMA standard among tier-n suppliers and conducted meetings with two lithium min

218、ing companies and two mid-stream companies to follow up regarding their progress with IRMA assessment.We also seek a contractual commitment to continuous improvement to increase the IRMA performance level over time.In preparation for the start of the battery production,the Volkswagen Groups procurem

219、ent team is supporting PowerCo in social and environmental risk assessments of potential direct suppliers of battery raw materials.These so-called“ESG pre-checks”are conducted during the initial dialogue with po-tential suppliers,with a particular focus on mine sites located in high-risk countries.I

220、n the reporting period,we conducted one pre-check for lithium.During contract negotiations,we also performed comprehensive on-site human rights due diligence facilitated by industry expert consultants.Stakeholder Engagement Collaboration with local stakeholders participating in the Responsible Lithi

221、um Partnership in Chile Participation in lithium working groups of the German Sector Dialogue and the RMI Continued dialogue with direct and indirect suppliersVolkswagen Group Responsible Raw Materials Report 20232601Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook f

222、or 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Lithium Initiatives and dialogueThe Volkswagen Group is a founding member of the Respon-sible Lithium Partnership in Chile which is coordinated by the German Agency for Inte

223、rnational Cooperation(GIZ).The partnership focuses on the responsible use of resources and sustainable lithium production in Chiles Salar de Atacama region through local multi-stakeholder partnerships.The plat-form seeks to promote collaboration among stakeholders in the Salar de Atacama watershed t

224、o improve long-term natural resource management.In 2023,we contributed to several activities,among them a hydrological study which also covered the potential impacts on biodiversity.We also continued to support the“Respon-sible Lithium Partnership,”a multi-stakeholder partnership(seehighlight boxon

225、page 27).In 2023,we continued to participate in the Lithium Working Group of the German Automotive Sector Dialogue,mainly through our representative from Porsche.The working group has developed recommendations for the lithium industry on how to effectively manage the lithium supply chain risks.These

226、 were finalized in alignment with national experts and local organizations and mining companies and published in July 2023.The project also aims to support the cascading of sus-tainability requirements in the supply chain.Through the German Automotive Sector Dialogue,we are also engaged with the Int

227、ernational Lithium Association in a dialogue with mining companies(hard rock and brine).The Volkswagen Group also participates in the RMI Work-ing Group on Lithium to foster the uptake of due diligence activities and responsible sourcing across the supply chain.In the reporting period,as a result of

228、 collective supply chain mapping and industry engagement efforts,41 lithium facilities were mapped,one facility was successfully assessed against the RMAP standard and three facilities are preparing for assessment in 2024.Research and direct stakeholder engagementIn the reporting period,the Volkswag

229、en Group funded re-search on social risks associated with lithium in the so-called“lithium triangle”in South America(Argentina,Bolivia,Chile);a potential second phase of the project with academia in Australia and Chile is currently being discussed.We also continued to engage with NGOs in order to de

230、epen our understanding of the situation of local stakeholders in Chile.During the German-Chilean Raw Materials Forum 2023,we met representatives of the Atacamea Women Alliance to learn about their actions to strengthen the role of the Lickanantay women in the Salar de Atacama and understand their pr

231、iorities while facing increasing lithium extraction in Northern Chile.Grievance case on forced laborForced labor was identified as a new salient risk area for lithium in 2023.A grievance case was opened to address the alleged relationship to the allegations through one of the Volkswagen Groups suppl

232、iers.As a consequence,we commissioned a series of audits in the lithium supply chain.Following the audits,the grievance case was closed since the auditors did not confirm the alleged supply chain connections.For more information,see the Volkswagen Group website on ESG controversies.Outlook 2024We pl

233、an to:Further promote the IRMA standard for responsible lithium mining and gather feedback from stakeholders around IRMA-certified lithium mines Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR Continue supporting local stakeholders in Chile through the Re

234、sponsible Lithium Partnership Continue expanding our lithium supply chain mapping in close collaboration with our major batterysuppliers Engage in dialogue with relevant internal and external stake holders on newly identified risks in the lithium supply chain and emerging lithium producing countries

