Risk-based due diligence in supply chains: The case of silver for photovoltaics
Estelle Gervais, René Kleijn, Sebastian Nold, Ester van der Voet
Abstract
Supply concentration and environmental, social, governance (ESG) issues constitute important supply risks. With strategic autonomy and responsible sourcing high on the political agenda these risks are especially relevant for the EU. This paper proposes an approach to conduct risk-based due diligence. Using a trade-linked material flow analysis, ESG and dependency hotspots along supply chains can be identified. Silver supply chains for photovoltaics (PV) are taken as case-study. The model traces silver from mining to PV module manufacturing, from 1995 to 2021. The supply of silver powder, paste, PV cells, and modules is found to be highly concentrated. These supply chains are linked to substantial ESG risks, mostly nested in fabrication and manufacturing, some of which have worsened over time. Over 87% of the silver used in PV transits through at least one country with a very high risk factor. Reshoring the PV industry to the EU can partially de-risk supply.