The German economy supports the goal of promoting decent working conditions worldwide. The joint effort of many societal stakeholders towards responsibly designed supply and value chains can significantly contribute to preventing forced and child labor as well as fostering sustainable development. However, CSR strategies and the types of company engagement vary. Demonstrated corporate responsibility drives innovation, creates competitive advantages, and strengthens company brands. Furthermore, employees, customers, suppliers, investors, politicians, and societies expect companies to responsibly shape societal changes and advocate for common principles of the rule of law.

Supply chain management, human and environmental due diligence processes, as well as the prevention of forced labor, are at the forefront of discussions. However, companies' actual abilities to influence their supply chains vary considerably depending on their size, structure, and market position. Often, there is only limited influence and minimal control possibilities regarding compliance with standards on site. Companies have little to no influence over indirect suppliers or indirect business partners with whom no contractual relationships exist and who are often unknown. From companies' perspectives, and in the spirit of a responsibility partnership, states should fulfill their duty to enforce social and environmental standards and protect human rights, even in developing and emerging countries. This governmental responsibility must neither be shifted to companies in host states nor from Europe to companies.

German Chamber of Commerce and Industry

Through the Corporate Sustainability Reporting Directive (CSRD) and taxonomy, significantly more businesses must directly report on their sustainability. However, the focus should increasingly be on timely support offerings and promoting sustainability competencies, rather than on reporting or new legislation.

The sustainability commitment of businesses does not require further bureaucratic or legal regulations, which can be counterproductive. Businesses should be supported through information as well as capacity development and know-how building offers. Initiatives within the framework of the United Nations (UN) should also aim to provide businesses with support while encouraging states to implement and enforce existing international agreements. The EU should also consider this at the UN level during negotiations on the draft for an international treaty in the field of business and human rights. Within multilateral forums and international organisations, the European Union should advocate for the alignment of competitive conditions for businesses in order to promote sustainability in supply and value chains.

The German Chamber of Commerce and Industry (IHK) calls for simplifications in sustainability reporting and oversight to better align with SMEs' limited resources.

Recognition of Environmental Initiatives

To foster responsible resource use, voluntary environmental management systems such as the European EMAS system are effective tools. Businesses joining EMAS commit to verifying compliance with environmental regulations and continuously improving their environmental performance.

In an increasingly digital world and society, CR also includes the responsible handling of data as well as the societal and economic changes resulting from digitalisation, known as Corporate Digital Responsibility (CDR). While sustainable corporate governance often focuses on the analogue world, CDR addresses advancements related to digital aspects: How does a company process incoming data, and how transparently is this communicated? How can applications of artificial intelligence be used responsibly for employees and customers?

The economy supports this aim, also considering that digital technologies can contribute to tackling structural and ecological challenges within companies. The potentials enabled by the interplay of digitalisation and sustainability should be carefully integrated into new laws but not made mandatory. Companies are aware of their CDR, which arises from digitalisation and the accompanying societal and economic changes.