Data Strategy Briefing — July 10, 2025
EU Battery Regulation carbon footprint stage two reporting by July 2025 requires governance over lifecycle data collection, evidence-backed supplier attestations, and board-level dashboards for compliance and sustainability claims.
Regulatory context and timing
The EU Battery Regulation (Regulation (EU) 2023/1542) introduces phased carbon footprint requirements for rechargeable industrial and electric vehicle batteries. By 18 February 2025, manufacturers must submit detailed carbon footprint declarations aligned with Annex VII, and from July 2025 they must ensure data readiness for stage two performance classes that inform labelling and procurement decisions. Competent authorities and notified bodies will expect governance evidence that carbon data, supplier attestations, and lifecycle assessments are accurate, auditable, and updated throughout the battery value chain. Boards overseeing battery manufacturing or import operations into the EU must demonstrate disciplined oversight of data collection, verification, and reporting workflows.
Stage two requires calculating carbon footprint values using EU Product Environmental Footprint Category Rules (PEFCR) for batteries, classifying batteries into performance tiers, and preparing for mandatory digital battery passports. Organisations must align their data management systems with European Commission guidance, including delegated acts on methodology, verification, and communication. Governance must integrate sustainability, compliance, finance, and supply chain teams to ensure that carbon footprint data is reliable and defensible against regulatory or customer scrutiny.
Governance structure and accountability
Boards should establish a cross-functional battery compliance steering committee that includes sustainability leaders, chief risk officers, product management, procurement, and data governance. The committee should have a formal charter detailing decision rights, meeting cadence, reporting obligations, and escalation triggers. Accountability matrices must map Annex VII requirements to process owners, data stewards, verification leads, and legal reviewers. Evidence packs should include updated responsibility maps, board minutes capturing challenge on data quality, and assurance plans covering internal audit, third-party verification, and certification bodies.
Risk appetite statements must reflect exposure to misreported carbon data, greenwashing claims, and supply chain non-compliance. Boards should ensure that carbon footprint targets align with corporate climate commitments, EU taxonomy disclosures, and sustainability-linked financing covenants. Governance documentation should capture how carbon footprint reporting integrates with other regulatory frameworks such as CSRD, CBAM, and the Ecodesign for Sustainable Products Regulation. Audit committees need visibility into control design, testing outcomes, and remediation progress to satisfy fiduciary duties.
Data collection, systems, and controls
Carbon footprint calculations require granular data across the battery lifecycle, including raw material extraction, precursor production, cell manufacturing, module assembly, distribution, and end-of-life processing. Organisations must implement data models that capture energy consumption, emission factors, transport modes, and process efficiencies. Governance evidence should demonstrate that data sources are identified, validated, and mapped to PEFCR requirements. Data lineage documentation must show how values flow from suppliers through enterprise resource planning (ERP) systems into lifecycle assessment (LCA) tools and reporting dashboards.
Data controls should include automated validation rules, exception handling procedures, and segregation of duties between data providers, reviewers, and approvers. Organisations should maintain a data quality dashboard covering completeness, accuracy, timeliness, and consistency metrics. Boards need assurance that data issues are tracked, prioritised, and resolved, with evidence stored in issue logs and remedial action trackers. Where manual data collection is unavoidable, governance packs must include sampling strategies, spot-check results, and training records for personnel performing measurements.
Supplier engagement and evidence packs
Battery manufacturers rely heavily on supplier data for materials such as lithium, nickel, cobalt, graphite, and cathode precursors. Supplier governance frameworks must enforce contractual obligations to provide carbon footprint data aligned with EU requirements. Organisations should maintain supplier segmentation models categorising suppliers by criticality, risk, and data maturity. Evidence packs should include due diligence questionnaires, sustainability scorecards, audit reports, and corrective action plans. Procurement teams must track supplier commitments, response times, and data quality ratings.
Contracts should specify data submission formats, verification rights, and penalties for non-compliance. Organisations may require suppliers to adopt recognised calculation tools, share third-party assurance reports, or participate in shared data platforms. Boards should review dashboards summarising supplier data coverage, outstanding gaps, and escalation status. When suppliers cannot provide compliant data, organisations must document alternative estimation methods, risk assessments, and mitigation actions such as sourcing diversification or investment in supplier capability building.
