Rivian Faces Tough Questions It Doesn't Want To Answer

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And it's happening at a very inconvenient time.

Things are moving ahead quickly for Rivian. Late last summer, the EV automaker backed by Ford and Amazon revealed plans to go public in a traditional IPO instead of a SPAC. Some analysts pegged the carmaker's value as high as $80 billion. However, the paperwork it filed with the Securities and Exchange Commission revealed a nearly $1 billion loss in the first half of this year. In 2020, Rivian suffered a $1.02 billion net loss. The good news is that production of the Rivian R1T is underway and the truck is absolutely incredible. It is the segment breakthrough we've been waiting for. But there's now another issue Rivian must contend with ahead of its big day on the NASDAQ.

Reuters reports that a union-affiliated pension fund advisor called SOC Investment Group wants answers from Rivian regarding potentially embarrassing yet extremely important subject matters: human rights and environmental concerns.

2022 Rivian R1T Truck Frontal Aspect Rivian
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SOC sent a letter this past week to a Rivian board member requesting for it to "commit to a rigorous human rights assessment of Rivian and its value chain" before finalizing its IPO with regulators. "Failure to address potential human rights abuses and environmental harms associated with the battery life cycle exposes Rivian to significant regulatory, litigation and reputational risks," wrote Dieter Waizeneggar, SOC's executive director. It requests a response from Rivian by November 3. "The (battery) supply chain and production is rife with human rights risks," he said.

The bottom line is that SOC wants Rivian to commit to and enact policies starting now to identify and prevent human rights abuses and be transparent about its supply chain.

2022 Rivian R1T Truck Driver Area Rivian
2022 Rivian R1T Truck Climate Control Rivian
2022 Rivian R1T Truck Charging Point Rivian

Tesla, for example, wants to end the use of cobalt from its batteries due to known child labor and terrible safety conditions at mines in the Democratic Republic of Congo. SOC also wants Rivian to publicly support a ban on deep-seabed mining and not buy minerals extracted from the seabed. A board committee with oversight power for these issues needs to happen as well. These are obviously delicate subjects for Rivian who commented that it's "committed to responsible environmental, social, and governance practices and that includes thorough reporting and disclosure."

That's not good enough for SOC and it has the power to get more concrete answers. The union pension funds it advises on have over $250 billion in assets. This activist approach is not unheard of these days, and now it's up to Rivian to respond quickly.

2022 Rivian R1T Truck Table Rivian
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2022 Rivian R1T Truck Trunk Floor Storage Rivian
Source Credits: Reuters

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