Innovative Tools for Environmental and Sustainability Management in the Value Chain
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 industry studies are dedicated to the German automotive industry. The studies:
Provide 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;
Analyse in detail the risks associated with the manufacture of selected vehicle components and stages of the value chain for negative environmental impacts;
Show examples of the connections that can exist between (potential) negative environmental and human rights impacts; and
Show approaches and example measures and provide information about further industry activities and initiatives.
Example: The automotive industry
Environmental risks and impacts in global supply chains of German companies – automotive industry study
With revenues of almost EUR 378 billion in 2020, the automotive industry is the industrial sector with the highest turnover in Germany. The value chain of the German automotive sector is highly internationalised and differentiated. The transition towards alternative drive technologies (and the digital transformation) will have a significant impact on the value chains and is already having an effect on sub-areas, such as the procurement of materials. Raw materials, which previously played a comparatively minor role, are becoming increasingly important. The focus is, for example, on raw materials such as lithium and cobalt, which play a key role in the manufacture of batteries for electric cars.
The industry study covers numerous environmental issues in the German automotive industry:
Abiotic and biotic resources
Based on the results of the analysis, selected approaches and measures are 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 will follow over the next two years. These will also be published here. Each study will contain industry-specific proposals for environmental and sustainability management. In addition, instruments are being developed to help companies adapt their environmental and sustainability management to the concept of due diligence.