Due diligence: Human rights and environmental protection in companies and supply chains

The law on corporate due diligence in supply chains came into effect on 1 January 2023. The Supply Chain Due Diligence Act serves to improve international human rights. To this end, the law defines requirements for the responsible management of supply chains for certain companies.

However, the concept of “corporate due diligence” goes further: it takes into account corporate impacts on human rights and the environment. The project provides information on environmental risks in supply chains in selected sectors of the German economy.

Why companies should consider environmental protection and human rights together 

The protection of the environment and human rights overlap at numerous points. For this reason, companies can only benefit if they develop processes in which both risks are considered together. 

This project aims to help companies move towards this kind of integrated management system.

Integrated management systems for environmental and human rights due diligence

The project “Innovative tools for environmental and sustainability management in the value chain” examined the actual and potential negative environmental impacts that (could) occur in companies' global supply chains for selected sectors of the German economy. The first of a total of seven industry studies was dedicated to the German automotive industry. The industry study:

• Provides an overview of the risks of negative environmental impacts at the individual stages of the upstream international value chain for the German automotive industry and describe actual negative impacts;
• Analyses in detail the risks associated with the manufacture of selected vehicle components and stages of the value chain for negative environmental impacts; 
• Shows examples of the connections that can exist between (potential) negative environmental and human rights impacts; and
• Shows approaches and example measures and provide information about further industry activities and initiatives. 

The study on the German automotive industry and the other industry studies are intended to support companies in systematically analyzing and evaluating their supply chain.

The industry study covers numerous environmental issues in the German automotive industry:

• Greenhouse gases
• Water
• Land
• Abiotic and biotic resources
• Air pollution
• Water pollution
• Waste

Based on the results of the analysis, selected approaches and measures were proposed in ten profiles. Companies can use these to eliminate, avoid or mitigate negative environmental impacts in the supply chain. In addition, they can be part of coherent due diligence management and can be used for certification, cooperation or reporting.

Proposals and instruments for environmental and human rights due diligence for other sectors

Additional industry reports followed for the mechanical engineering sector, the electronics industry, the chemical-pharmaceutical industry, the food processing industry, the construction sector and the metal producing and processing industry. Each study contains industry-specific suggestions for environmental and sustainability management. In addition, tools were developed for companies to help them adapt their environmental and sustainability management to the concept of due diligence.

In addition, webinars were created for each study, which briefly summarize the most important contents. The first webinar provides an introduction to the topic of sustainable supply chain management and shows how the industry studies can help companies with this. The following webinars focus on the content of the individual industry studies.