235、 For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Volkswagen Group Responsible Raw Materials Report 20232701Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict

236、Minerals Other Raw MaterialsBattery Raw Materials Lithium HIGHLIGHTThe Responsible Lithium Partnership on the ground in ChileIn the reporting period,we continued to support the Responsible Lithium Partnership,a multi-stakeholder partnership in Chile,facilitated by GIZ in the context of the Responsib

237、le LithiumPartnership.Participation is very broad and the format is unique in the region since it brings together representatives from local tourism and agriculture associations,lithium mining companies,indigenous communities and local authority representatives.Several activities have been implement

238、ed by the roundtable on two major focus areas:Technical data:A project to source technical data on lithium production as well as water use and demand in the region,in order to reduce potential scientific uncertainties.Furthermore,11 technical workshops on water-related challenges and potential solut

239、ions were held throughout 2023.Water resources:One of the first focus areas of the roundtable,resulting in a series of measures,including a cadastre of water rights on the river basin;geological and hydrological mapping of the Vilama River;awareness campaigns and capacity-building program;providing

240、access to data and resources through website and social media;irrigation pilot;monitoring of streams;grey water use;plan for sustainable tourism;support to stakeholders for public funding for water-related projects;and investment in upgrading a freshwater plant.The Responsible Lithium Partnership en

241、ables dialogue between organizations,indigenous com-munities and institutions that carry out productive,social and/or cultural activities in the Salar de Atacama basin.The members seek to collabora-tively resolve information gaps on the basin and reach agreement on priority issues related to the sus

242、tainability of the region,mainly focused on water-related issues.11on water-related challenges in 2023.technical workshopsVolkswagen Group Responsible Raw Materials Report 20232801Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials

243、Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Cobalt CobaltCobalt is a hard,lustrous,silvery metal,found in rocks only in a chemically combined form.The vast majority of cobalt is extracted as a by-product of existing nickel and copper mining.Cobalt is pri

244、marily used in lithium-ion batteries and in the manufacture of magnetic high-strength alloys.Social&Human RightsCommunities Forced or compulsory labor Child labor Discrimination Health and safety Trade union freedoms Payment of adequate wages Causing harmful change Protection of the rights of indige

245、nous people Production and use of pollutants Pollution,water consumption Handling and disposal of waste Loss of biodiversity Destruction of forests and soilsKey material-specific risks74%DR CongoRussia4%7%Indonesia8%Finland4%CanadaChina72%Countries of origin(Share of global mining/processing)Top 3 m

246、ining countries Top 3 smelting and refining/processing countriesSource:USGS,Cobalt Institute,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20232901Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt

247、 Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials CobaltKEY APPLICATION EV batteries Cobalt in our supply chainCobalt hydroxide,cobalt sulphate and cobalt metal are the main inputs for EV battery cell production.Cobalt plays an essential role in batteries,improving vehicle

248、range and safety by providing thermal stability in cathode chemistry.In 2023,the Volkswagen Group did not directly source any battery raw materials,including cobalt.Instead,the Volkswagen Group buys its battery cells from suppliers which are themselves up to nine supply chain steps away from the raw

249、 material origin.Our main sourcing countries for cobalt are DRCongo,Turkey,Indonesia and New Caledonia(France).In the reporting period,PowerCo entered into purchasing agree-ments with suppliers of battery raw materials that will begin supplying PowerCo in 2025.PowerCo,founded in 2022,vertically inte

250、grates the develop-ment and production of battery cells within the Volkswagen Group and is expected to start manufacturing in 2025.More information is available in the 2023 Sustainability Report(pages54-55).Risk Assessment The Volkswagen Group has identified human rights and ad-verse environmental i

251、mpacts as the systemic and salient risks for cobalt.This is due to the majority of the worlds cobalt being mined in the southern area of the DR Congo.While mining is a primary source of income for the region,cobalt is partially mined in labor-intensive artisanal and small-scale mining(ASM)with low w

