🌱 Why is auditing important?
The production of renewable energy technologies and batteries brings an array of environmental and human rights risks with it. For example, “some of the mining operations for raw materials like cobalt [used in batteries] are notorious for human rights violations, including child labor”. Notably, the Business & Human Rights Resource Centre and Amnesty International USA say that “leading venture capital (VC) firms are failing in their responsibility to respect human rights”. Their research shows that many “[l]eading VC firms have not implemented basic human rights due diligence processes to ensure the companies and technologies they fund are rights-respecting, as mandated by the UN Guiding Principles on Business and Human Rights”.
🌱 Are audits effective?
Social compliance audits are an $80 billion global industry. Over the past two decades, audits have been used as evidence by companies “that they have eliminated abuses in their supply chains”. Yet, an analysis of 40 000 audits by the Cornell professor, Sarosh Kuruvilla, in 2021 “found that nearly half had relied on forged or dubious documents”. Moreover, a recent New York Times (NYT) “review of confidential audits conducted by several large firms shows that they have consistently missed child labor”. According to the NYT, “[c]hildren were overlooked by auditors who were moving quickly, leaving early or simply not sent to the part of the supply chain where minors were working”. A key problem is that “[a]uditors typically start their inspections in the morning and stay for about seven hours, even at 3,000-person factories that operate around the clock”. Consequently, the “late afternoon and night shifts, where child labor violations most often occur, are almost never seen”.
🌱 What is a battery passport?
A battery passport is “a digital record that documents where each part of a battery came from and evaluates its environmental and social impact”. By 2027, batteries for electric vehicles and many other industrial uses that are sold in the EU must have “a QR code linking to details on its makeup, origin, and carbon footprint”. Unsurprisingly, “evaluating the environmental and social costs of this supply chain requires extensive information about every step in its production [such as if] the mines exploited child labor, or how much fossil fuel was used to ship each part around the world”. In the future, the passports are likely to also include information on Indigenous Peoples’ rights and biodiversity. If the battery passports are successful, similar requirements on “supply chain transparency and accountability could catch on elsewhere”. In line with this, the US Department of Labor has already set out a list of products, including electronics, which it suspects to be produced using forced and child labor.
Read more about human rights auditing here:
- https://qz.com/battery-passport-sustainable-climate-tech-1851095928
- https://www.nytimes.com/2023/12/28/us/migrant-child-labor-audits.html