China Energy Storage Network News: According to foreign media reports, the Energy Storage Association (ESA) of the United States has recently released a sustainable energy storage supply chain policy guide for building energy storage supply chain policies that comply with ESG (Environmental, Social, and Governance).

Lithium ion batteries are mainly deployed in electric vehicles and fixed grid connected battery energy storage systems, but have been reviewed due to potential ESG risks related to labor conditions and environmental impacts in their supply chain.

The American Energy Storage Association cited a study by the Electric Power Research Institute (EPRI) that defined three main issues faced in the lithium-ion battery supply chain:

Overall, 50% of global cobalt supply comes from Congo. 15% to 30% of cobalt comes from small mines with poor working conditions and threats to personal safety.

The mining and processing of lithium mines have a significant impact on the environment.

The guidelines released by the American Energy Storage Association focus on establishing supply chain policy goals, developing evaluation methods, evaluating policy options, compiling and implementing supply chain policies, and measuring and communicating progress towards these goals.

Establish supply chain policy objectives

The American Energy Storage Association states that energy storage system integrators or developers who do not comply with ESG policies need to cover a range of ESG themes in order to establish their supply chain policy objectives. Energy storage companies that have established some ESG policies can establish supply chain goals by applying their existing ESG policies to their suppliers.

This guide points out that energy storage companies with more targeted ESG goals can extend their goals to the supply chain to maintain consistency, and these companies can also extend their ESG obligations to their suppliers.

Develop evaluation methods

After setting ESG goals, energy storage manufacturers must develop methods to evaluate progress towards achieving these goals. The scope and rigor of supply chain analysis depend on the nature of the target and the position of energy storage companies in the value chain.

Directly observing and evaluating the supply chain of energy storage manufacturers can provide important information, but may require more resources to effectively complete.

On the other hand, relying on the reports of intermediate suppliers by energy storage companies can reduce the resource burden of evaluating target progress, but it will limit their visibility into the supply chain. However, energy storage companies with robust, reliable, and responsible supply chain policies can enhance the value of responsible supply chain policies throughout the entire supply chain system. These policies rely on internationally recognized established standards and audit protocols, which can simplify the implementation process and reduce the cost of implementing responsible supply chain policies.

Develop and implement responsible supply chain policies

>In order to effectively implement responsible supply chain policies, energy storage manufacturers and their internal stakeholders must embed policies into their daily management processes, rather than occasional reference or hindsight consideration. They must inform external stakeholders such as suppliers of their policies. These companies should also fulfill their commitments to avoid or reduce the adverse consequences of supplier behavior.