252、ages,poor working conditions and little to no safety.The lack of law enforcement is also related to adverse environmental impact on the neighboring communities.Supply chain traceability is low due to the many actorsinvolved.In 2023,the Volkswagen Group continued to engage with battery cell producers

253、 and collected data through our cobalt supply chain mapping questionnaire,which we analyzed and assessed to identify any responsible sourcing risks.Working closely with our battery suppliers through our cobalt supply chain mapping and audit program,we have identified and prioritized certain supplier

254、s.Risk MitigationWhile cobalt supply chains are complex,we continued to focus on working with our battery suppliers on securing sus-tainability in the supply chain.The Volkswagen Group strictly avoids sourcing cobalt from artisanal mining operations,a strategic decision aimed at mitigating the inher

255、ent risks associated with such activities in the DR Congo.Through our battery raw materials specification sheets,we request our suppliers to adhere to internationally recognized responsible sourcing practices such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conf

256、lict-Af-fected and High-Risk Areas.We seek contractual commitment to international standards such as those developed by IRMA or RMI(RMAP).By incor-porating the IRMA standard into its supplier requirements,the Volkswagen Group/PowerCo reaffirms its commitment to responsible sourcing practices and und

257、erscores the impor-tance of maintaining ethical standards in the cobalt supply chain.Following a suppliers commitment,we continuously monitor the suppliers progress towards its IRMA certification.While it remains the responsibility of the supplier to achieve IRMA certification,we remain closely invo

258、lved.As part of this ongoing supplier engagement,one priority topic has been the safe management of hazardous substances,including miningtailings.However,compared to lithium,the cobalt supply chain contains additional challenges regarding standards:Cobalt is often mined as a by-product of large-scal

259、e copper(mainly in DR Congo)or nickel mines(e.g.Indonesia).The respective copper-cobalt mining companies are new to the IRMA stan-dard and sometimes favor alternative standards.In the reporting period,the Volkswagen Group also remained on the advisory board of a responsible mining standard,known as

260、CERA 4in1 Performance standard,which was piloted in 2021.The CERA 4in1 pilot project was completed in2023 but is now on hold due to the roll out of IRMA.Stakeholder Engagement Ongoing engagement with on-the-ground projects such as Cobalt for Development(C4D)Dialogue with direct suppliers of cobalt t

261、hrough PowerCo Participation in RMI Working Groups on cobalt and emerging minerals OECD Forum on Responsible Mineral Supply ChainsVolkswagen Group Responsible Raw Materials Report 20233001Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Ma

262、terials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Cobalt In preparation for the start of the battery production,the Volkswagen Groups procurement team is supporting PowerCo in social and environmental risk assessments of potential direct suppliers of b

263、attery raw materials,including cobalt.These so-called“ESG pre-checks”are conducted during the initial dialogue with potential suppliers to assess the situation on the ground.In the reporting period,we con-ducted one pre-check for cobalt.In high-risk contexts,the checks are complemented by on-site du

264、e diligence facilitated by industry expert consultants,to ensure that suppliers comply with recognized standards on a range of human rights and environmental topics.We also leverage media screening and supply chain moni-toring solutions to actively monitor media hints of any issues occurring at our

265、cobalt suppliers.For any issues,we seek responses and remediation plans when relevant,which are then monitored by the company.Initiatives and dialogueIn 2023,we continued to engage with Cobalt for Development(C4D),a cross-industry initiative implemented by GIZ that works to support communities depen

266、dent on artisanal cobalt mining in the DR Congos Lualaba Province.In C4D,we work together with partners for improved working and living condi-tions for small-scale cobalt miners and their communities.The pilot project aims to strengthen compliance with laws and improve health and safety conditions a

267、nd social well-being for people locally.Outlook 2024We plan to:Further promote the IRMA standard for responsible cobalt mining Continue expanding our cobalt supply chain mapping in close collaboration with our major batterysuppliers,implementing new digital tools to improve the management of the col

268、lected supply chain information Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Volkswagen Group Responsible Raw Materials Report 20233101Foreword02General Disclosure04 Raw M

269、aterials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Nickel NickelNickel is a metallic element with a silvery appearance which occurs naturally in soil and water.Primary nickel is