Lifecycle assessment methodology and verification
Annex VII mandates using the Commission’s PEFCR methodology. Governance documentation must include approved calculation methodologies, emission factor libraries, and updates triggered by delegated acts. Organisations should maintain version-controlled methodological guides, training materials, and calculation templates. Evidence should show internal technical reviews, sign-offs from sustainability experts, and integration with digital tools. LCA models must be documented with assumptions, system boundaries, data sources, and sensitivity analyses.
Third-party verification is required to confirm the accuracy of carbon footprint declarations. Organisations must engage accredited verifiers, provide them with evidence rooms, and respond to findings. Boards should review verification plans, scope documents, engagement letters, and timelines. After each verification, management must track nonconformities, corrective actions, and residual risks. Internal audit may perform thematic reviews to assess control effectiveness and readiness for notified body assessments.
Battery passport preparation and digital infrastructure
From February 2027, digital battery passports become mandatory, but stage two data requirements demand early infrastructure investment. Organisations should develop digital architectures that integrate carbon footprint data with serialised battery identifiers, QR codes, and EU-compliant data exchange protocols. Governance packs must detail system architecture diagrams, data security controls, access rights, and backup strategies. Boards need assurance that cybersecurity and privacy requirements are addressed, particularly when sharing data with vehicle manufacturers, recycling partners, and regulators.
Project plans should outline milestones for passport platform development, interoperability testing, and stakeholder onboarding. Evidence should include vendor due diligence, service-level agreements, penetration test results, and data protection impact assessments. Organisations must also plan for customer and regulator portal access, ensuring user management and incident response processes are documented.
Reporting workflows and communication
Carbon footprint reporting requires coordinated workflows spanning data collection, calculation, review, approval, and submission. Organisations should implement reporting calendars, task assignments, and workflow tools that track status and dependencies. Governance documentation must capture approval hierarchies, sign-off records, and evidence of management review. Boards should receive periodic reports summarising carbon footprint values by product line, performance class distribution, variance against targets, and issues encountered.
Communication plans should cover external disclosures (e.g., product labels, sustainability reports, customer briefings) and internal updates to leadership and operational teams. Evidence packs must include messaging templates, FAQs, training materials for sales and customer service teams, and escalation paths for challenging customer queries. Organisations should rehearse responses to regulator audits or media inquiries, documenting roles, scripts, and supporting data.
Risk management and assurance
Carbon footprint compliance introduces operational, reputational, and legal risks. Risk registers must capture scenarios such as inaccurate data, supplier non-compliance, technology failures, or fraudulent reporting. Each risk should have assessed likelihood, impact, control effectiveness, and mitigation plans. Boards must confirm that high-rated risks have treatment actions with deadlines and accountable owners. Stress-testing may include sensitivity analyses on emission factors, energy mix changes, or disruptions in raw material supply.
Internal audit should perform readiness assessments focusing on data governance, supplier management, methodology application, and reporting controls. Audit plans must detail scope, sampling, and evidence requirements. Reports should highlight control gaps, remediation plans, and follow-up timelines. Organisations may also commission external assurance to bolster credibility, especially when using carbon footprint data in marketing claims or sustainability-linked financing.
Training, culture, and continuous improvement
Effective compliance depends on informed staff and a culture of data integrity. Training programmes should target procurement, manufacturing, sustainability, finance, and IT teams. Evidence should include curricula, attendance logs, competency assessments, and refresher schedules. Organisations should maintain knowledge bases with guidance on data collection, supplier engagement, and reporting standards. Boards need visibility into cultural indicators such as incident reporting trends, whistleblowing activity related to data manipulation, and lessons learned from audits.
Continuous improvement mechanisms must capture feedback from verifiers, regulators, customers, and internal stakeholders. Organisations should operate issue and improvement registers that track enhancement ideas, prioritisation, implementation status, and benefits realised. Regular post-mortems after reporting cycles should identify process bottlenecks, tooling enhancements, and opportunities to automate data collection or verification.
Integration with broader sustainability strategy
Carbon footprint compliance should feed into broader sustainability and decarbonisation initiatives. Boards should ensure that carbon data informs investment decisions, product design, and research and development priorities. Evidence should show alignment with science-based targets, life-cycle design principles, and circular economy programmes. Organisations should monitor how carbon footprint performance affects market positioning, customer requirements, and regulatory developments, including potential expansion to other battery chemistries or capacity thresholds.
By July 2025, organisations must be able to demonstrate a mature governance ecosystem that connects data collection, supplier engagement, methodology, reporting, and assurance. Comprehensive evidence packs, disciplined reporting workflows, and board-level oversight will be essential to meet EU expectations, maintain market access, and underpin credible sustainability claims.
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