At the New York Climate Week, Mercedes-Benz and Hydro elevate their strategic partnership by enhancing the vertical integration of their aluminium supply chain and launching the long-term Corridor Program for a sustained development in the Amazon. Following their joint decarbonization roadmap Mercedes-Benz and Hydro signed a Memorandum of Understanding (MoU) to collaborate with local NGOs and partners in the state of Pará, Brazil. Their goals include promoting human rights, generating income for local communities, fostering biodiversity and low-carbon value chains in the Brazilian Amazon.
“In managing our supply chains responsibly, we concentrate on three goals: The decarbonization of our products, the promotion of human rights and the focus on more sustainability over the vehicles’ entire life cycle. The joint Corridor Program manages to connect all three. In close cooperation with our partners, it has the potential to push the vertical integration of our supply chain to a new level.“
Dr. Gunnar Güthenke, Head of Procurement and Supplier Quality Mercedes-Benz Cars
The Corridor coalition aims to create a positive impact for the communities along the 244-kilometer bauxite slurry pipeline operated by Hydro, which runs through seven municipalities in the state of Pará, Brazil – from the Paragominas bauxite mine to the Alunorte alumina refinery in Barcarena. The goal is to engage local communities along the aluminium supply chain and empower them to improve their economic, ecological, and social well-being. Mercedes-Benz is part of the program’s governance, helping to establish necessary structures and build knowledge for sustainable risk management in raw material supply chains.
The Corridor initiative reflects the company’s commitment to a “Just Transition”: Prioritizing people and human rights along with responsible policies and community engagement as the decarbonization of the Mercedes-Benz Group’s business model leads to significant changes in technology, products, and workforce. The program has the potential to become a blueprint for the involvement of local communities and getting vertically engaged in vulnerable mining areas.
“The joint program with Hydro in Brazil serves as a model: We are sourcing aluminium with reduced CO2-emissions and are firmly committed to uphold human rights along our supply chain. In doing so, we are putting our sustainable business strategy into practice. A special focus is placed on engaging with the local communities. This example demonstrates that decarbonization measures and social considerations can go hand in hand for a successful sustainable transformation.”
Renata Jungo Brüngger, Member of the Board of Management of Mercedes-Benz Group AG. Integrity, Governance & Sustainability
“We are excited to further develop our strategic partnership with Mercedes-Benz, expanding our collaboration beyond low-carbon product development to create positive social and environmental impact in the Amazon. Working together, we aim to lift sustainability throughout our shared value chain, from mine to end-consumer product, while fostering economic opportunities and biodiversity conservation in the communities where we operate.”
Eivind Kallevik, President and CEO in Hydro
The program has been rethought from the ground up and is built on a fundraising concept. While some projects, like scaling up local farming (Tipitix) or sewing initiatives (Estilo), are already underway, the Corridor coalition aims for long-term value creation. Local communities living around the pipeline will identify and prioritize projects, ensuring they directly benefit their regions. This approach empowers local stakeholders to foster ownership and align with the project’s overarching goals. This way Corridor intends to achieve improvements for the local people. Hence, data-based tracking of effectiveness will be a crucial part of the governance.
The program will be anchored on three strategic pillars:
- Economic Development: Identifying obstacles to the economic development and finding solutions to improve the conditions for raw material value chains in the territory.
- Social Development: Large scale approach to social development, targeting basic human needs, well-being, and opportunities. The program will pursue practical ways to implement improvements to the condition of life in the communities, both in urban centers but mainly in rural areas (e. g. ongoing TerPaz program).
- Environment and Biodiversity conservation: Working on the conservation of biodiversity in the Amazon, required to ensure positive gains for people and nature.
The program will identify opportunities to reduce degradation of forests as a first target but with an ambition to contribute to the regeneration of nature. The projects will operate in strict compliance with Brazilian laws and regulations. Moreover, the program will be implemented by a multi-institutional project organization composed by the companies and organizations. Partners include (but not limited to) Hydro Brazil, Alunorte, MPSA, Mercedes-Benz, IPAM*, IMAZON**, CEA***, Hydro Sustainability Fund and BCG.
* IPAM Amazonia ** Instituto do Homem e Meio Ambiente da Amazônia *** Centro de Empreendedorismo da Amazônia **** Net carbon-neutral means that carbon emissions that are not avoided or reduced at Mercedes-Benz are compensated for by certified offsetting projects.
SOURCE: Mercedes-Benz
