Engage with suppliers and source responsibly Companies should identify, assess and disclose their nature-related impacts, dependencies, risks and opportunities across the supply chain (see Table 1 for more information), incorporating environmental data from suppliers and starting by assessing priority sites and high-impact commodities.203 Where sourcing location data is available, companies can also use other available resources to screen supply chain risks (see Case study 1). To improve access to and quality of data, companies should educate suppliers on environmental data requirements and develop common data requests, supporting capacity- building and harnessing collective buying power to drive transparency (see more detail on improving standards and transparency in priority action 5). For example, BMW Group, Scania, Volvo Cars and Volkswagen Group were lead partners in creating a joint supplier questionnaire for parts procurement, which is increasingly becoming the industry standard.204 In addition, companies can incorporate nature- related performance criteria into the supplier due diligence and management processes, for example, by adding requirements to be deforestation-free205 or fossil-free, favouring non-overexploited raw materials or not sourcing materials from IUCN categories I-IV Protected Areas, Key Biodiversity Areas and World Heritage Sites.206 For example, Mercedes-Benz require all sourced cobalt and lithium to be from Initiative for Responsible Mining Assurance (IRMA)-certified sites.207 Alternatively, companies can provide incentives, such as shorter payment periods, to suppliers who advance nature action. Finally, companies can strategically engage with suppliers to advance nature action, either individually or by joining forces with other purchasers. This can be done by integrating nature requirements with existing climate sourcing requirements. For example: –Companies such as Mercedes-Benz, Volkswagen Group, BMW Group and Scania have formed partnerships to purchase low- carbon steel. For example, Scania set a joint target with SSAB to decarbonize all steel deliveries by 2030.208 –Volvo Cars, General Motors, Scania, Mahindra and Ford are members of the World Economic Forum’s First Movers Coalition (FMC), and use their purchasing power to decarbonize steel, aluminium or both. –More than 500 of Volkswagen Group China’s suppliers have signed a declaration committing to switching to renewable electricity.209 By 2025, Stellantis aim to ensure that suppliers (Level 1 and Level 2) aligned with 80% of their annual purchase value have CO2 reduction targets compliant with the Paris Agreement, and they mean to increase this share to 95% by 2030.210 Companies should identify, assess and disclose their nature-related impacts, dependencies, risks and opportunities across the supply chain. Nature Positive: Role of the Automotive Sector 34

Nature Positive Role of the Automotive Sector