High environmental impacts in German companies’ global supply chains

The new study Umweltatlas Lieferketten (English: “Environmental Atlas on Supply Chains”) from adelphi and Systain describes for the first time and in a comprehensive manner the environmental impact of German companies’ production abroad.

19/06/2017

The environmental footprint arising from companies’ international supply chains is often significantly higher than in their facilities in Germany. This is the main finding of the study Umweltatlas Lieferketten (English: “Environmental Atlas on Supply Chains”) from the Berlin based think tank adelphi and the sustainability consultancy Systain from Hamburg.

In accordance with these findings, the greenhouse gas emissions and pollutants produced in the supply chains of German engineering companies are nine times as high as in their local facilities. A considerable proportion is caused at the stage of direct deliveries. Companies can best influence these environmental impacts through their proximity to these factories. Moreover, around 2.8 litres of water is used per euro of turnover in the value chain for German engineering companies.  A tenth of that usage occurs in areas with significant water shortages.

"Practical support for companies in identifying the environmental impacts caused"

The Environmental Atlas researched supply chains in a total of eight sectors of the German economy. For each of these sectors, the authors break down the environmental impact of the respective value chain. These analyses reveal at which stage in the supply chain, in which upstream sectors and in which countries the environmental damages are caused. In this way the Environmental Atlas uncovers the environmental footprint of supply chains, which until now companies could only inadequately identify.

“The transfer of environmental impacts offshore is a massive challenge for German and international environmental and sustainability policy. For German businesses, sustainable management that stays within ecological limits in terms of impacts is not only an issue for their own factories but also one of great magnitude in their international supply chains. The study “Environmental Atlas Supply Chains” lends companies practical support in identifying the environmental impacts caused along their supply chains,” says Walter Kahlenborn, Managing Director of adelphi.

“The findings gained as a result of the surveys conducted by the ‘Environmental Atlas Supply Chains’ study clearly demonstrate that each company needs to systematically take charge of its own supply chain on a long-term basis. This does not only effect reputations, it chiefly influences business opportunities and risks. If downstream suppliers are impacted by water shortages or strict environmental regulations, this can lead to price hikes or complete disruptions of supply, and suddenly one’s business is immediately effected,” adds Hubertus Drinkuth, Managing Director of Systain.

The Environmental Atlas was funded as part of the export initiative for environmental technologies from the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety. With the aid of a so-called extended input-output model of industry structures, Systain calculated the data on greenhouse gas and nitrogen oxide emissions, water usage and land consumption for specific sectors and their respective supply chains. The following sectors are highlighted in the Environmental Atlas: clothing retailing, chemical, electronic, automobile, food retailing, engineering, metal production and paper.

Jungmichel, Norbert; Christina Schampel und Daniel Weiss 2017: Umweltatlas Lieferketten – Umweltwirkungen und Hot-Spots in der Lieferkette. Berlin/Hamburg: adelphi/Systain.