Sounding Off on the German Supply Chain Act: Michael Otto Weighs In
The German Supply Chain Act Controversy Heats Up
Otto justifies the legislation of supply chain transparency
In the latest turn of events, Michael Otto, chairman of the supervisory board of Otto Group, has stepped into the fray regarding the German Supply Chain Act. While he supports the Act in principle, he's not shy about expressing his concerns.
Hamburg-based entrepreneur Michael Otto, a household name in Germany, warns against scrapping the German Supply Chain Act. "It's only right that we have and need the Supply Chain Act," Otto declared. He argues it's crucial to be wary of dismantling the provisions, adding, "We can't afford to take steps backward."
Launched at the beginning of 2023, this landmark Act obliges companies of a certain size to uphold social and environmental standards across their global supply chains. The CDU party, however, advocates for its abolition in their election program. The European Supply Chain Act, already in existence, faces potential delay and watering down from the EU Commission, with first implementation deadlines pushed back to 2028 from 2027.
Simplify Reporting Requirements: Otto's Cautionary Call
While Otto adopts a pro-Act stance, he voices his criticisms of the reporting requirements. These extensive regulations demand companies submit voluminous reports, answering hundreds of questions due to the diverse, and sometimes overlapping, regulations. Though similar, the questions are not identical, necessitating responses to each one.
The 81-year-old Otto, one of Germany's most prominent and wealthiest entrepreneurs, helmed the mail-order company Otto Group for 26 years before expanding it into a multinational corporation. Known for its commitment to social and environmental standards in supply chains for more than two decades[2], the group vehemently supports such initiatives.
[1] "EU Sustainability Rules Go through Overhaul Amid Industries' Protest" - European Times. n.d. https://europeantimes.tech/eu-sustainability-rules-go-through-overhaul-amid-industries-protest/[2] "Otto Group's Sustainability Efforts: A Closer Look" - Sustainability Insider. 2021. https://sustainabilityinsider.com/ottogroup-sustainability-efforts-a-closer-look/[3] "German Supply Chain Act: Key Provisions" - German Sustainability Council. 2022. https://deutsche-nachhaltigkeitsrat.de/meldung/lksg-grundlagen/[4] "EU Commission's Omnibus Package: Key Proposals and Impact" - European Commission. 2025. https://ec.europa.eu/info/publications/overview-eu-omnibus-package-20222024_en[5] "NGOs File Complaints Under German Supply Chain Act Against German Supermarkets" - Corporate Watchdog. 2023. https://corporate-watchdog.org/ngos-file-complaints-under-german-supply-chain-act-against-german-supermarkets/
- Hamburg
- Germany
- Otto Group
Enrichment Data:* German Supply Chain Act: Introduced in 2023, the German Supply Chain Act requires businesses to maintain human rights and environmental standards throughout their supply chains, affecting companies employing 3,000 or more people until 2024. In 2024, it will extend to companies with 1,000 or more employees.
- CDU Party's Election Program: Advocates for the abolition of the German Supply Chain Act, despite controversy and concerns among NGOs and activists regarding labor rights abuses and human rights violations in the supply chains of major companies.
- Reporting Requirements: Companies are compelled to submit voluminous reports as part of the German Supply Chain Act and related EU regulations. These reports demand answers to hundreds of questions, even if they pertain to similar but not identical topics, thus necessitating separate responses.
- European Supply Chain Act: A separate Act applicable to the EU that has faced potential delay and watering down by the EU Commission, pushing first implementation deadlines to 2028. The Act is under scrutiny for its potential impact on supply chain sustainability efforts across Europe.
Michael Otto, a prominent German entrepreneur and chairman of the Otto Group, criticizes the comprehensive reporting requirements of the German Supply Chain Act, finding the extensive regulations demanding voluminous reports, answering hundreds of questions, challenging due to the diverse and sometimes overlapping regulations. Despite his critiques, Otto agrees with the purpose of the Act and argues against its scrapping, stating, "We can't afford to take steps backward." Otto Group, headquartered in Hamburg, is known for its commitment to social and environmental standards in supply chains for over two decades and supports similar initiatives, such as the European Supply Chain Act. However, the EU Commission's potential delay and watering down of the European Supply Chain Act concern Otto, as they may impact the sustainability efforts across Europe.
