Sustainable supply chain management, step by step

Best practice guide helps companies strengthen sustainability and transparency in supply chains

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Sustainable supply chain management, step by step
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The major environmental impact of businesses' operations often do not occur at their own sites but instead along what are sometimes fragmented supply chains. Companies are therefore now putting more focus on the ecological and social impacts of their supply chain, either on their own initiative or because customers, investors and other stakeholder groups are demanding more sustainability. A new best practice guide from the Federal Ministry for Environment offers support and targets small and medium sized enterprises (SMEs) in particular. One piece of best practice advice: Companies should build on existing structures and processes and gradually integrate the requirements of sustainable supply chain management into their operations.

Maria Krautzberger, President of the German Environment Agency, said: "In light of the partly severe environmental problems and human rights violations which exist, we must take joint action for more transparency and sustainability in global supply chains. As globalisation increases, it is becoming more and more important for companies to look beyond their factory gates and to assume responsibility for their supply chains." 

As of the 2017 fiscal year, large listed companies and other publicly traded businesses are expected to meet specific requirements concerning their supply and value added chains. The reason for the new regulations on sustainability reporting by companies is associated with the transposing act of the European CSR Directive. It indirectly affects SMEs, too, to the extent that they are suppliers of the large companies. In general terms, sustainability aspects of supply chains are becoming increasingly relevant to business operations. Actual implementation, however, poses great challenges to companies, for example because of complex supply relationships, poor availability of data or few means to influence suppliers. This is why it is important that available resources are applied to gain the maximum benefit for the companies themselves, mankind and the environment. 

The guide by the Federal Ministry for Environment and the German Environment Agency offers companies advice on how to integrate sustainability into their supply chains. It explains step by step and with the aid of practical examples how companies can create transparency in their supply chains; identify, assess and prioritize risks and opportunities; establish business relationships with suppliers, and report on these efforts. Experienced corporate representatives weighed in with their expertise and provide advice on sustainable supply chain management in the framework of workshops, interviews and case studies. In several instances, these companies were able to build upon environmental management systems which have been in place for years. 

The publications can be ordered from the Federal Government Publication Office (send e-mail to Publikationen [at] bundesregierung [dot] de) or downloaded from the websites of the Federal Ministry for the Environment and the German Environment Agency. 



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