CATL ESG Report 2025: How the World's Largest Battery Manufacturer Is Navigating Climate, Supply Chain and Sustainability Challenges

Contemporary Amperex Technology Co., Limited, better known as CATL, released its 2025 Environmental, Social and Governance Report covering the period from 1 January to 31 December 2025. The report covers CATL and its subsidiaries and is aligned with the scope of the company’s consolidated financial statements. It is CATL’s fifth ESG report and follows its dual listing status, with stock codes 300750.SZ and 03750.HK.

The report is prepared in accordance with Shenzhen Stock Exchange sustainability disclosure requirements and the HKEX ESG Reporting Code, while also referencing China Corporate Sustainability Disclosure Standards, IFRS S1, IFRS S2, GRI Standards, the UN Sustainable Development Goals, and mainstream ESG rating concerns. This makes the report relevant not only for domestic Chinese compliance, but also for global investors, customers, regulators, and downstream automotive and energy storage clients.

CATL operates in a sector where sustainability is central to both opportunity and risk. Batteries are critical to electrification, renewable energy integration, and industrial decarbonisation, but the battery value chain is also exposed to ESG scrutiny around energy use, critical minerals, supply chain due diligence, product safety, labour practices, recycling, and carbon footprint transparency.

Governance Architecture and Accountability

CATL’s sustainability governance is led by the Board of Directors, which regularly reviews ESG-related work, including ESG impacts, risks, opportunities, targets, and progress. The Board has established a Corporate Sustainability Management Committee, supported by a Corporate Sustainability Management Council and a permanent ESG Office responsible for daily coordination and oversight.

The report indicates that ESG officers have been appointed within first-tier departments and major domestic and overseas subsidiaries. This is important for a global manufacturing group because ESG implementation depends on consistent execution across R&D, procurement, manufacturing, safety, compliance, quality, recycling, and overseas operations.

A notable governance development is the integration of ESG performance and target progress into the annual appraisal system for the Group and relevant departments. The linkage between ESG performance, compensation incentives, and departmental accountability suggests a maturing approach that moves beyond disclosure into management execution.

Materiality Approach and Risk Prioritisation

CATL applies a double materiality approach, conducting a comprehensive assessment every two years and reviewing topics dynamically in interim years. In 2025, the company updated its material topic analysis based on the 2024 double materiality assessment, regulatory developments, business changes, industry practices, and stakeholder expectations.

The company identified 30 material topics across governance, environment, society, and operations. Nine topics were identified as both financially material and impact material, including climate actions, circular economy, R&D innovation, intelligent manufacturing, product quality and safety, supply chain management, talent training and development, workplace safety and occupational health, and risk management and internal control.

This materiality outcome is closely aligned with CATL’s business model. For a battery manufacturer, ESG issues such as carbon emissions, recycling, product safety, supplier performance, and occupational health are not peripheral topics; they are directly linked to customer confidence, regulatory readiness, production continuity, and long-term competitiveness.

Climate, Supply Chain, and Social Dimensions

The most significant environmental disclosure is CATL’s achievement of carbon neutrality in core operations in 2025. The company states that all core operational battery bases achieved carbon neutrality and obtained certifications, with third-party institutions engaged to verify core operational carbon emissions, decarbonisation performance, and energy use in accordance with ISO 14068-1.

CATL also reported that the share of zero-carbon electricity used in core operations reached 100% in 2025. Since 2023, its core battery manufacturing plants have consumed more than 18 billion kWh of zero-carbon electricity, and the company states that this transition eliminated carbon emissions from electricity use in production and operations.

The report provides a measurable performance trend. Between 2022 and 2025, energy consumption intensity per unit product at battery production bases decreased by 28%, while carbon emission intensity per unit product decreased by approximately 77%. This is a meaningful indicator because battery customers increasingly evaluate suppliers not only on performance and cost, but also on product-level carbon intensity and value-chain decarbonisation support.

Supply chain decarbonisation remains the next major challenge. CATL acknowledges that supply chain emissions are estimated to be more than five times those of core operations and involve hundreds of direct raw material suppliers, nearly 70 raw material categories, upstream mineral extraction, and downstream recycling. This shows a realistic understanding that value chain carbon neutrality by 2035 cannot be achieved through internal operations alone.

Employment

CATL positions talent as a strategic enabler of innovation and manufacturing competitiveness. The report states that the company has six global R&D centres and approximately 23,000 R&D personnel, supporting continued commercialisation of battery technologies including sodium-ion batteries, ultra-fast charging systems, and dual-core battery architecture.

Talent training and development is identified as both financially material and impact material. This reflects the reality that battery technology competition depends heavily on engineering capabilities, production know-how, quality management, and the ability to scale advanced manufacturing processes globally.

The report also includes employees’ rights and benefits, equality and diversity, and talent development within its social disclosures. As CATL expands internationally, workforce governance is likely to become more important, particularly in relation to local employment practices, talent localisation, industrial relations, and consistent global labour standards.

Health and Safety

Workplace safety and occupational health is one of CATL’s highly material topics. This is appropriate given the operational profile of battery manufacturing, which involves chemical materials, high-energy products, automation equipment, production safety controls, and environmental health requirements.

The company states that workplace safety and occupational health risks may affect employees and suppliers if inadequately managed. It also links safety management to business risks such as reduced production capacity, order defaults, accident-related compensation, and direct economic losses.

This framing is important because safety is treated not only as a compliance matter but also as a business continuity and value chain risk. Future reporting could be strengthened by providing more comparable indicators, such as lost-time injury rate, total recordable injury rate, contractor safety data, near-miss reporting, and occupational disease prevention outcomes.

