The clothing industry calls for uniform conditions of competition in the EU

Germany abstained from voting on the European Supply Chain Act, the so-called Corporate Sustainability Due Diligence Directive (CSDDD). Germany negotiated the draft law right up to the end, but is now not supporting the result. In mid-December, the hard-won agreement between the EU Council and the EU Parliament on a draft law was still being celebrated as a success; the decision was actually only considered a formality. But now the FDP wants to reduce bureaucracy and refuses to give its consent. For many, Germany’s abstention, which passed a national supply chain law years ago, comes as a surprise. The media response and the reactions of many NGOs, associations and companies – including from the clothing industry – are correspondingly loud.

Vaude: Fatal signal to the economy

For Antje von Dewitz, CEO of the German outdoor retailer Vaude, this decision is “completely, completely catastrophic. She says this in the business podcast of the weekly newspaper Die Zeit. Vaude writes on X (formerly Twitter): “Europe needs a strong supply chain law! We noted with horror the FDP’s rejection decision. This is not a protection of the economy, but an active prevention of the development of future viability.” This rejection also sends a fatal signal to the economy “that investment in the development of these skills is not necessary,” it continues. This is not protection – as the FDP explains its decision, “but an active prevention of the development of future viability.”

S.Oliver: Disadvantages for German companies

The fashion company S.Oliver Group has commented on the Linkedin platform about Germany’s abstention and thus a possible end to a European supply chain law. S.Oliver writes that the S.Oliver Group “along with national and international partners, has always supported the development of the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) and actively promoted ambitious legislation.” The group sees it therefore “with concern that the agreement reached by the European legislative bodies could fail. This would have a particularly negative impact on German companies that already have to comply with the requirements of the German Supply Chain Act. Ambitious and mandatory sustainability standards strengthen responsible companies and create a level playing field for companies on the European market.

Tchibo: uniform conditions of competition in the EU

In an NDR interview, Johanna von Stechow, sustainability manager at Tchibo, warns of a possible failure of the EU directive. “Our customers want sustainable products, but also want to pay a fair price for them. This means that if we now have additional costs due to sustainability and other companies do not have that, then we have a very clear competitive disadvantage.”

Garment workers in Bangladesh protest for minimum wage Image: Sommilito Garments Sramik Federation (SGSF)

Many companies require consent

Under the title “EU Supply Chain Act: Blocking a compromise means creating legal uncertainty,” numerous companies have signed a position paper calling for approval of the CSDDD. In addition to Vaude, S.Oliver, Tchibo, Olymp and Brands Fashion, these include Aldi Süd, Kik, the BSI (Association of the German Sporting Goods Industry), the Federal Association of Sustainable Economy, Bayer AG and the Fair Wear Foundation. The position paper says:

“The political compromise on the CSDDD from December last year is based heavily on the UN and OECD standards and is therefore based on guidelines that responsible companies have been following for years. In our opinion, the requirements of the CSDDD are appropriate and implementable. Now there is the historic and, for now, only chance of an EU-wide level playing field. Particularly for German companies that comply with the Supply Chain Due Diligence Act, a Europe-wide regulation means that competitive advantages at the expense of people and the environment will finally be prevented.”

The Corporate Sustainability Due Diligence Directive (CSDDD) is a planned EU directive that will require companies to reduce their negative impact on human rights and the environment. It is intended to promote sustainable and responsible entrepreneurial activity and contains points such as protection against toxic substances, exclusion of child labor and appropriate wages. It is considered stricter than the German supply chain law. The current plan stipulates that companies with more than 1,000 employees must comply with due diligence obligations from 2027, companies with more than 500 employees from 2028 and companies with more than 250 employees from 2029.