Do battery makers need a cobalt due diligence policy?

Yes, in many cases they do. A battery manufacturer that buys, processes or places cobalt-containing batteries on the market will often need a documented due diligence policy for cobalt sourcing, not just a few supplier questionnaires and contract clauses. If your customers are in automotive, energy storage, electronics or public procurement, a formal policy is usually the minimum needed to show that cobalt risks are identified, assessed and managed in a consistent way.

The short answer to the question, do battery manufacturers need a due diligence policy for cobalt sourcing, is that many already do in practice, and more will need one as regulatory and customer scrutiny increases. Even where a specific law does not name cobalt in your exact product category, the combination of human rights expectations, battery traceability requirements, ESG reporting and buyer audits makes an informal approach hard to defend.

Cobalt sourcing creates a distinct set of risks for battery manufacturers. Those risks sit across legal compliance, continuity of supply, customer acceptance and brand protection. A manufacturer that cannot show where cobalt came from, who handled it, and what checks were performed will struggle when an OEM, regulator, lender or auditor asks for evidence.

The first issue is human rights risk. Cobalt has long been associated with concerns around artisanal and small-scale mining, child labour, unsafe working conditions, informal trading routes and weak site controls in some producing regions. Not every cobalt supply chain carries the same level of risk, but cobalt is widely treated as a high scrutiny raw material. That means we cannot rely on assumptions based on country of processing or on a supplier’s broad assurance that its material is “responsible”.

The second issue is supply chain complexity. Battery manufacturers rarely buy directly from a mine. Cobalt may pass through traders, concentrators, refiners, cathode active material producers and cell manufacturers before reaching the final battery pack. At each stage, material can be blended, relabelled or converted into a different chemical form. Without a formal due diligence process, traceability breaks quickly, and once it breaks, it is difficult to reconstruct.

The third issue is that cobalt due diligence is no longer just a procurement matter. It feeds into product compliance, sustainability disclosures, customer tenders, financing and market access. If we make batteries for the EU market, cobalt-related information can become relevant to battery passport data, broader supply chain transparency and claims made in technical documentation. If we export from the UK into the EU, we need to think about both UK business expectations and the specific EU product and sustainability rules our customers must meet. For that wider context, it helps to review battery passport rules UK exporters need before EU sales.

An informal approach usually fails for one simple reason. It is not repeatable. A few emails from suppliers, a code of conduct on a website and a spreadsheet of smelter names do not show a managed system. A policy matters because it sets the rules for the whole organisation. It tells procurement what to ask for, quality what to verify, legal what standards to contract, compliance what to monitor, and management what issues must be escalated.

A documented cobalt due diligence policy becomes necessary well before a regulator sends a notice. In practice, we are likely to need one in at least five common situations.

First, when selling to automotive customers or their tier suppliers. Automotive buyers increasingly require structured evidence on raw material sourcing, conflict-affected and high-risk area controls, human rights due diligence and battery traceability. Even if the customer’s direct requirement is framed as ESG or supplier code compliance, the practical expectation is a written policy backed by records.

Second, when placing batteries on the EU market, especially where the product falls within the scope of the EU Battery Regulation and related product data expectations. The regulation is broader than a cobalt policy on its own, but it pushes manufacturers toward documented upstream controls and verifiable material data. If we are preparing for battery passport obligations, we should align our cobalt due diligence policy with the product data model from the start. A useful companion is what data a battery passport needs.

Third, when investors, lenders or parent companies expect formal human rights due diligence. Many financing and governance processes now ask whether we have a board-approved policy, a risk assessment method, supplier engagement steps and remediation procedures for high-risk minerals and materials. A company that answers only with general ESG statements will often be asked for something more specific.

Fourth, when operating in or selling into jurisdictions with supply chain due diligence or corporate sustainability reporting expectations. In the EU, this can arise through a mix of sector rules, reporting duties and customer flow-down requirements. In the UK, the framework is not identical. UK companies do not simply follow “the EU rule” by default. Instead, they may face obligations through UK modern slavery reporting, procurement expectations, sector-specific customer requirements and the need to satisfy EU customers or importers. So the practical need for a cobalt policy can be just as strong in the UK, even where the legal route is different.

Fifth, when our own supplier base includes higher-risk sourcing patterns. For example, if cobalt origin is unclear, if refiners change frequently, if suppliers resist naming smelters or refiners, if chain of custody evidence is weak, or if recycled and virgin material streams are mixed without clear controls, then a formal policy is not optional. We need one to define what is acceptable and what triggers escalation.

No single document covers everything. For cobalt, we need to look at a combination of legal requirements, customer-driven standards and recognised due diligence frameworks.

The starting point for many businesses is the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Even where cobalt is not named in a customer contract, the OECD model is often the benchmark used to assess whether a company’s system is credible. Its five-step structure is practical and widely recognised: establish strong management systems, identify and assess risks, design and implement a response strategy, carry out independent third-party audit at relevant points in the supply chain, and report on due diligence.

We also need to consider the EU Battery Regulation. It matters because it creates product-level obligations and data expectations for batteries placed on the EU market. Depending on the battery category and implementation timeline, manufacturers may need to provide technical documentation, sustainability information and digital product passport data that depend on robust upstream material controls. For a broader view of implementation, see battery passport reporting rules businesses need to meet.

For companies with EU operations or EU customers, corporate sustainability and human rights frameworks also matter. These can include reporting regimes and due diligence expectations under EU law, as well as national laws in member states that influence customer requirements. Even if our company is outside the EU, an EU customer may flow these expectations down through supplier onboarding, contract schedules and audit rights.

