Rivian is approaching an IPO in the coming weeks that could attract a valuation of around $ 80 billion and raise between $ 5 billion and $ 8 billion for the company.

By Ben Klayman

DETROIT: A union-affiliated pension fund adviser said he was pressuring Rivian over human rights and environmental issues in the electric vehicle startup’s battery supply chain before his IPO expected.

SOC Investment Group, in a letter sent Wednesday to Rose Marcario, a member of the board of directors of Rivian, called on the Irvine, Calif.-Based company to “engage in a rigorous human rights assessment of Rivian and its value chain “before finalizing the S-1 document with US regulators for its IPO. SOC provided a copy of the letter to Reuters.

“Failure to address potential human rights violations and environmental damage associated with the battery life cycle exposes Rivian to significant regulatory, litigation and reputational risks,” said the executive director of SOC, Dieter Waizenegger, in the letter, calling on Rivian to respond by November 3.

“It was just baffling for us as we walked the S-1 that they were completely silent about it,” he added in an interview with Reuters, citing the company’s marketing to consumers who enjoy an outdoor lifestyle. “The supply chain and production (of batteries) carries many human rights risks. “

As environmental, social and corporate governance issues gain importance to investors, automakers have come under pressure to prove that minerals such as lithium and cobalt for their vehicle batteries electricity are obtained without violation of human rights.

In the past, Tesla CEO Elon Musk has expressed a desire to eliminate the use of cobalt from the leader’s electric vehicle batteries due to the financial and reputational risk of a metal associated with child labor and poor security conditions in artisanal mines in the Democratic Republic of Congo, the world’s largest producer.

SOC called on Rivian to adopt policies to identify and prevent human rights risks and environmental impacts across its supply chain, based on the United Nations Guiding Principles for Business.

He also wants Rivian to publicly support a moratorium on seabed mining, adopt a policy prohibiting the purchase of seabed minerals, appoint a committee of the board to oversee these issues, and report annually to investors on the issues. company efforts.

Rivian said the health and well-being of people and the planet influences how it works.

“Working with material suppliers and supply chain partners on ethical sourcing practices is an essential part of this,” the company said in a statement. “As we have indicated in our IPO filing documents, we are committed to adopting responsible environmental, social and governance practices, which include in-depth reporting and disclosures.”

Rivian is approaching an IPO in the coming weeks that could attract a valuation of around $ 80 billion and raise between $ 5 billion and $ 8 billion for the company. Its pre-IPO investors include Ford Motor Co, Amazon.com, T. Rowe Price and BlackRock.

SOC, formerly known as CtW Investment Group, is an advisor to union pension funds which have more than $ 250 billion in assets. He’s taken a more activist approach with companies like Doordash, Uber and Lyft, around issues like board diversity, executive compensation and the company’s share structure.

This is the first time SOC has contacted an automaker about the battery supply chain, and Waizenegger said he would raise the issue with other automakers, as well as investors.

Waizenegger cited BlackRock, the world’s largest asset manager, as having demanded the companies it invests in to prevent human rights violations. He said SOC has yet to contact BlackRock regarding his letter to Rivian.

He also said that automakers such as Ford and Daimler AG are committed to protecting human rights and the environment. In addition, AB Volvo and BMW supported a call for a moratorium on deep-sea mining.

Amnesty International, which has reported human rights violations in cobalt mines in Africa in the past, has taken note of SOC’s letter to Rivian and welcomed the initiative. He was one of the authors of a report demanding that companies in the battery supply chain protect human rights and the environment.

Richard Kent, the organization’s human rights and energy transition researcher, said not all automakers fail to implement the UN Guiding Principles on Business and Human Rights .

“Investors are playing an increasingly active role in due diligence around the world, especially in companies leading the energy transition,” he said.

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