Recap: A complex, self-compounding risk environment
In sum, having assessed each of the five main battery metals, three risk levels emerge, all of which are amplified by growing external scrutiny and pressure:
Due diligence risks and compounding factors in the Li-ion battery supply chain
Figure 6
The present and potential commercial impact of these risks
Many of the risks identified above are of a humanitarian nature and companies have a social responsibility to address them, but responsible sourcing is not only a corporate social responsibility (CSR) issue.
Not responding to these risks can have potential reputational, commercial, legal, and operational consequences for businesses in the battery supply chain which can affect the bottom line:
- Reputational: Brand deterioration, permanent reputational loss, large-scale negative media / NGO campaigns
- Commercial: Customers and business partners terminate business relationships (loss of market share), loss of investors, a drop in share price
- Legal: Loss of business license, lawsuits
- Operational: Antagonistic community relations, loss of social license and loss of political license to operate, staff safety no longer guaranteed