Due diligence of copper at Siemens Energy

Abstract

The paper outlines the dilemma of mineral sourcing and sustainability while it analysis possible solutions to mitigate sustainability risks according to the current and upcoming legislative regulations of the EU and the USA. Moreover, it illustrates how one of the solutions (multi-tier supply chain management) can reduce sustainability risks in the upstream supply chain even if the indirect suppliers act outside of the visible horizon of the focal firm. The alignment with the legal requirements of SCDDA, Directive 2019/1927, DFA, and the CMR is ensured, as these regulative frameworks have been compared, evaluated, and categorized into six main areas a company in scope has to fulfill. Existing models of multi-tier supply chain management and sustainability are developed in low-complex supply chains and via the connection to best practices in the industry, a model is given that illustrates the enrolment of multi-tier supply chain management and sustainability in a high complex supply chain with up to 20 tier suppliers. A full design science approach has been applied to verify this solution. Hence the developed model has been applied in the copper supply chain at Siemens Energy, a multinational enterprise that provides sustainable solutions in electric and power engineering. Insights into the process are given and challenges during the enrolment are elaborated. Therefore managers are enabled to establish responsible sourcing in a fast-changing legal environment as well as to make their companies ready to contribute toward sustainability along the supply chain.