Supply chain sustainability – small and medium enterprises

Many smaller and medium-sized companies, like larger companies, are already engaging with social responsibility in their business practices.

At the same time, they are being asked to live up to their social reponsibilities when it comes to their supply chains and are motivated to do so, as supply chains are the origin of a large share of environmental impacts.

Supply chains also hold great potential for and provide opportunities to avoid or at least decrease considerable risks to the environment, those impacted, and the companies themselves. The catastrophic impact of suppliers’ insufficient security and occupational health and safety standards, as the collapse of the Rana Plaza building in Bangladesh revealed, shows how important and urgent it is for companies to address the social impact of their activities within their supply chains as well.

Growing expectations for companies to recognise their social responsibilities, including those related to their supply chains, are above all the result of closer relationships between companies and suppliers due to globalisation. Therefore, the United Nations (UN) has addressed the topic in its 2030 Agenda, as have the Group of Twenty (G20) and Group of Seven (G7) states. With the implementation of the European Directive on nonfinancial reporting (2014/95/EU), the “National Action Plan for Business and Human Rights” and the CSR Forum, the German Federal Government has set standards on the national level for businesses to be socially responsible.

Given the pressure of global challenges and goals, such as decarbonisation of the global economy, an expansion of the European Union (EU) political and legal framework can be expected in the medium term. Proactive sustainability management geared towards managing long-term risks and opportunities means both following laws currently in force and anticipating and preparing for future regulations.

This publication is geared towards small and medium-sized companies that have already built a solid foundation of environmental and/or sustainable practices in their factories and offices and now want to take their first steps towards sustainable supply chain management. It provides support for the development of more sustainable supply chains. For those companies that have already introduced an Environmental Management System (EMS) in accordance with EMAS (Eco-Management and Audit Scheme) or ISO (International Organization for Standardization) 14001, this practical guide provides starting points for the management of indirect environmental aspects and analysing the life cycle of products and services.

This course outlines:

1. The advantages of sustainable supply chain management for companies, and how they can respond to the challenges of supply chain development.
2. The relevant topics (including the environment, human rights, and working conditions) essential to sustainable supply chain management for all industries.
3. How a company decides which topics are essential for its own business by using a processed-based approach to introduce the basic steps and approaches to designing and optimising supply chains for sustainability.
4. How a company can capture and display its entire supply chain, how it can identify additional challenges to sustainability, and assess and prioritise these challenges by means of a materiality analysis. It also lays out how to derive goals and measures for individual company levels and how to adequately align internal structures and processes. Companies can also learn how to formulate their requirements for their suppliers and which instruments they can use for monitoring to build relationships based on trust.
5. The process to reporting progress in the introduction of sustainable supply chain management.