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3 months to go: Are you ready for the German Supply Chain Due Diligence Act?

On 1 January 2023, the German Supply Chain Due Diligence Act will enter into force. In a first step, all companies which have a specific nexus to Germany and normally employ 3,000 people or more will have to comply with newly imposed due diligence obligations aimed at minimising the risk of infringements of human rights and environmental standards. 

Suppliers to such companies are already being asked to comply with similar obligations irrespective of whether the law currently applies to the suppliers themselves. In any case, the law will also become directly applicable to German companies normally employing 1,000 people or more as of 1 January 2024. 

Whichever date is applicable in the individual case, the fact that the German Supply Chain Due Diligence Act will presently apply should prompt companies to consider the latest developments relating to product and supply chain regulations that unanimously aim to promote sustainability, environmental protection and human rights – all of which are highly critical issues for both companies and investors when addressing ESG strategies.

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