Define the future of the industry: the “lighting path” of CATL’s sustainable supply chain

Under the dual momentum of global sustainability and industrial transformation, a green, transparent, and traceable supply chain has become the new foundation for companies seeking to compete internationally in the next era. It is not only the key to unlocking access to the European market shaped by the EU Battery Regulation, but also a strategic investment - transforming the pressure of compliance into the strength of a trustworthy brand and establishing certainty amid an increasingly complex geopolitical landscape.

As sustainability becomes the new hard currency of global business, traceability and visibility across the supply chain have emerged as the most valuable forms of business capital.

Challenge

Not only “big,” but “strong.”

As the world’s largest battery manufacturer, CATL’s supply chain spans more than ten countries and covers a wide range of critical minerals, including cobalt, lithium, nickel, and graphite.

However, behind this vast scale lies the challenge of complexity:

• How do we effectively manage sub-tier suppliers?
• How do we translate international standards into actionable, locally implementable practices?
• How do we turn compliance investments into long-term competitiveness?

“We aim not only to build a supply chain, but to build a value chain.”

This vision has been the guiding principle behind CATL’s systematic investment in developing a sustainable supply chain over recent years.

Solution

Building a sustainable supply chain: The three critical pathways

Since 2019, CATL has partnered with SLR to launch a responsible sourcing mapping and audit programme, establishing three clear pathways toward sustainable supply chain transformation.

Pathway 1: From traceability to governance

• Conducted over 300 supply chain audits across more than ten countries, covering key nodes from cathode materials to mine sites.
• In 2024, upstream audits effectively reached deep-tier suppliers and addressed major risk points across the chain.
• Established corrective action plans (CAPs) and continuous monitoring mechanisms to ensure closed-loop management. The number of suppliers capable of designing and implementing effective remediation plans has increased significantly.

Pathway 2: From requirements to enablement

• Delivered targeted, on-site capacity-building programmes for key suppliers, covering risk identification, root cause analysis, and best practice implementation.
• Translated international standards into practical, understandable, and actionable steps tailored to local contexts.

Pathway 3: From Response to Leadership

• Developed a customised audit questionnaire fully aligned with the OECD Due Diligence Guidance for Responsible Mineral Supply Chains and Chapter VII of the EU Battery Regulation, assessing governance, risk management, third-party verification, and disclosure across environmental, social, and governance (ESG) dimensions.
• Proactively built an internal traceability platform to prepare for upcoming EU Battery Passport requirements.
• Embedded ESG standards into supplier qualification and performance evaluation systems, driving responsible sourcing from compliance to leadership.

Impact

Impacts: Creating value and building resilience

Years of systematic investment have translated into tangible value across multiple dimensions - commercial performance, risk management, and strategic resilience.

Traceability and governance: Building a shield against supply chain risks

Through more than 300 in-depth audits, CATL has become one of SLR’s most extensively audited battery manufacturers. The programme has systematically identified and mitigated potential risks that could disrupt supply chains or harm corporate reputation, turning ESG risks from “invisible” to “manageable and controllable.”

Enablement: Enhancing operational excellence and resilience

Structured capacity-building initiatives have improved suppliers’ average performance by more than 30%. This progress has not only strengthened ESG outcomes but also enhanced the overall quality, stability, and resilience of the supply chain.

Leadership: Evolving systems and deepening collaboration

Over years of collaboration, CATL has built an internal sustainability team well-versed in international standards and capable of independently driving responsible sourcing initiatives. SLR’s role has evolved from early-stage execution leadership to that of strategic advisor and technical partner, supporting the continuous improvement and maturity of CATL’s due diligence system.

Transformation: Turning compliance into business value

The increasing transparency and robustness of CATL’s supply chain have become a key enabler for deeper partnerships with leading global automotive manufacturers.

Insights: Three strategic choices of industry leaders

Drawing on SLR’s experience working with leading automotive manufacturers worldwide, we have found that companies building leadership in sustainable supply chains often make three critical strategic choices:

Choosing systemic governance over ad-hoc response

CATL recognised early on that building a sustainable supply chain is not a one-off audit exercise but a long-term, system-wide transformation. By establishing an integrated framework encompassing auditing, corrective actions, capacity-building, and continuous monitoring, the company has shifted from symptom-based fixes to root-cause governance.

Choosing value co-creation over one-way compliance

Leveraging SLR’s local teams and deep industry expertise in key mining regions, CATL has translated complex international standards into clear, actionable steps for suppliers at every tier. This approach has driven a cultural shift - from passive compliance to proactive improvement across the supply chain.

Choosing capability internalisation over external dependence

Through this collaboration, CATL has progressively embedded supply chain sustainability as an internal organisational capability, establishing a governance system capable of continuous improvement and long-term resilience.

Amid the global acceleration toward greener and more responsible industries, SLR has helped CATL transform supply chain compliance management from a regulatory obligation into a core source of competitive advantage. Beyond building an end-to-end due diligence and traceability system within the company, SLR has also worked to extend this capability across the broader value chain - setting standards that exceed industry norms, sharing best practices, and empowering every partner along the way.

From going beyond self-compliance to driving an entire ecosystem toward greater transparency and stronger resilience, SLR and CATL together are redefining the boundaries of corporate responsibility and shaping a new paradigm for sustainable global supply chains.