270、 produced and used as ferro-nickel,nickel oxides and other chemicals.Stainless steel is by far the most important use of nickel,but it is also used in other alloys,plating and batteries.EnvironmentalSocial&Human RightsCommunities Forced or compulsory labor Child labor Direct or indirect sup-porttoar

271、med groups Discrimination Health and safety Payment of adequate wages Trade union freedoms Causing harmful change Forced evictions and/or expropriations Protection of rights of indigenous people Production and use of pollutants Pollution,water consumption Handling and disposal of waste Destruction o

272、f forests and soilsKey material-specific risks6%11%Countries of originNew CaledoniaPhilippinesIndonesia33%50%Japan7%RussiaChina6%25%Countries of origin(Share of global mining/processing)Top 3 mining countries Top 3 smelting and refining/processing countries Both Source:USGS,EU RMIS,2023 estimates.Vo

273、lkswagen Group Responsible Raw Materials Report 20233201Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials NickelKEY APPLICATION EV batteries

274、 Nickel in our supply chainNickel sulfate provides a source of nickel ions for the cathode material of lithium-ion batteries,such as Nickel-Cobalt-Aluminum(NCA)and Nickel-Cobalt-Manganese(NCM)batteries,contributing to the batterys overall performance,energy density and stability.In EV batteries,nick

275、el-rich cathodes improve energy density and stability while reducing costs.Thus,nickel is a strategically important raw material in the electrification of transportation,in addition to its other uses in stainless steel,alloys and plating.For the Volkswagen Group,EV batteries are by far the largest f

276、ield where nickel is required,and we did not directly source any nickel for this use in 2023.Our main sourcing countries for nickel are Australia,China,Papua New Guinea,Indonesia and New Caledonia(France).In the reporting period,PowerCo entered purchasing agreements with suppliers of battery raw mat

277、erials that will begin supplying PowerCo in2025.PowerCo,founded in 2022,vertically integrates the develop-ment and production of battery cells within the Volkswagen Group and is expected to start manufacturing in 2025.More information is available in the 2023 Sustainability Report(pages 54-55).Risk

278、Assessment The most serious risk areas associated with nickel are environmental impacts of open pit mining such as destruc-tion of forests and soils,water pollution and waste handling,particularly in seismically active areas such as Indonesia.Additionally,nickel production is a greenhouse-gas and en

279、ergy-intensive process.For locations of a number of nickel mines as well as smelting and refining companies,human rights risks have been identified,including working condi-tions,health and safety,and forced labor.Risk MitigationContractual requirements for transparency and due diligence set out in o

280、ur battery specification sheets are one key ele-ment of risk mitigation.Furthermore,the VolkswagenGroup has undertaken a broad sectoral analysis of the nickel supply chain and is continuing its supply chain mapping and auditing program.The Volkswagen Group joined IRMA in 2022 and has since rolled ou

281、t the IRMA standard across the battery supply chains through contractual obligations.However,regarding standards,the nickel supply chain con-tains additional challenges compared to lithium,as nickel mining companies are new to the IRMA standard and some-times favor alternative standards.In preparati

282、on for the start of the battery production,the Volkswagen Groups procurement team is supporting PowerCo in social and environmental risk assessments of potential di-rect suppliers of battery raw materials.These so-called“ESG pre-checks”are conducted during the initial dialogue with po-tential suppli

283、ers,with a particular focus on mine sites located in high-risk countries.In the reporting period,we conducted six pre-checks for nickel.In high-risk contexts,during contract negotiations,we also perform comprehensive on-site human rights and environmen-tal due diligence facilitated by industry exper

284、t consultants.Stakeholder Engagement Participation in the nickel working group of RMI Ongoing dialogue with industry peers and direct and indirect suppliers Dialogue with affected stakeholders and NGOs Dialogue with direct suppliers of nickel through PowerCo Outlook 2024We plan to:Continue expanding

285、 our nickel supply chain mapping and audit program in close collaboration withour major battery suppliers Progressively apply the IRMA standard for responsible nickel mining and promote IRMA audits in the nickel supply chain Plan and engage in an on-the-ground partnership project in Indonesia to mit

