Overview
This article explains how to create a supplier code of conduct, which topics it should cover and how to implement it.
Relevant for companies within the scope of the LkSG and for companies whose customers ask them for corresponding evidence.
Related topics: Policy statement and Human rights officer.
Purpose of the code of conduct
The code of conduct communicates your expectations to your suppliers. It is based on national requirements such as the German Supply Chain Due Diligence Act (LkSG) and on international frameworks:
United Nations Universal Declaration of Human Rights
Children's Rights and Business Principles
UN Guiding Principles on Business and Human Rights
International labour standards of the International Labour Organization (ILO)
UN Global Compact
Based on your risk analysis, you set out the most important expectations in a binding document that your suppliers agree to. Obtaining a contractual assurance from direct suppliers that they will comply with your human rights and environmental expectations is one of the preventive measures under Section 6 (4) LkSG.
Creating a code of conduct
Define objective and purpose: Clarify which values and standards of behaviour the code should promote. This is the basis for all further steps.
Involve stakeholders: Take into account the concerns and expectations of key stakeholders such as employees, customers, suppliers and investors.
Research and adapt: Review existing codes of conduct of comparable companies or industries and adapt proven approaches to your company.
Define values and guidelines: Define core values, e.g. integrity, respect and sustainability.
Write clearly: Use plain language so that everyone involved understands the guidelines.
Plan roll-out and training: Decide how you will introduce the code, e.g. with training, workshops and internal communication.
Define monitoring and enforcement: Determine how you monitor compliance and what consequences follow violations, e.g. via a complaints procedure.
Communicate transparently: Make the code publicly available and communicate it internally and externally.
Review regularly: Review and update the code at fixed intervals.
Gather feedback: Collect feedback from employees and stakeholders to improve the code continuously.
Requirements for suppliers
A code of conduct that works in the long term is based on the risk analysis, in which you identify the human rights and environmental risks in your supply chains. Suppliers that sign the code commit to meeting its requirements in all their business activities.
Human rights – the code should address the following risks in particular:
Child labour
Forced labour and all forms of slavery
Disregard of occupational health and safety
Disregard of freedom of association and the right to collective bargaining
Unequal treatment in employment
Withholding of an adequate wage
Unlawful forced eviction and deprivation of land
Harmful pollution of soil, water and air
Use of security forces in violation of human rights
Corruption and bribery
Environmental protection:
Handling of waste and hazardous substances, e.g. mercury
Consumption of raw materials and natural resources
Energy consumption
Implementing the code of conduct
The code of conduct links your company's sustainability goals with the behaviour you expect from your suppliers.
The code usually addresses direct suppliers.
You can require them to ensure that their subcontractors also comply with the code and report on its implementation.
Which requirements you set and how extensive the measures are depends on company size, the nature and scope of the business and, above all, on the result of the risk analysis.
Next steps
Companies without a code of conduct
Proceed step by step: first define values, standards of behaviour and responsible persons (e.g. a human rights officer), then improve the code and its implementation continuously.
Companies with a code of conduct
Review the code regularly and adapt it when legal requirements change – for example due to the amendment of the LkSG or the transposition of the EU Corporate Sustainability Due Diligence Directive (CSDDD) into German law.
Templates