26.10.2020

Environmental protection and human rights in global supply and value chains

Globale supply chains. Graphic: Golden Sikorka / Shutterstock

In our globalised world, products move along international supply chains that stretch around the globe. Many companies have their goods produced in places that minimise their costs. In many cases, however, the environmental protections and social safety nets there are much weaker than in Germany. The environmental impact that businesses create with their global supply chains is often several orders of magnitude higher than for their sites in Germany (source: adelphi). Environmental pollution also typically goes hand in hand with human rights violations and breaches of labour laws: what harms the environment, also endangers local people.

Political debate about supply chain legislation

What steps can companies take to protect the environment and human rights in their global supply and value chains? Although the long-term success of a business is increasingly dependent on avoiding environmental and reputational risks, industry self-regulation is often inadequate. Germany is now considering supply chain legislation that would require businesses to take effective action and ensure greater transparency.

IKI supports sustainable patterns of production and consumption

The SCP projects run by the International Climate Initiative (IKI) are helping to protect the environment and to safeguard human rights in global supply chains. With these projects, the IKI works to reduce the environmental impact directly in the countries where goods are produced. By promoting the sustainable production and consumption of products, SCP projects help to reduce environmental pollution. Certification systems, eco labelling and sustainability information systems (SIS) form a basis for informed consumer decision-making. These all help to maintain consumer trust while improving the marketing opportunities for sustainable products and creating incentives for environmentally friendly methods of production along the value chains.

Goods that are sustainably produced always have social benefits for their producers. Adherence to social standards can also be secured by the deployment of credible certification systems. Socially-aware consumers can also influence standards directly with their purchase decisions. If these certification systems are stringent enough and widely used, this can help to ensure the conservation of key ecosystems. Since 2017, all IKI projects must now undergo safeguard auditing to avoid or minimise any potentially negative consequences for human rights as a result of IKI project activities. Read more about the IKI safeguards ...

Example: Sustainability in palm oil production, public procurement and tourism

SCP projects from the IKI focus on various steps within global supply and value chains, as can be seen in the following examples.  

Sustainable business models for palm oil production

In Indonesia, guidelines and recommendations are being developed as part of the project “Establish Sustainable Consumption and Production – a South-South Transfer”. The project is also sustainable business models as well as NDC measures in the agriculture sector, with a focus on palm oil production. Indonesia is the world’s biggest palm oil producer, and manufactured 31 million tonnes of crude palm oil (CPO) in 2015. While the palm oil sector is therefore a key driver of the country’s economic growth, it’s also one of the main causes of deforestation and the harmful social consequences produced by this practice. Local businesses are being encouraged to understand the advantages of sustainable production and value chains, and to communicate these to their trading partners. The “Roundtable on Sustainable Palm Oil” quality mark is applied to palm oil.

An eco label for public procurement

The project “Promotion of Sustainable Patterns of Consumption and Production in Asia” is utilising eco labelling and the analyses of examples from best practice in public procurement to help foster demand for sustainable products while working to improve resource efficiency along the value chain. The project aims to help partner institutions by integrating climate-friendly and low-carbon criteria into the eco label. Overall, the region offers huge potential for using sustainable public procurement and eco labelling to achieve effective climate change mitigation, since the public purse is allotted very sizeable budgets. The implementation countries—Bhutan Cambodia, Laos and Myanmar—have not previously introduced eco labelling or legislation aimed at integrating sustainability criteria into public procurement.

Sustainable value chains in tourism

The “Transforming tourism value chains in developing countries and Small Island Developing States (SIDS)” project focuses on the resource-intensive parts of the tourism value chain in developing economies and small island states. The hotel and hospitality segments are two aspects being looked by this project. Achieving low-emission, resource-efficient value chains in the sector requires greater use of sustainable consumption and production practice—both by agencies and tourists, and by the destinations themselves.