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Daimler tackles the dirty secret behind clean cars

October 11, 2021, 9:30 AM UTC

Geologists say the fate of the world’s low-carbon future rests with six metals. Of those, cobalt may be the most precious and the most controversial.

The heat-resistant metal has a melting point of 1,493˚ C, making it an ideal material to ensure lithium-ion batteries—the kind found in laptops, mobile phones, and, most important for the climate, electric vehicles—don’t catch fire when we power them on. Cobalt’s value is reflected on commodities markets: It topped $51,500 per ton in September, a 32-month high.

Sixty percent of the world’s refined cobalt comes from one place: the copper-and-cobalt belt in the south of the Democratic Republic of the Congo. If there’s a ground zero for cobalt, it’s the mining city of Kolwezi, a place buzzing with gold-rush vitality. But Kolwezi is rarely mentioned in EV automakers’ “battery day” presentations. There’s a reason for that. For the past decade, mining in Kolwezi and the DRC has been synonymous with human rights abuses. The cobalt boom there coincided with the forced eviction of Congolese communities from resource-rich lands. Artisanal miners were detained unlawfully, often violently. And then there’s the staggering number of children toiling in the region’s open-pit cobalt mines. 

“While technologies like electric vehicles are essential for shifting away from fossil fuels, the battery revolution carries its own risks for human rights and the planet,” Mark Dummett, director of Amnesty International’s Global Issues Program, said in February, challenging business to create supply chains that contain only ethically extracted minerals.

One company stepping up is Mercedes-Benz parent company Daimler. The German auto giant made headlines this summer for its €40 billion ($47 billion) pledge to go all-electric by 2030. For a luxury-car brand that sells more than 2 million vehicles per year, that’s a lot of cobalt. 

But as it ramped up its EV ambitions, Daimler also set out to map all the places on the planet—from mines to smelters—that handle cobalt for its batteries. As of March 31, it had identified 183. It has sent teams of assessors to one-third of the locations, aiming to certify that each supplier meets its strict standards—including no kids in the mines and no contaminants spewed into the water or air. The plan is to extend the audits to battery components lithium and nickel too. Suppliers who don’t comply will get the boot, Daimler says. 

NGOs have pushed the corporate world into this action: In 2017, when Amnesty put out a report card on companies’ handling of child labor in the cobalt belt, most carmakers, including Daimler, got poor grades. Much has happened since then, including the formation of the Global Battery Alliance, a consortium of over 60 companies, NGOs, and monitoring groups, aiming to ensure the creation of a sustainable, ethically sourced cobalt supply chain. 

Ethical procurement isn’t a panacea, notes Mathy Stanislaus, director of public policy and engagement for the alliance. “You have to invest in the root cause,” he says. “This is a poverty issue.” With that in mind, since 2019 Daimler has also been investing in Kolwezi. It has earmarked €1 million for a program that has so far moved nearly 5,000 children out of the mines and into classrooms. The same initiative trains women and girls to be farmers, seamstresses, and business owners. Many of the women and children vow: They’re not going back to the mines.

A version of this article appears in the October/November 2021 issue of Fortune as part of the Change the World list.

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This story highlights Daimler, which earned the No. 6 spot on Fortune‘s 2021 Change the World list.