Ms von Dewitz, the EU member states are voting on the supply chain directive today. Germany will probably abstain. Is that correct?No. Germany should agree. I would be happy if a turning point were heralded and responsibility was taken in supply chains across Europe. A national supply chain law has been in force in Germany since 2021. In two surveys conducted by the federal government at the time among several thousand companies, it emerged that only a small proportion of them were even involved in the issue of supply chains. You often hear that German companies take on so much responsibility anyway, but studies show otherwise. There is a lack of self-commitment. That’s why the EU supply chain law is so useful and important.
The supply chain law requires the textile industry to report if it has 250 employees or more. Vaude falls into this area. What would the EU directive actually mean for you and your company? There wouldn’t be any major changes for us, because we have been implementing the measures required by the supply chain directive at Vaude for 15 years. We control our global carbon footprint and work to reduce our global emissions. We try to ensure this in our 45 partner companies that produce for us, as well as our 150 material suppliers. They are predominantly in Asia.
The new rules would not make our processes more complex – we have already created the structure for this. For example, we have been certified according to the European EMAS environmental management system since 2008, as part of which we carry out an annual climate balance and continue to reduce our emissions at the site. We have also been working with Fair Wear, an independent international organization, since 2010 to improve working conditions in the global text industry.
But wouldn’t it be easier if you could waive this reporting requirement? It is not a solution to forego risk analyzes or not to report what you are doing. Sustainability management is a professional business discipline. Companies need to analyze their risks and collect data, whether that’s emissions or quality defects. Professional sustainability management cannot work without reporting requirements, otherwise my business will be flying blind.
Through the EU Supply Chain Act, suppliers from non-European countries would be measured against EU standards using different standards. Is it okay to impose our European social and environmental standards on them? From an economic perspective, a traceable supply chain is simply an aspect of the quality of the product. German customers want to be sure that products are manufactured fairly and ecologically. If suppliers don’t want to make their processes transparent, they don’t have to deliver. But fair production conditions are simply further quality requirements that must be met, in a modern understanding. The requirement to adhere to certain standards not only applies to a product itself, but also to the way it is manufactured and what effects this has.
However, standards can differ. Business is increasingly expected to solve global problems. Companies cannot duck this task. Not taking responsibility is false protectionism. That is why the EU Supply Chain Act is a huge opportunity for Germany and the EU to position themselves for the future and show that human rights and environmental protection are compatible with business.
But some companies see it differently. They warn that this could disrupt their supply chains. If it becomes known that a company uses forced labor or child labor in production, the damage to its image is huge. That’s why as a company I have to have an interest in it and know where I have something produced and how. Quite apart from the fact that no company wants to manufacture its products in violation of human rights.
Many companies also fear additional bureaucracy. Risk analysis is not rocket science. You have to set up a management system and, when violations become noticeable, you have to take action and look for solutions. Where the risks are highest, companies must act and take precautions. I have the feeling that the discussion lacks a practical look at how something like this works. More problems are conjured up and bureaucracy is conjured up than would actually arise. Some of the worries are really exaggerated.
What about the liability clause argument that Christian Lindner’s FDP puts forward against the EU Supply Chain Act? It’s similar to the warning about too much bureaucracy – a general counter-argument. Liability makes sense because without it, companies can shirk responsibility and avoid substantive work. Additionally, companies are not liable for incidents if they can demonstrate that they made efforts to avoid risks. Therefore, it is necessary to establish a proper and professional quality assurance management system.
In your experience, do customers really care that much about supply chains and base their purchases accordingly? When we at Vaude started developing and selling sustainable outdoor products 15 years ago, our efforts were welcomed. But we were also told that no customer asked about it. Under no circumstances should sustainable and fair production cost more. We are long past this point. Customers are now much more interested in where their product comes from and how it is created. Even if the supply chain law does not come into effect, the broad debate has made it clear to many customers what can go wrong in supply chains. The more companies are committed to fair supply chains, the more customers’ expectations increase. In principle, when purchasing a branded product, customers already assume that it is ecologically and fairly manufactured. And then they are shocked when they realize that this is not always the case.
But what if there is no EU supply chain directive – can companies do it themselves? Then even more companies will have to tackle this independently. Taking responsibility for your own actions may initially seem like a competitive disadvantage because processes become more complex and expensive. But that’s just a first, somewhat dramatic look. In the long term, it is worth it because companies meet the expectations of consumers and thus ensure their future relevance. In our experience, it also makes companies more innovative and successful.
This article first appeared in the business magazine “Capital”, which, like stern, is part of RTL Deutschland.
