Environmental Protection and Social Justice Are Critical Factors for Employees

Need for improvement in implementing social and ecological standards

Survey results show how employers handle social and ecological standards and how employees assess the requirements of the Supply Chain Law and its economic impact on their companies. For a significant proportion of companies, social and ecological standards are already an integral part of their culture; however, 36 percent of survey respondents said that this does not apply to their company, or does so only in part. As many as 40 percent of employees are not aware of any concrete measures that their company is taking to improve social and ecological standards.

Key questions and key findings

The new Supply Chain Law requires German companies to document that their suppliers comply with all requirements regarding human rights and environmental protection. Here due diligence extends across the entire global supply chain in the form of graduated requirements. In case of violations, companies are required to become active as warranted. How do employees assess the standards in their companies? An analysis of the online survey brings the following key findings to light:

• The need for information among German companies’ employees is great: Only 36 percent of respondents were aware of the Supply Chain Law.
• Sixty-four percent of respondents stated that social and ecological standards are an integral part of the culture at their companies and that this is expressed in very deliberate socially and environmentally aware forms. However, 40 percent also stated that they are not aware of concrete measures for improving the standards.
• Just under 46 percent of employees are trained with a focus on social and ecological topics, and 66 percent of managers were said to pay attention to meeting the standards.
• Only 51 percent of respondents agreed with the question that their business partners (e.g., service providers or suppliers) must meet clear social and ecological standards.
• Seventy-one percent of German employees would look for a new job in the short to medium term, if their current employer violated human rights or environmental standards. For 61 percent of staff members, an employer who acts ethically is more important than the highest possible salary.
• The overwhelming majority of employees (80 percent) are convinced that meeting social and ecological standards also makes economic sense at least in the medium to long term, and that doing so makes a company more attractive as an employer (79 percent). Here the use of modern technologies, such as artificial intelligence and data analytics, is said to make it easier to meet the standards than was the case even a few years ago (70 percent).

Lufthansa Industry Solutions has compiled the results from the online survey in a white paper on the topic of the Supply Chain Law. The white paper also includes discussions with experts on the challenges the new law poses for companies. Their practical experiences offer many insights into how companies can not only meet the legal requirements on time, but can also seize opportunities that arise even before the Supply Chain Law takes effect in early 2023.