Product or Service Responsibility

Product quality and safety is central to CATL’s ESG profile. Batteries are safety-critical components used in electric vehicles, energy storage systems, data centres, vessels, aircraft, and industrial applications. Any major product quality or safety issue could affect customers, end-users, business continuity, litigation exposure, and market trust.

CATL’s report emphasises full-lifecycle quality management supported by digitalisation, intelligent manufacturing, and customer feedback mechanisms. The company also highlights its broader product matrix, including power batteries, energy storage batteries, battery swapping solutions, and zero-carbon ecosystem solutions.

The report suggests that product responsibility is increasingly tied to lifecycle performance. In the battery sector, stakeholders are likely to focus not only on product safety, but also on durability, carbon footprint, recyclability, traceability, after-sales service, and end-of-life recovery.

Philanthropy

CATL’s social contribution approach includes charity and volunteer services, community communication and development, and rural revitalisation. These areas appear in the company’s social disclosures and are connected to its broader sustainable development philosophy.

The report’s framing suggests that CATL aims to align community impact with industrial and low-carbon development. This can be more strategically meaningful than traditional philanthropy where community initiatives support education, rural development, green transition, and local resilience.

For stronger impact assessment, future reports could provide more quantified data on community investment, volunteer hours, number of beneficiaries, project duration, and independently evaluated outcomes. This would help stakeholders distinguish between activity volume and long-term social value creation.

Metrics, Targets, and Data Robustness

CATL’s 2025 report provides several important quantitative indicators. These include 100% zero-carbon electricity in core operations, carbon neutrality certification for all core operational battery bases, more than 18 billion kWh of cumulative zero-carbon electricity consumption since the launch of the zero-carbon strategy, a 28% reduction in energy intensity per unit product from 2022, and an approximately 77% reduction in carbon emission intensity per unit product over the same period.

The report also discloses corporate development data, including operating revenue of RMB423.70183 billion, net profit of RMB76.7863 billion, battery system production volume of 748 GWh, and 96.9% capacity utilisation. These figures provide useful context for understanding the scale at which CATL is attempting to manage sustainability impacts.

Data robustness is supported by the company’s self-developed carbon management system and ESG information systems. CATL states that it used its energy management system and CATL Carbon Chain Management System to account for nearly 20 types of emission sources in core operations. This suggests that digital ESG data infrastructure is becoming a key component of its sustainability management.

Assurance, Credibility, and Comparability

CATL states that third-party institutions conducted independent accounting and verification of core operational carbon emissions, decarbonisation performance, and energy usage in accordance with ISO 14068-1. This is a significant credibility signal because carbon neutrality claims are subject to increasing scrutiny globally.

The report also reflects broader alignment with international frameworks, including IFRS S1, IFRS S2, GRI Standards, HKEX ESG Reporting Code, and Chinese sustainability disclosure standards. This dual alignment is important because CATL serves global customers and operates across multiple jurisdictions.

Comparability will become increasingly important for battery manufacturers. Customers, investors, and regulators may expect more standardised product carbon footprint data, supplier due diligence disclosures, recycling efficiency metrics, and value-chain emissions progress. CATL’s current disclosures are directionally strong, but future credibility will depend on deeper transparency across upstream materials and Scope 3 emissions.

Strategic Implications for the Sector

CATL’s report reflects a major shift in the battery industry: sustainability is becoming a core component of industrial competitiveness. Low-carbon manufacturing, circular economy, material security, product safety, and supply chain due diligence are increasingly linked to customer access and regulatory readiness.

The achievement of operational carbon neutrality may raise expectations for other battery manufacturers, especially as automakers and energy storage customers work to reduce Scope 3 emissions. Battery suppliers that can provide lower-carbon products, reliable traceability, and credible recycling pathways may gain an advantage in markets facing tighter climate and supply chain regulations.

The next competitive frontier will likely move from operational decarbonisation to value-chain decarbonisation. CATL’s acknowledgement that supply chain emissions are more than five times those of core operations demonstrates the scale of the challenge and the importance of supplier engagement, raw material traceability, recycling, and collaborative decarbonisation.

ESG Maturity and Future Positioning

CATL’s ESG maturity appears strongest in climate strategy, carbon management systems, product innovation, circular economy, intelligent manufacturing, and ESG governance. The achievement of carbon neutrality in core operations provides a clear milestone and strengthens its positioning as a low-carbon battery manufacturer.

However, the company’s future ESG positioning will depend on whether it can extend operational progress across the full value chain. The 2035 value chain carbon neutrality target is ambitious and will require supplier transformation, mineral traceability, recycling expansion, low-carbon logistics, and more transparent emissions data.

For investors and customers, the key question is no longer whether CATL can manage internal decarbonisation, but whether it can influence the broader battery ecosystem. Its ability to provide assured, comparable, and product-level ESG data may become increasingly important as global battery regulation, customer procurement standards, and sustainability-linked financing expectations evolve.

Pacifica ESG View

CATL’s 2025 ESG Report marks an important transition from commitment to execution, with the company reporting carbon neutrality across core operations and 100% zero-carbon electricity use in core operations. The strongest signals are its carbon management infrastructure, double materiality approach, supply chain risk recognition, and value chain carbon neutrality ambition. Stakeholders should monitor progress on Scope 3 emissions, supplier decarbonisation, material traceability, recycling scale, and product-level carbon footprint transparency.

Implications for the Wider Market

CATL’s disclosures show that battery-sector ESG leadership is increasingly defined by operational proof, not only targets. As electric vehicles, energy storage, and industrial electrification expand, battery manufacturers will face stronger expectations on carbon intensity, responsible sourcing, recycling, safety, and assurance. The wider market may increasingly differentiate suppliers based on verified low-carbon manufacturing, value-chain transparency, and their ability to support customers’ Scope 3 decarbonisation strategies.

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