286、igate environmental and social risks and raise industry standards on sustainable manage-ment of nickel mining and refining Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Vol

287、kswagen Group Responsible Raw Materials Report 20233301Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Graphite GraphiteGraphite is a soft

288、,crystalline form of carbon with a metallic luster and a dark grey color.With its thermal and electrical conductivity,it is suitable for many industrial applications.Synthetic and natural graphite are used on a large scale in pencils,lubricants and electrodes.EnvironmentalSocial&Human RightsCommunit

289、ies Forced or compulsory labor Child labor Direct or indirect sup-porttoarmed groups Discrimination Health and safety Payment of adequate wages Trade union freedoms Causing harmful change Forced evictions and/or expropriations Protection of rights of indigenous people Production and use of pollutant

290、s Pollution,water consumption Handling and disposal of waste Destruction of forests and soilsKey material-specific risks6%6%MadagascarMozambiqueChina77%Countries of origin(Share of global mining)Top 3 mining countries Source:USGS,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20233

291、401Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials GraphiteKEY APPLICATION EV batteries Graphite in our supply chainNatural graphite is co

292、ntained in a vast number of vehicle parts,most importantly in the anodes of EV batteries,but also in brake discs and precision parts,graphite powders,etc.EVbatteries are by far the largest field where graphite is required,and the Volkswagen Group did not source any graphitefor this use in 2023.With

293、more electric vehicles being produced,we expect the demand for graphite to keep rising.China is the worlds lead-ing supplier of natural graphite.Given its strategic importance for the energy transition and its high supply risk,natural graphite is listed by the EU as a critical raw material.Risk Asse

294、ssment The Volkswagen Group has identified human rights and ad-verse environmental impacts as the main systemic and salient risks,particularly occupational health and safety,air pollution and negative impacts to local communities.Risk MitigationWe take a multi-layered approach to risk mitigation,foc

295、using on our six battery suppliers as well as the future direct suppli-ers of natural graphite to PowerCo.Contractual requirements for transparency and due diligence set out in our battery specification sheets are one key element of riskmitigation.In the reporting period,the Volkswagen Group has und

296、ertaken a broad sectoral analysis of the graphite supply chain and has continued its supply chain mapping and auditing program.The Volkswagen Group joined IRMA in 2022 and is com-mitted to rolling out the IRMA standard across the battery supply chains through contractual obligations.This applies to

297、both our current battery suppliers and the new suppliers for PowerCo.Outlook 2024We plan to:Continue expanding our graphite supply chain mapping and audit program with our battery suppliers Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR For more informat

298、ion on the EU Battery Regulation(EUBR)see page 13 of thisreport.Stakeholder Engagement Ongoing engagement in industry initiatives Dialogue with direct suppliers of graphite through PowerCo05Outlook for 202406Annex Battery Raw Materials 3TG Other Raw Materials Conflict Minerals01Foreword02General Dis

299、closure03Commitment to Initiatives 04 Raw Materials Conflict Minerals 3TG35 3TGTin,tantalum,tungsten and gold(3TG)are referred to as“conflict minerals”due to their role in violent conflicts in the Democratic Republic of the Congo(DRC)and neighboring countries,where their extraction and trade are use

300、d to fund armed groups while fueling human rights abuses,corruption and money laundering.3TG metals are used in a wide range of everyday electronic products.Child labor Direct or indirect sup-port to armed groups Discrimination Forced or compulsory labor Forced evictions and/or expropriations Protec

301、tion of the rights of indigenous peoples Production and use of pollutants Air pollution Safety of installations Handling and disposal of waste Pollution,water consumption TIN,TANTALUM,TUNGSTEN AND GOLDSocial&Human RightsCommunitiesEnvironmentalKey material-specific risks Destruction of forests and s

302、oils Loss of biodiversity Noise and vibrations Health and safety Payment of ade-quate wages Because 3TG are four different raw materials with a large total number of countries of origin,we decided against visualizing them on a world map.Instead,the 3TG smelters and the countries and territories of o

