According to foreign media reports, the American Energy Storage Association (ESA) recently released a sustainable energy storage supply chain policy guidelines for building energy storage supply chain policies that conform to ESG (environmental, social and governance).
Lithium-ion batteries are mainly deployed in electric vehicles and fixed grid-connected battery energy storage systems, but have been reviewed for potential ESG risks related to labor conditions and environmental impacts in their supply chain. The American Energy Storage Association cited a study by the American Electric Power Research Institute (EPRI), which defined three main problems faced in the supply chain of lithium-ion batteries: In general, 50% of the global cobalt supply comes from Congo. 15% to 30% of the cobalt comes from small mines with poor working conditions and a threat to personal safety. • The mining and processing of lithium mines has a great impact on the environment. The extraction, processing, transportation and manufacturing stages of lithium ion battery production produce large amounts of greenhouse gases.
The guidelines issued by the American Energy Storage Association focus on establishing supply chain policy objectives, developing evaluation methods, evaluating policy options, compiling and implementing supply chain policies, and measuring and communicating progress towards the objectives. Establish supply chain policy objectives The American Energy Storage Association said that energy storage system integrators or developers that do not meet ESG policies need to cover a series of ESG topics to establish their supply chain policy objectives. Energy storage vendors that have developed some ESG policies can establish supply chain objectives by applying their existing ESG policies to their suppliers. The guidance points out that energy storage vendors with more targeted ESG goals can extend their goals into the supply chain to maintain consistency, and these companies can also extend their ESG obligations to their suppliers. Development of an assessment methodology After setting ESG goals, energy storage vendors must develop methods to assess progress towards these goals. The scope and rigor of supply chain analysis depends on the nature of the target and the position of the energy storage manufacturer in the value chain. Direct observation and evaluation of the supply chain of energy storage manufacturers can provide important information, but may require more resources to effectively complete. On the other hand, energy storage manufacturers rely on reports from intermediate suppliers to reduce the resource burden of assessing target progress, but limit their visibility into the supply chain. However, energy storage manufacturers with robust, reliable and responsible supply chain policies can reinforce the value of responsible supply chain policies throughout the supply chain system. These policies rely on internationally accepted established standards and audit agreements, which can simplify the implementation process and reduce the cost of implementing responsible supply chain policies. Develop and implement responsible supply chain policies In order to effectively implement responsible supply chain policies, energy storage vendors and their internal stakeholders must embed policies into the day-to-day management process, rather than occasional references or after-the-fact considerations. They must inform external stakeholders such as suppliers of their policies. These companies should also fulfill their commitments to avoid or reduce the adverse consequences of supplier actions. The American Energy Storage Association said that energy storage manufacturers can also provide a code of conduct for suppliers when conducting transactions with purchasing companies. They should also include implementation details in the bid application (RfP) and contract, which are omitted from the commitment and code of conduct. Policy implementation should also include a regular or continuous process of reconsidering and updating policies. 
Communicate progress towards the goals Most large public companies report their ESG progress in their annual reports. However, these reports are prepared for ESG investors and may not provide detailed information on compliance with supply chain policy objectives. Responsible supply chain policies for labor working conditions and local environmental impacts have qualitative results that do not change from year to year and are less relevant in the annual reporting format. However, supply chains change over time, and supply chain policies should change with market changes. Regular monitoring and reporting is therefore necessary. Responsible supply chain policies are commonplace but not common in energy storage. Energy storage manufacturers should formulate responsible supply chain policies to improve the safety and sustainability of the energy storage industry and reflect their corporate goals. Wood Mackenzie said in a report that the United States installed a record 3.51GWh of energy storage system in the third quarter of 2021. According to a survey released by Lawrence Berkeley National Laboratory, the cumulative installed capacity of solar power generation facilities deployed in the United States will be about 460GW by the end of 202020. Among them, 34% solar power generation facilities (160GW) are equipped with battery energy storage systems.
