Facing May deadline, carmakers invite action on conflict minerals

At the AIAG Corporate Responsibility Summit, where automakers and suppliers are meeting near Detroit this week, I joined with other members of the global auto industry to launch an awareness campaign designed to accelerate action on conflict minerals, identified in a new survey (PDF) as the most significant issue facing the industry this year.

Thousands of companies face a May 31 deadline to file a Conflict Minerals Report with the U.S. Securities and Exchange Commission, as required by law, and many more who do business with them will be asked to report up the supply chain. With that in mind, the Automotive Industry Action Group (AIAG) created the conflict minerals campaign microsite, our latest tool to engage new and existing audiences by simplifying this complex issue.

The when, why and how of industry action

At AIAG, where I lead our corporate responsibility program, we started working on conflict minerals with our more than 1,000 member companies more than three years ago, when the Dodd-Frank Act was passed and set reporting requirements in motion.

By April 2011, AIAG and six of our largest members — Chrysler, Ford, General Motors, Honda, Nissan and Toyota — issued a call to action to thousands of suppliers, encouraging them to join industry efforts and find common solutions to the conflict minerals issue. Our aim, then and now, is to do whatever we can as an industry to ensure that global vehicle production does not support armed conflict in central Africa, where the conflict minerals tin, tantalum, gold and tungsten often are mined.

The new campaign microsite illustrates how the use of conflict minerals benefits warlords and harms people in central Africa; how conflict minerals end up in vehicles and other consumer products; what action the auto industry has taken on the issue; and how companies can engage with AIAG on conflict minerals and meet the reporting deadline. We then guide people to resources, created by AIAG and our member companies, on the need to get started on conflict minerals reporting and complete the process including FAQs (PDF) and a checklist (PDF), a case study (PDF) on the approach several automakers and suppliers are taking, and two reporting tools we endorse: the Conflict-Free Sourcing Initiative’s Conflict Minerals Reporting Template and the iPoint Conflict Minerals Platform.

The importance of accelerating action on conflict minerals is confirmed by AIAG’s new Global Automotive Corporate Responsibility Survey (PDF). Nearly half of companies polled have a policy on conflict minerals reporting — yet only half of those companies with a policy said they will meet the SEC deadline, as required by law. The online survey (conducted in March) of more than 550 professionals working on corporate responsibility (CR) in automotive, manufacturing and other industries in 40 countries also revealed that AIAG member companies are more likely to have a conflict minerals policy, and more likely to meet the reporting deadline.

Survey: Energy efficiency, working conditions and reporting important too

Overall, more than seven in 10 survey respondents said CR is a significant priority at their companies, including issues related to business ethics, energy use and conservation, environmental emissions, reporting and supply chain transparency. The survey also found that:

Reducing energy use and waste are the most important environmental goals

  • More than 70 percent of survey respondents said it was most important to meet reduction goals for energy use and waste, followed by water use, air emissions and greenhouse gas emissions.
  • With that said, more than a third of the companies surveyed already have met their reduction goals in energy use and waste, while more than 70 percent of companies surveyed have sufficient data to benchmark operations in these areas.

Practices are in place to ensure responsible working conditions

  • Nearly 80 percent of companies surveyed have a policy or expectations for responsible working conditions.
  • If mandated, more than half of the companies (57 percent) surveyed can demonstrate that their supply chain does not include the use of forced or trafficked labor.

The benefits of CR reporting are recognized, but the practice can be more common and rigorous

Only 30 percent of companies produce a CR report, and 8 percent plan to do so — less than the sum of those that don’t produce a report (19 percent) or don’t know if their company produces a report (43 percent). Of those who do report, only 23 percent use the Global Reporting Initiative (GRI) Framework. Most (67 percent) don’t know if the GRI Framework is used.

The survey confirms that the global automotive industry is focused on significant corporate responsibility issues. But it also reinforces the need to work together and intensify our efforts in other areas, such as conflict minerals reporting.

Top image of car alternator by testing via Shutterstock