303、rigin we identified are listed in Annexes III and IV ofthisreport.Volkswagen Group Responsible Raw Materials Report 20233605Outlook for 202406Annex Battery Raw Materials 3TG Other Raw Materials Conflict Minerals01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsConflict Minera

304、ls 3TGKEY APPLICATIONS Various automotive parts Electronics 3TG in our supply chain 3TG metals(tin,tantalum,tungsten and gold,collectively called 3TG or also conflict minerals)are used in tiny quantities in a wide array of automotive parts and components.This lack of focal parts to concentrate on cr

305、eates a key challenge for 3TG due diligence in automotive supply chains.Tracing the upstream supply chains becomes even more challenging considering that the raw materials are typically added to our supply chains several levels upstream where we have no direct contractual relations.The Volkswagen Gr

306、oup does not directly purchase 3TG metals.However,we request our suppliers to ensure that only responsibly sourced conflict minerals are part of their supply chains.As stated in our contractually binding Code of Con-duct for Business Partners(CoC BP),business partners may only use 3TG from smelters

307、or refiners that meet the require-ments of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas,as assessed by the Responsible Minerals Initiative(RMI)or similar organizations.These assessments are carried out according to the RMIs Resp

308、onsible Minerals Assurance Process(RMAP).We expect our suppliers to avoid all minerals from conflict affected smelters.Nevertheless,in line with OECD Guidance,the aim is not to ban the procurement of conflict minerals that originate in conflict-affected and high-risk areas,but to pro-mote sourcing f

309、rom responsible sources within those regions.Risk Assessment As part of the annual general risk assessment,the Volkswagen Group identified human rights risks including child labor and support to non-state armed groups and/or public or private security forces as outstanding systemic social risks.Sali

310、ent environmental risks are pollutants and hazardous chemicals.However,almost all risk categories according to our RMDDMS apply to these conflict minerals.As with most other minerals,the highest risks occur at the mining level.For 3TG due diligence,the“choke-point approach”in alignment with the OECD

311、 Minerals Guidance is best practice.The approach aims to first identify smelters and refiners(choke points)and then ensure that those smelters and refiners source responsibly.In 2023,we continued working towards transparency along our 3TG supply chain by collecting relevant supplier data.We used the

312、 RMIs Conflict Minerals Reporting Template(CMRT).The CMRT is a standardized reporting template that facilitates the transfer of information through the supply chain regard-ing mineral country of origin and the smelters and refiners used.The template also supports identifying which smelters and refin

313、ers should undergo an audit according to RMIs RMAPstandard.In addition,we continued partnering with Assent,a supply chain management solution which includes a third-party database,to manage and improve the quality of the transpar-ency data we receive from suppliers delivering nearly 200,000 differen

314、t parts.The response rate increased to above 70%,a significant improvement compared to last years campaign.We expanded our supplier outreach in line with our ongoing due diligence process.Through collective industry out-reach,including our partner Assent and using the CMRT,we identified and engaged

315、with a greater number of relevant tier-1 suppliers compared with previous years around 4,000 suppliers delivering nearly 200,000 different parts.The response rate increased to above 70%,a significant improve-ment compared to last years campaign.We have determined country of origin data for the major

316、ity ofthe smelters in our supply chain.Lists identifying our smelt-ers and countries of origin can be found in Annexes III and IV of this report.Stakeholder Engagement Member of RMIs smelter engagement and gold team Ongoing dialogue with NGOs Enhanced due-diligence outreach to tier-1 suppliers Encou

317、raging smelters to undergo RMAP auditsVolkswagen Group Responsible Raw Materials Report 20233705Outlook for 202406Annex Battery Raw Materials 3TG Other Raw Materials Conflict Minerals01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsConflict Minerals 3TG Outlook 2024We plan t

318、o:Continue to work on increasing transparency along our 3TG supply chain by collecting data and en-gaging with our most critical tier-1 suppliers(based on the smelter risk profile and/or the quantity of 3TG materials used in their products)Increase the percentage of RMAP-conformant 3TG smelters inou

