ESG in mining: Is the Battery Passport a sign of things to come?
What could mining’s relationship with ESG look like in a more environmentally conscious future? The Battery Passport gives us a clue.
What is the Battery Passport?
The Battery Passport would create a system whereby batteries and the elements within them could be traced from the source, including the mine, right through the supply chain, through use, right through to recycling.
In making its announcement, GBA said: “Batteries are the key to unlocking the energy transition. At the same time, batteries are material- and resource-intensive, with inevitable social and environmental impacts throughout the value chain. This includes greenhouse gas emissions during material sourcing, processing and manufacturing of batteries and issues of child labour and human rights violations.
“Bringing transparency to battery value chains through the introduction of the Battery Passport is a critical step towards establishing sustainable battery value chains in a rapidly growing industry.”
The Battery Passport is a “digital twin” (a written record, if you will) of a physical battery that contains information about all the applicable sustainability and life cycle requirements. GBA claims it will bring new levels of transparency to the global battery value chain by “collecting, exchanging, collating and reporting trusted data among all life cycle stakeholders on the material provenance, the battery’s chemical make-up and manufacturing history and its sustainability performance”.
“Its ultimate goal is to provide end users with a quality seal based on the battery’s sustainability performance, according to reporting rules agreed by stakeholders from industry, academia, non-governmental organisations and government.”
Why is the Battery Passport a sign of things to come for mining?
Miners, including Glencore, have signed up to the Battery Passport, as are battery manufacturers like Tesla, governments, and other industry players.
Indeed, Glencore took part in the Battery Passport pilot scheme (alongside LG Energy Solutions and Tesla), which fully mapped and traced the entire cobalt supply chain (with 100% of the cobalt coming from Glencore’s Kamoto Copper Company in the Democratic Republic of Congo) to LG Energy Solutions and the electric vehicles factory in China. The ReSource solution traced all of the cobalt used in the battery, issued the Battery Passport, aggregated and processed supply chain data, and calculated ESG metrics.
At the moment, it seems reasonably clear that batteries are going to play a vital role in the decarbonisation of our economies. For the mining industry, this means a future finding and exploiting rare-earth minerals like lithium, cobalt and copper, which are vital components of batteries.
But it’s not just an opportunity to create new mines and more jobs and make money. Analysts at BDO say we’re entering an era in mining where a mining’s “social licence to operate” (the public’s acceptance of a company’s or industry’s right to go about its business) will be questioned more often.
Stakeholders from employees to investors are demanding stronger engagement and more transparency. The Battery Passport is designed to provide that information and reassurance.
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