The Role of Supply Chains in Sustainability Management
The study has been carried out annually since 2021. This year’s results underscore the critical role of supply chains in corporate sustainability strategies. Among large enterprises with more than 1,000 employees, 69% identify their supply chains as a crucial pillar of their sustainability initiatives. Meanwhile, across all company sizes, 78% conduct sustainability analyses of their suppliers. Generally, the larger the company, the more crucial the supply chain is perceived from a sustainability perspective. As a result, companies with over 3,000 employees tend to be more proactive, with 97% screening their suppliers, compared to just 40% of small businesses.
Companies primarily focus their sustainability analyses on strategic, tier 1, top-spend, and high-risk suppliers. The most frequently scrutinized topics include human and labor rights (95% of all companies), environmental protection (94%), and occupational health and safety (80%). At 78%, responsibility along the supply chain has seen the biggest surge since 2021, marking a 45% increase. This highlights the growing importance of cascading sustainability standards down the entire supply chain – in line with the requirements of numerous regulations.
Supply Chain Transparency – The Holy Grail
Despite these efforts, transparency remains a significant challenge. Only 16% of companies have full visibility into the sustainability risks of their direct suppliers, 72% have partial visibility, and 12% have no insights. For indirect suppliers, the numbers are even lower: only 7% have full visibility, 46% have partial visibility, and 47% have no knowledge of sustainability risks.
Figure 1 outlines the main obstacles companies face in improving transparency in indirect supply chains. Most businesses struggle with the complexity of their supply chains, limited access to reliable data, poor supplier cooperation, and insufficient internal resources.
Figure 1: What are the biggest challenges in improving transparency in indirect supply chains?

Practical Implementation of the German Supply Chain Act
Two-thirds of survey participants are directly affected by the German Supply Chain Act. Of the remaining companies, which are not legally mandated to comply, 81% plan to meet the requirements either partially or in full on a voluntary basis – a figure that has consistently been above 80%. Most of these companies (71%) view the German law as valuable preparation for the upcoming Corporate Sustainability Due Diligence Directive (CSDDD), while pressure from customers (65%) is the second most significant driver.
Most companies report progress in key compliance areas, including risk management, internal accountability, and reporting. However, ensuring due diligence for indirect suppliers remains by far the biggest challenge. Other obstacles include resource constraints, the need for cross-departmental collaboration, and ambiguities in regulatory guidance.
Positive Impacts of the German Supply Chain Act
One of the study’s most notable findings is that 51% of companies believe the German Supply Chain Act has helped strengthen sustainability in their supply chains. The key areas of progress are displayed in Figure 2. While 36% of respondents remain uncertain about the law’s impact, 13% see no benefit, citing administrative burdens and questioning its practical value.
Most survey participants recognize the critical role of collaboration in successfully implementing the German Supply Chain Act. Supplier engagement (90%) and internal collaboration across departments and subsidiaries (83%) are seen as particularly important. By contrast, collaboration with external partners (28%) and industry peers (7%) plays a minor role.
Figure 2: What progress have you made in supply chain sustainability?

Preparing for Future Regulations
The German Supply Chain Act is widely regarded as a valuable stepping stone for the upcoming CSDDD – a view shared by 80% of respondents. Businesses credit the German law with raising awareness of sustainability issues, fostering expertise, and establishing the necessary processes and IT infrastructure for compliance (see Figure 3).
By leveraging their experience with the German Supply Chain Act, companies can better position themselves for the evolving regulatory landscape and turn compliance into a competitive advantage.
Figure 3: Does the implementation of the German Supply Chain Act help you prepare for the EU’s CSDDD?

While companies acknowledge that the German Supply Chain Act provides a strong foundation, many anticipate significant challenges under the CSDDD. Transparency in complex supply chains remains a key concern, particularly regarding data collection and validation, risk assessments and mitigation, and the engagement of indirect suppliers.
In view of the CSDDD and other forthcoming due diligence regulations, businesses expect major shifts in their future decision-making. 70% anticipate a stronger focus on supply chain management and transparency, while 56% plan to embed sustainability more deeply into their corporate strategies. Many also foresee a closer alignment between sustainability goals and business objectives, along with increased investments in digital tools for supply chain monitoring.
Supplier relationships are equally expected to evolve. A growing number of companies intend to prioritize sustainable suppliers, with 41% of large enterprises (>1,000 employees) and 28% of SMEs (<1,000 employees) seeking partnerships that align with their values. In addition, some companies anticipate changes to their product and service portfolios in response to tightening sustainability standards.
Conclusion and Outlook
The survey shows that the German Supply Chain Act has the potential to drive positive impact, as reflected in companies’ feedback. Many businesses have already implemented prevention and remediation measures that actively support compliance with human rights and environmental standards. Additionally, 51% of participants believe the law helps advance sustainability in the supply chain.
EU lawmakers should clearly highlight the added value of the CSDDD and other regulations for businesses and demonstrate how these frameworks enhance sustainability, efficiency, innovation, and resilience. Providing additional support, resources, and actionable guidelines could further encourage companies to recognize the benefits of these initiatives.
How IntegrityNext Can Help
The IntegrityNext platform offers a comprehensive suite of solutions designed to ensure compliance with due diligence laws such as the German Supply Chain Act and the CSDDD. Additionally, our Multi-Tier-Visibility solution enhances transparency across the entire supply chain – from raw materials to finished products – and delivers the critical insights companies need to navigate complex due diligence requirements.
The benefits of our platform include:
- High degree of automation along the entire due diligence process
- Extensive data collection on all relevant topics
- Effortless establishment of a robust complaints procedure
- Full supply chain transparency to identify and mitigate risks
- Advanced risk analysis and management
- Effective implementation of preventive and corrective actions
- Documentation and reporting in line with legal requirements
- Expert guidance from a dedicated ESG support team
To learn more, schedule a personal demo and explore how IntegrityNext can support your compliance efforts.
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