Auto-makers have exhibited increased traction to cut battery’s carbon footprint, encouraging solid-state battery industry players to propel environmental, social and governance (ESG) goals. Solid state batteries (SSBs) store more energy, provide greater safety and charge faster compared to liquid lithium-ion batteries. Since a few batteries are required, SSBs can boost energy density per unit, making the technology highly sought-after in the EV landscape. SSBs could propel the ESG performance with several watchdogs vouching for the batteries. According to Transport & Environment (T&E), solid state batteries can minimize the carbon footprint of EV batteries by two-fifths. With solid state batteries poised to be used in EVs by 2025, battery manufacturers have furthered their investments in the ESG ecosystem.
The sustainability of battery supply chains has become pronounced as companies seek to reap upsides from using SSBs. These batteries promise to attain the Paris Agreement, boost energy access and economic value and foster decarbonization. Companies could shift to a circular value chain to enhance their economic and environmental footprint and by harvesting end-of-life values from batteries. With investors looking for companies with better ESG scores, stakeholders could focus on deploying SSBs in electric vehicles. Stakeholders are bullish towards safe working conditions and have exhibited respect for human rights by keeping the child and forced labor at bay.
Environmental Perspective
The growth of SSBs is likely to foster green energy and e-mobility as stakeholders strive to minimize their carbon footprint. The European climate group has pitched for incentives for the production of batteries with a lower carbon footprint in the new EV battery regulations—EU governments and MEPs are negotiating the final text of the regulation. In December 2020, the European Commission reportedly tabled a proposal for the modernization of the regulatory framework for batteries and bolstering the sustainability of EU battery value chains.
Although SSBs are at a low technology readiness level, strong demand from EV manufacturers to offset initial costs and propel sustainability could augur growth. The need for intensive actions against climate change and to bring the automotive sector to greenhouse gas neutrality has become an enabler for technological advances and buoyant policies. For instance, Toyota Motor Corporation issued Challenge 2050 to underpin the creation of a more sustainable and inclusive society. The company aims to reduce CO2 emissions from new vehicles by 30% by 2025 and 90% by 2050.
Social Perspective
Industry partners have prioritized social contributions activities to enrich society and communities. In February 2022, Samsung SDI established a sustainable business management committee to propel ESG efforts. The company is gearing up for a full transition to renewable energy by 2050. The battery firm stood first with around 70% score, partly due to bullish efforts to propel work environment, diversity and human rights. In April 2022, Samsung SDI set out Safety Environment Management Policy to create safe and healthy corporate values, implement environmentally friendly management and form an external green community. In 2021, the company appointed around 299 CAs to take the organizational culture to the next level through team member development, fair appraisal, better collaboration, enhanced work efficiency and open communication.
Governance Perspective
Well-established and emerging players have reinforced governance, ethics and transparency to create a sustainable value for all stakeholders. Companies have raised the bar in ESG performance to pursue their sustainability vision. The repercussion of unsound governance could expand beyond the realm of financial results, prompting financial bodies to mandate governance disclosure reports. With environmental and climate issues placed at the top of agendas, governance practices and disclosures could underscore a culture of sustainable value creation.
