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Weekly Roundup - Apple Sources from Congo Conflict Areas, Microsoft Demands Carbon Removal and BMW Imports Cars with Banned Parts

Yulia Fedorova

24 May 2024

The pandemic underscored the vital role of maritime shipping in maintaining global trade, as disruptions from Covid-related lockdowns and border closures led to shortages and inflation, revealing the fragility of seaborne trade routes. These vulnerabilities persist, now compounded by geopolitical tensions, such as the conflicts in Ukraine and Gaza, the US-China standoff, and environmental threats like climate change impacting ports and shipping routes. A Bloomberg News report, utilizing data from Clarkson Research Services, highlights six critical maritime choke points crucial to a significant portion of global trade, vulnerable to disruptions from both geopolitical conflicts and natural disasters. It mentions significant incidents like the grounding of the Ever Given container ship in the Suez Canal and the Baltimore bridge collapse, which had substantial economic repercussions. The disruptions also have broader economic effects, indicated by the recovery in Euro-area business activity as per the S&P Global purchasing managers’ index. This situation stresses the importance of vigilance and preparedness to protect these essential trade routes from potential crises.

Source: Clarksons Research

International lawyers representing the Democratic Republic of Congo have accused Apple of potentially sourcing minerals from conflict-ridden areas in eastern Congo. The lawyers have urged Apple to address these ethical concerns and mentioned they are considering legal actions. Despite being notified in April, Apple has yet to respond to these allegations. The eastern region of Congo has been afflicted by violence and conflict over resources, involving various armed groups and influences from neighboring countries. Apple has previously stated that it does not directly procure minerals from primary sources and has been auditing its suppliers, claiming full participation in independent third-party conflict minerals audits for its products manufactured in 2023. However, some individuals involved in Apple's supply chain verification alleged their contracts were terminated after raising concerns about "blood minerals" in Apple's supply chain.

Microsoft has mandated key suppliers to use 100% carbon-free electricity, part of their broader strategy to align with ambitious environmental goals outlined in their 2024 Environmental Sustainability Report. Launched in 2020, Microsoft's sustainability goals aim for carbon negativity, water positivity, zero waste, and protecting more land than they use by 2030. The report highlights significant progress in reducing operational emissions, accelerating carbon removal, minimizing waste, and enhancing biodiversity and land protection. However, the company faces challenges in reducing Scope 3 (indirect) emissions, which have increased by over 30% since 2020, primarily due to datacenter construction, leading to a 29% rise in overall emissions despite reductions in direct emissions. To address Scope 3 emissions, Microsoft has identified over 80 measures, including the new carbon-free electricity requirement for suppliers, improving measurement, increasing efficiency, developing greener materials, and advocating for climate-focused public policy changes. Additionally, water sustainability efforts include reducing water use intensity, optimizing datacenter cooling, partnering on water advocacy, and developing replenishment projects in high-stress areas.

A U.S. Senate report disclosed that BMW imported over 8,000 Mini Coopers into the United States, which contained electronic parts from the banned Chinese supplier Sichuan Jingweida Technology Group (JWD), suspected of using forced labor. Despite the Uyghur Forced Labor Prevention Act of 2021, BMW continued using these components until April. BMW has since pledged to replace the affected parts and stressed its commitment to human rights and strict supplier standards. The investigation revealed that Bourns Inc., a U.S. supplier, sourced parts from JWD and provided them to Lear Corp, which then supplied BMW and other automakers. Lear informed BMW, Jaguar Land Rover, Volvo, and Volkswagen about the banned parts in January. Jaguar Land Rover imported parts containing JWD components but stopped and quarantined them upon discovery. Volkswagen also held thousands of vehicles at U.S. ports due to JWD parts but has since replaced them.

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Dive deep into research

"Estimating scope 3 greenhouse gas emissions through the shareholder network of publicly traded firms" by Mejia, C. and Kajikawa, Y.(2024)

"Driving change in the Democratic Republic of Congo : an initial mapping of participation in mineral regulation and responsible sourcing" by Katz-Lavigne, S., Arian, H., Deberdt, R. and Geenen, S. (2023)

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