Insights 2024.05.31

Human rights and environmental due diligence under EU Battery Regulation ①

table of contents

Zeroboard Inc. Sales Division Manager Taiji Ono

In response to EU Battery Regulation, there is an increasing possibility that human rights and environmental due diligence (DD) will be required before the disclosure of the battery's carbon footprint (CFP).

Against this background, we have been receiving an increasing number of Contact us not only about CFP compliance, but also about DD compliance. In this column, we would like to first introduce the original Contents on human rights DD in compliance with EU Battery Regulation , and then introduce the actions that companies should take.

1.CHAPTER VII Obligations of economic operators as regards battery due diligence policies

First, let us start by reviewing the text that corresponds to the human rights DD in the original text of the EU Battery Regulation , which was published in August 2023. The following three points are of major importance.

[Article 47]

This Chapter does not apply to economic operators that had a net turnover of less than EUR 40 million in the financial year preceding the last financial year, and that are not part of a group, consisting of parent and subsidiary undertakings, which, on a consolidated basis, exceeds the limit of EUR 40 million.

➡︎ Eligible for businesses with net sales of at least 40 million euros in the previous financial year

[Article 48]

From 18 August 2025, economic operators that place batteries on the market or put them into service shall fulfil the due diligence obligations laid down in paragraphs 2 and 3 of this Article, and in Articles 49, 50 and 52 and shall, to that end, set up and implement battery due diligence policies.

➡︎ Effective from August 18, 2025

Economic operators referred to in paragraph 1 of this Article shall have their battery due diligence policies verified by a notified body in accordance with Article 51 (‘third-party verification’) and periodically audited by that notified body to make sure that the battery due diligence policies are maintained and applied in accordance with Articles 49, 50 and

52. The notified body shall provide the audited economic operator with an audit report.

➡︎ Third-party verification by a notified body (hereinafter referred to as ND) is required. DD policies are also subject to regular audits by ND .

By 18 February 2025, the Commission shall publish guidelines as regards the application of the due diligence requirements laid down in Articles 49 and 50, with regard to the risks referred to in point 2 of Annex X, and in line, in particular, with the international instruments referred to in points 3 and 4 of Annex X.

➡️ Guidelines will be published by February 18, 2025

(Source) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R1542

This DD response also requires third-party verification by nd of the DD procedures and results, and as this is close to the time for CFP disclosure, it has not yet been made public which organization will serve as nd. However, many businesses are expected to submit third-party verification requests to nd in order to comply with EU Battery Regulation, and it is necessary to take into account the risk that certification may not be obtained within the expected period of time.

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2. What exactly is human rights compliance?

In this chapter, before discussing specific human rights due diligence responses to the EU Battery Regulation, we will explain the basic flow of human rights responses and implementation matters based on the Contents of the United Nations Guiding Principles on Business and Human Rights and other documents.

3. Approaches to human rights due diligence and human rights due diligence in the EU Battery Regulation

This article discusses the process of identifying and assessing adverse impacts, which is the first step in human rights due diligence, the specific Contents of human rights due diligence responses required by the EU Battery Regulation , and responses based on the results of the Ministry of Industry's pilot project.

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GHG emission amount calculation/visualization,
For centralized management of environmental items
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Article author

Taiji Ono(Sales Headquarters General Manager)
After graduating from university, he joined TOYOTA MOTOR CORPORATION Company, where he gained a wide range of experience in planning new models and mobility Service. He then worked full-time for the labor union. As Deputy Executive Chairman, he promoted the formulation of company-wide policies based on the two pillars of digital and carbon neutrality. He then joined the Top Support Liaison Team. In addition to external negotiations such as collaboration with the Ministry of Economy, Trade and Industry and activity with the Japan Automobile Manufacturers Association, he was also involved in a wide range of activities, including the formulation of company-wide BEV plans. He joined Zeroboard in July 2022. He is responsible for the development of decarbonization solutions for automobiles, logistics, Retail, etc., as well as various business strategies and overseas expansion.