KMU Kompass: A Sustainable Supply Chain Management Compass for SMEs

The United Nations Guiding Principles for Business and Human Rights (2011) provide that, in addition to the state duty to protect human rights, companies also have an obligation to respect human rights and take them into account in their business practices. Because they are so economically important and play a central role in society, businesses have a unique responsibility to understand human rights risks along their supply chain and initiate corporate processes to prevent or reduce these risks or remedy damage that has already occurred.

The requirement to understand and manage risks along the entire supply chain poses particular challenges for small and medium-sized enterprises (SMEs): often, they do not have the same leverage as large companies on their suppliers and therefore have to communicate with them differently in order to address and implement the topic of sustainable supply chain management. These and other challenges are addressed in the ‘KMU Kompass’ (SME Compass), an online tool for sustainable supply chain management developed specifically for SMEs.

adelphi developed the SME Compass on behalf of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to help SMEs get started with sustainable supply chain management. The SME Compass is based on the five core elements of human rights due diligence, which are anchored in the National Action Plan on Business and Human Rights 2016–2020 (NAP). It identifies five central process steps for sustainable supply chain management: (1) develop strategy; (2) perform risk analysis; (3) take action; (4) measure and report; (5) manage grievances.

The SME Compass explicitly relates sustainability to human rights and environmental issues. In this way, the project goes beyond the requirements of the NAP and shows companies to what extent human rights and environmental risks can be considered together. The innovative tool offers users concrete, step-by-step instructions on how to understand both human rights and environmental risks and how to implement corporate responsibility within the framework of an integrative sustainability approach. adelphi designed not only the tool itself but also the website and compiled the instructions as well as practical guidelines for users.