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Sustainability Focus - 06/07/2015

The still little-known responsibility of automobile and hardware manufacturers in conflict zones

The nineteenth edition of our Sustainability Focus.‎

In order to obtain the mineral supply essential for the manufacturing of their products, automobile and hardware manufacturers are confronted by the question of their own social responsibility in the management of their international supply chains. Many of these minerals are located in conflict zones which, in certain cases, are characterized by areas of lawlessness. What measures do these companies take to prevent the risks of complicity in violation and to reasonably ensure the respect of human rights in their operations? This exclusive study, produced by Vigeo research, offers an update on this important challenge.

Companies’ responsibility to ensure respect for human rights by their subsidiaries and supply chains is gaining traction on the political agenda. The final G7 declaration from early June and the vote by European Parliament in May of 2015 explicitly request an extension of the obligation for companies to monitor their supply chains. This study, produced by Vigeo ratings, describes the challenging context in which companies, in particular in the Automobile and Hardware sectors, must operate.

The majority of North American companies in these sectors publicly account for their use of conflict zone minerals. Article 1502 of the American “Dodd-Frank” law, which aims to combat the financing of conflicts in mineral trade regions, has played a role in accelerating the progress of reporting. However, we observe that companies from these sectors registered in regions like Europe or Asia-Pacific where there is no reporting regulation, take initiatives on their own to publish reports on their use of conflict-zone minerals.

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Keywords : ESG, World