When the new German Supply Chain Due Diligence Act (Lieferkettengesetz – LkSG) comes into force in January, companies will become subject to stricter obligations in relation to human rights and environmental protection. This will pose a challenge – whilst also presenting an opportunity for companies to position themselves as attractive, future-proof employers. This insight was uncovered by IT service provider and consulting company Lufthansa Industry Solutions in a survey of 1,075 employees.
Norderstedt, October 20, 2022 – Many companies in Germany are facing a shortage of skilled employees, with experts estimating the current number of vacancies at around 500,000. “Competition for the top talent has increased significantly in recent years,” said Joachim Wolf, Business Director Industry at Lufthansa Industry Solutions. “Employees are increasingly scrutinizing the conditions through which products and services are delivered.” A clear majority of respondents value a sustainable workplace: 71% said they would look for a new employer in the short to medium term if their current employer violated human rights or environmental standards, while 61% said that having an employer that systematically complies with social and environmental standards is more important than securing the highest possible salary.
Compliance with sustainability standards also makes commercial sense
“Career entrants and seasoned professionals alike find sustainable business an important characteristic in an attractive employer,” summarized Wolf. “This is not only about keeping a clear conscience but also about their employer’s commercial prospects.” Nine out of ten respondents to the study believe that complying with sustainability standards makes good commercial sense in the medium to long term.
“The new Supply Chain Due Diligence Act therefore offers companies the opportunity to modernize their supplier management processes while simultaneously drawing positive attention from talented professionals,” said Thomas Nock, Business Director Logistics at Lufthansa Industry Solutions. However, the clock is ticking. From January 2023, the German Supply Chain Due Diligence Act will obligate companies with over 3,000 employees to respect human rights and environmental protection throughout international supply chains and document their activities. “One year later, this obligation will extend to companies with 1,000 employees,” added Nock. “The German federal government also supports the proposed EU Due Diligence Directive with soon-to-be even more far-reaching regulations.”
Blueprint in a white paper: From the Supply Chain Due Diligence Act to supplier management
In light of these legislative changes, companies can no longer afford to delay in addressing this topic. Instead, if they are to fulfill their due diligence obligations, they must swiftly introduce adequate risk management systems to identify potential weaknesses, implement preventive measures and take remedial action if necessary. A white paper entitled “Transparency, security, efficiency – from the Supply Chain Due Diligence Act to supplier management” sets out how companies can promptly meet statutory requirements and seize opportunities in relation to supplier management. The white paper is available to download free of charge.
