guest commentary

Due diligence in the supply chain pays off

Mario Micelli

Issue 92 - Fall 2021

Mario Micelli

The global trend is towards binding due diligence standards in the supply chain. These cover topics from labor and human rights to the environment and corruption. In Germany, this will take effect on January 1, 2023 Due Diligence Act in force. At the EU level, work is currently underway on the “Sustainable Corporate Governance Initiative”, which will contain binding rules for companies with regard to their due diligence along the supply chain.

With this kind of due diligence, companies should identify, prevent and mitigate actual and potential negative effects and give an account of how they counteract them. The OECD summarizes the due diligence in the supply chain in a guide with six steps. 

The advantages of taking a closer look at it are obvious: A due diligence that effectively deals with the risks of one's own business activity for human rights contributes positively to sustainable development and protects one's own company. This can prevent expensive process costs and risks and increase your own reputation. The better you know your own supply chain, the better you can react to problems.

Mario Micelli heads the Austrian National Contact Point for the OECD guidelines in the Federal Ministry for Digitization and Business Location.

Photo: BMDW

 

See also corporAID article "A closer look at the supply chain" (2021)