The adoption of the Act on Corporate Due Diligence Obligations in Supply Chains – also referred to as the Supply Chain Act/ – brings with it new challenges for German and German-based international companies. Companies with more than 3,000 employees must comply with due diligence obligations throughout their supply chains from 2023 onwards – the Act will take effect for companies with more than 1,000 employees from 2024 onwards – in order to reinforce the rights of people affected within these supply chains. Due diligence obligations include the establishment of a risk management system, an at least annual risk analysis, and the definition of preventive and corrective measures, among other aspects. In addition, companies must provide regular reports and submit a Policy Statement on Human Rights Strategy. Our experts will support you in ensuring that your company is compliant with the Supply Chain Act from January 1, 2023 or January 1, 2024, respectively.
Avoiding violations of the Supply Chain Act
In addition to your own company’s operations activities at home and abroad, the Supply Chain Act focuses on direct suppliers (Tier 1) and, depending on the situation, also indirect suppliers (Tier 2-n). The law monitors a variety of direct and indirect violations, such as:
- Forced and child labor
- Unfair or unsafe working conditions
- Discrimination and non-compliance with equal treatment requirements
- Damage to the environment that has an indirect impact on people
Due to the large number of suppliers and the technical scope of due diligence obligations, companies are faced with the major task of establishing conformity with the law. Our experts will create transparency and increase awareness for possible violations along your value chain.
Supply chain compliance
Specifically and efficiently implementing Supply Chain Act requirements
As part of the implementation of the Supply Chain Act, our consultants start by assessing the status quo at your company. For example, we look at existing sustainability initiatives in the areas of compliance and procurement or carry out higher-level risk identification – for example based on supplier countries of origin or product groups. In the subsequent gap analysis, our experts clarify gaps in the existing setup in terms of the due diligence ambition level, prioritize them according to relevance, and work with you to define the target structure. Your company can approach the Act in a variety of ways, from pragmatic fulfillment to a comprehensive risk approach. Based on your specific target picture, our team determines the implementation plan and schedules milestones so that you will be compliant with the requirements set out in the Supply Chain Act by January 1, 2023 or January 1, 2024.