319、r supply chain Risk Mitigation Besides our work on increasing transparency in our 3TG supply chains,we are focusing on increasing the number of RMAP-compliant smelters through our participation in theRMI.In the reporting period,the Volkswagen Group continued to participate in the smelter engagement

320、team and the gold team of the Responsible Minerals Initiative(RMI).Together with other RMI members,we worked with a number of our smelters to encourage them to undergo the RMIs Responsible Minerals Assurance Process(RMAP).Smelters and refiners who face challenges meeting requirements of the RMAP sta

321、ndard can participate in the Extended Corrective Action Plan(CAP)Process of the RMI.This process helps smelters and refiners pursue risk mitigation and continuous improvement.Together with our partner Assent,we launched an enhanced due diligence program for 3TG in 2023 to ensure that the requirement

322、 from our CoC BP is enforced.To determine if the suppliers comply with our requirements,we assess whether the smelters are RMAP-conformant and also check for any negative media coverage of the smelter.Through this addi-tional outreach activity 1,500 direct suppliers were requested to ensure that onl

323、y RMAP-conformant smelters contribute to their supply chains.Of the smelters identified in our supply chain,nearly 63%were RMAP-conformant as of the end of 2023.The slight decrease in RMAP conformance compared to the previous reporting year is due to a reduced number of globally available confor-man

324、t smelters.We continue to look for red flags in accordance with the OECD Guidance that may help identify suppliers from conflict-affected and high-risk areas prone to issues of human rightsviolations.Raw Materials Rohstoffbezeichnung05Outlook for 202406Annex Battery Raw Materials Other Raw Materials

325、 Conflict Minerals Aluminum PGM Copper Natural Rubber Leather REE Magnesium Mica Steel Cotton01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsOther Raw Materials Aluminum Volkswagen Group Responsible Raw Materials Report 2023387%BrazilCountries of origin(Share of global mini

326、ng/processing)Top 3 mining countries Top 3 smelting and refining/processing countries Both Source:USGS,2023 estimates.Aluminum Aluminum is extremely versatile and is therefore used in a variety of applications,often replacing steel due to its light weight.It is strong,nonmagnetic,and conducts heat a

327、nd electricity.Aluminum is an abundant element in the earths crust but does not occur in its pure form.It has to be extract-ed from bauxite in a resource-intensive process.EnvironmentalSocial&Human RightsCommunities Forced or compulsory labor Protection of the rights of indigenous peoples Production

328、 and use of pollutants Air pollution Handling and disposal of waste Key material-specific risks Pollution,water consumption Loss of biodiversity Destruction of forests and soils ChinaAustralia59%14%23%25%24%GuineaVolkswagen Group Responsible Raw Materials Report 20233905Outlook for 202406Annex Batte

329、ry Raw Materials Other Raw Materials Conflict Minerals Aluminum PGM Copper Natural Rubber Leather REE Magnesium Mica Steel Cotton01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsOther Raw Materials AluminumKEY APPLICATIONS Body sheets Die casting&extrusion parts Aluminum in

330、our supply chain Aluminum is used in several key parts of our brands vehicles from engines,chassis,frames and body sheets to wheels.Aluminum is also used in battery compartments,cooling plates and many other smaller components.The most im-portant advantage of aluminum for the automotive industry is

331、its excellent strength-to-weight ratio which helps reduce the weight of vehicles and therefore their energy efficiency/battery range.Thus,the demand for aluminum is expected to further increase in the coming years with the continuing trend towards lightweight construction and electrification of vehi

332、cles.The Volkswagen Group sources aluminum alloys both directly and mainly indirectly.As only a few aluminum producers are vertically integrated,i.e.operate their own mines,refineries and aluminum smelters,it is difficult to mitigate the risks in deeper supply chain levels.Risk Assessment The increa

333、sing importance of aluminum makes it essential to assess and tackle the risks associated with its upstream supply chain.For aluminum,we have identified three systemic and salient risk areas associated with high risk:the adverse environmental impacts of mining,refining and smelting,adverse impacts on local and indigenous communities,and the occurrence of forced labor in smelting in a certain region