EU due diligence law: Companies want rules
Unofficial summary translation by Business & Human Rights Resource Centre of the German original
Shipping companies worth billions, a large German supermarket, a furniture giant, a pharmaceutical company, medium-sized clothing manufacturers from southern Germany - they all want politicians to regulate their supply chains: with a strong EU supply chain law.
That is remarkable. At the moment, it seems as if the entire business community in Germany is up in arms against the law, which is intended to create standardised rules for the protection of human rights in the supply chains of larger companies...
The law has been finalised and only needs to be formally passed in February. However, the FDP is standing in the way at the last minute, flanked by the loud voices of German associations.
But if you ask around with companies, you get a much more differentiated picture. "Mittelständler" and large corporations in Germany and Europe are in favour of a strong law. The shipping companies Maersk and Hapag-Lloyd, for example, the consumer goods giant Unilever, the furniture giant IKEA, the discounter Aldi Süd, the mail order company Hess Natur, the clothing company S.Oliver and the outdoor manufacturer Vaude. In Denmark and the Netherlands, major trade associations have expressly welcomed a strong supply chain law - in stark contrast to their German counterparts...
Obviously, the associations do not speak for all companies.
Surveys show that companies in Germany have long since adapted to the supply chain laws. The management consultancy Inverto recently surveyed over 600 managers of large German and French companies for a study. According to the study, the majority of companies are already planning to introduce a European supply chain law. Three quarters of those surveyed even expect a standardised EU directive to generate additional revenue...
Take Aldi Süd, for example. The discounter wrote in response to an enquiry that it welcomed the agreement. It creates a "level playing field", i.e. equal conditions for all competitors... The clothing company s.Oliver argues similarly...
"It is important that Germany agrees to this EU directive [...] now," writes Johanna von Stechow, Head of Corporate Responsibility [at Tchibo, known for coffee and consumer goods,] on LinkedIn. Her colleague Frederike Boll, Human Rights Manager, adds: "I am appalled by the actions of the FDP and hope that the rest of the German government will remain stable and vote in favour of the European Supply Chain Act." ...
The "Responsible Business Alliance", an association of 230 international companies, has recently contacted the Federal Chancellor again to express its appreciation for the law. The business alliance includes companies such as BMW, Airbus and Amazon.
Antje von Dewitz, Managing Director of outdoor manufacturer Vaude from Baden-Württemberg, has even written an open letter to the Federal Chancellor asking him to approve the law. It says: "It is possible to take responsibility in the supply chain and be economically successful at the same time."
See also: A study among over 600 managing directors, managers and board members of German and French companies with more than 500 employees on the planned EU regulations found that the majority of companies have long been planning to comply with the law. 78 per cent considered the requirements to be "achievable", and felt they were "well positioned" to implement them. Three quarters of those surveyed even expect a "return on investment", i.e. additional revenue or new business, from a standardised EU directive. More information in German in SPIEGEL (also mentioning Tchibo, Ritter Sport, L'Oréal, BMW, Aldi, Hapag-Lloyd, Scania, IKEA), 26 January 2024.
Further reading in German
Five myths and facts about the EU due diligence directive, Handelsblatt, 26 January 2024
EU supply chain law brings companies additional revenue, Wallstreet Online, 26 January 2024
Entrepreneur contradicts FDP and associations, Tagesspiegel, 24 January 2024
Letter to political leaders: Requesting approval for the EU supply chain directive, B.A.U.M. Network for Sustainable Business, 29 January 2024
The CSDDD is an opportunity for business!, German Sustainable Business Association (BNW), 30 January 2024
Why smart regulation can create efficient and sustainable supply chains, op-ed by SAP Board Member Thomas Saueressig & lawyer Anahita Thoms, Handelsblatt, 15 January 2024
Letter to German Chancellor, 23+ companies from the textile, travel and food industries (incl. VAUDE, S.Oliver, Tchibo, KiK), December 2023
For past business support for mandatory due diligence regulation, see this overview, which is part of our Mandatory Due Diligence portal.