Complimentary Quick Guide
Germany's New Supply Chain Law: What You Need to Know
Germany’s Supply Chain Due Diligence Act was adopted in June 2021. This Quick Guide provides an overview of the legislation (as of July 2021) and practical suggestions on preparing your supply chain for the upcoming changes.
This quick guide will give insight on:
- Who will be affected by Germany's new supply chain law
- Due diligence requirements and sanctions for non-compliance
- What you can do to prepare your supply chain and minimize ethical risk
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Germany is the latest European state to introduce national legislation on human rights due diligence. Germany's new supply chain law aims to create an obligation for businesses to conduct human rights and environmental due diligence at all tiers of their supply chains.
The new law, which was adopted in June 2021 and takes effect on January 1, 2023, intends to hold companies responsible for ensuring adherence to social and environmental standards in their global supply chains. Businesses that fail to comply with the supply chain law’s requirements may face civil liability and be subject to administrative fines, while victims of human rights abuses would be entitled to file damage claims before German courts.
Key facts about the new supply chain law:
- The law will apply to companies that are based in Germany. Starting 2023, companies employing 3,000 or more people are affected; starting 2024, the scope of the law will extend to companies with 1,000 or more employees.
- Companies will have to ensure that social and environmental standards are observed at all tiers of their value chain, including suppliers of all sizes and in other countries.
- The law introduces mandatory reporting on compliance with the due diligence obligations, and penalties for non-compliance.
Download our quick guide to learn more about the impact of Germany's new supply chain law on your business, and discover what practical steps you can take to protect your global supply chain from ethical risk.
