Joint press release by the German Environment Agency and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

Integrating environmental protection in legislation on global supply chains

UBA study outlines how to implement corporate environmental and human rights due diligence obligations

container-loaded cargo ship at a container terminalClick to enlarge
Much of the environmental impact of German companies originates abroad.
Source: Sculpies /

How can businesses ensure protection of the environment and human rights in their global supply chains? How can the state support them in this and what guidelines are necessary? A recent study commissioned by the German Environment Agency (UBA) has the answers to these questions. In order to achieve more sustainable global supply and value chains, the study recommends a legally anchored systematic approach to early risk identification, implementation of measures and reporting by companies.

UBA President Prof. Dirk Messner said: “We in Germany must stop living at the expense of the environment in other countries. It is clear that companies have to realign their supply and value chains and include the protection of water, air and soil as well as climate and biodiversity in their planning. Environmental and reputational risks are becoming increasingly relevant to long-term success in business. The financial sector in particular is taking greater account of the hidden risks in companies' supply chains of human rights violations and environmental destruction. In this respect, it is probably also in the interest of companies to identify such risks at an early stage, make them transparent and reduce them in a targeted manner. Far less than half of the large companies currently do so. Our study shows that a duty of care that also includes environmental protection in the supply chain can be implemented both practically and legally. The current period of upheaval and restructuring is an excellent opportunity to get to the root of long-standing problems in supply chains." 

Environmental State Secretary Jochen Flasbarth said: “Human rights violations, violations of labour rights and environmental pollution usually go hand in hand. Therefore, companies' global supply chains must be aligned with the principles of sustainability. Many companies which have production sites abroad already operate with due care, i.e. in compliance with social, labour and environmental standards. In addition, all large companies already have established management systems that enable them to monitor supply chains, their resistance to crises and the quality of their products. Nevertheless, excessive pollution still occurs throughout the entire production process. That is why we are committed to enshrining the protection of the environment and human rights in a new supply chain law and supporting companies in its implementation.“ 

The study resulting from the research project, entitled Environmental and human rights due diligence as a means to strengthen sustainable business conduct (in German), provides proposals on what the state, associations, international organisations and businesses can do to improve implementation of due diligence obligations in supply and value chains. One recommendation is to enshrine environmental protection in the Business and Human Rights National Action Plan (NAP). Sectoral and multi-stakeholder initiatives should and often do address human rights violations and environmental degradation together, as in practice there is a close link between these issues. For companies, this means that human rights and environmental protection in the supply chain are not considered as distinct areas but rather as one and the same. Costs and effort can also be saved if existing structures such as an environmental management system are also used to implement due diligence obligations.

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