Cleaning up supply chains feasible task for Germany's companies – env agency

Ensuring compliance with a possible supply chain act that makes certain social and environmental standards in production mandatory would not be asking too much from Germany's internationally active companies, the Federal Environment Agency (UBA) says based on a new study. "Our study shows that due diligence including environmental protection in supply chains can be implemented, both from a practical and from a legal point of view," said UBA head Dirk Messner. He said developments on financial markets, where sustainability screenings of investments are increasingly considered a prerequisite, showed that better management of production procedures from the beginning to the end helps improve a company's reputation and credit standing. "Therefore it should be in the companies' own interest to identify risks early, make them transparent and consistently work on removing them," Messner argued, adding that much less than half of the country's major companies currently apply such supply chain screening mechanisms. "The current period of upheaval and restructuring is a golden opportunity to tackle the problems in supply chains that have been lingering for a long time," he said.

Labour minister Hubertus Heil and economic cooperation and development minister Gerd Müller in mid-July presented plans for preparing legislation that would hold companies operating in the country to account for ensuring that social and environmental minimum standards are upheld in their supply chains and by production partners abroad. Business associations have criticised the plans, arguing that German companies already did a lot to promote better production standards internationally.