In the UK, the legal landscape differs. There is no direct copy of the EU Battery Regulation in force simply because a battery is made or sold in Britain. But UK businesses still need to consider the Modern Slavery Act 2015, general product compliance duties, anti-bribery controls where sourcing intermediaries are involved, and the reality that UK exporters into the EU must support their customers’ EU compliance position. So if we manufacture in the UK and sell into the EU, we should build the policy to meet the stricter route where possible, rather than run separate low and high standard systems.

Beyond legislation, customer and industry frameworks often carry real weight. These may include supplier codes based on the UN Guiding Principles on Business and Human Rights, alignment with OECD expectations, and audit schemes or assurance programmes focused on mineral supply chains. We should map which frameworks our key customers actually use, because that determines what evidence they will ask for.

A usable cobalt due diligence policy needs to be specific enough to drive decisions. A vague commitment to “ethical sourcing” is not enough.

Start with scope. The policy should define which products, business units, entities and supply chain stages it covers. It should state whether it applies to cobalt in mined, refined, chemical precursor, cathode material, cell and battery form, and whether it also covers recycled cobalt inputs.

Set out the standards we require from suppliers. That normally includes compliance with applicable law, adherence to our supplier code, cooperation with traceability requests, disclosure of smelters and refiners, support for audits, and prompt notification of sourcing changes or serious incidents. We should make clear that suppliers must cascade equivalent requirements down their own supply chains.

Include a risk-based sourcing approach. The policy should explain how we classify supply chains by risk, what factors are considered, and what enhanced due diligence is required for higher-risk cobalt. Typical factors include country of origin, use of intermediaries, known artisanal mining exposure, incomplete chain of custody, sanctions concerns, adverse media and gaps in third-party assurance.

Define traceability expectations. We should state what origin and processing information suppliers must provide, at what frequency, and in what format. If our products are moving toward digital product passport readiness, the policy should align with the material and batch data we will later need to publish or verify. This becomes easier if we understand early what battery raw material suppliers need to provide for passport data.

Add clear escalation rules. The policy should not just say we will investigate concerns. It should specify what happens if a supplier refuses disclosure, if a smelter cannot be identified, if there is evidence of child labour, or if a high-risk source cannot be adequately mitigated. Possible actions include corrective action plans, temporary suspension, intensified monitoring, executive review, or termination.

Include grievance and speak-up channels. Workers, communities, suppliers and internal teams need a route to raise concerns about cobalt sourcing without retaliation. The policy should identify where grievances can be submitted, who reviews them, how confidentiality is handled, and how outcomes are tracked.

Set governance responsibilities. Procurement, compliance, sustainability, legal, quality and senior management each need named roles. We should identify who owns the policy, who approves supplier exceptions, who reviews high-risk cases and how often the policy is updated.

Finally, commit to reporting and recordkeeping. A policy is only useful if it requires evidence to be created and retained.

The difference between a policy that reads well and a policy that survives scrutiny is evidence. Auditors, customers and regulators do not assess intent alone. They assess whether we can show what we did, when we did it, and why we considered it sufficient.

The first operational step is supplier onboarding. We need a documented process that screens cobalt-related suppliers before approval. That usually includes a supplier questionnaire, beneficial ownership and sanctions checks where relevant, acceptance of our supplier code, disclosure of smelters or refiners, and collection of supporting certifications or assurance statements. If a supplier cannot provide basic origin and processor information, that should be visible in the onboarding record and escalated before commercial approval.

The second step is maintaining a current supply chain map. For each cobalt-containing material stream, we should be able to identify the direct supplier, relevant processor, refiner and, where feasible, upstream origin information. Where exact mine-level traceability is not available, we should document the limitation, the reason, and the mitigating controls we rely on.

The third step is risk assessment and review cadence. We need a method, not just an opinion. That means a documented risk matrix, periodic reassessment, triggers for ad hoc review, and records of decisions. If a supplier changes smelter, adds a new source country, or is linked to an incident, the file should show that the risk rating was revisited.

The fourth step is contractual control. Our supply agreements should include due diligence cooperation clauses, audit rights, notification obligations for sourcing changes, rights to request remediation, and consequences for non-compliance. If these clauses are not standard in our procurement templates, the policy will be difficult to enforce.

The fifth step is product and batch-level data management. If we need to support battery passport, customer declarations or technical files, cobalt due diligence cannot live only in a compliance folder. It must connect to product records. We need a way to link supplier and material data to bill of materials, batch or lot identifiers, and the batteries placed on the market. Businesses assessing systems for this often start by comparing battery traceability tools for manufacturers.

We also need internal records of training, supplier engagement, corrective action plans, grievance handling, management reviews and any decisions to continue, suspend or terminate sourcing. If a customer asks how we responded to a red flag, we should be able to show the timeline, the evidence reviewed, the decision-maker and the follow-up.

For companies selling into the EU, it is worth building the evidence set with future disclosure in mind. A customer may first ask for a policy, then for supplier lists, then for product-level data that supports passport or sustainability statements. If we design our cobalt due diligence process to feed those outputs from the start, we avoid duplicate work later.

So, do battery manufacturers need a due diligence policy for cobalt sourcing? If cobalt is in our batteries and our products move through serious commercial supply chains, the practical answer is very often yes. A written policy is how we turn a known high-risk material into a managed sourcing process, and how we prove that process when someone asks to see it.