A Close Look at the German Supply Chain Act for Businesses
Discover the implications of the German Supply Chain Act on your brand, empowering you with the knowledge and insights to thrive in compliance.
What is the Supply Chain Act?
The Supply Chain Act, also known as the German Supply Chain Due Diligence Act or Lieferkettengesetz, is a comprehensive law enacted by the German government. It requires companies of a certain size to ensure their global supply chains are free from human rights violations and environmental damage. It has gained recognition for being one of the most comprehensive laws in Europe and has garnered praise from human rights and environmental advocates. The Act establishes a framework that compels companies to conduct due diligence and take responsibility for their supply chain impacts. It has inspired other countries, like the European Union, to consider similar legislation addressing human rights and environmental risks in supply chains.
The German Supply Chain Due Diligence Act was passed by the German government in June 2021.
Who does it apply to?
It applies to companies in Germany meeting size criteria, including those with over 3,000 employees or over 1,000 employees headquartered in Germany for at least three years. It covers industries like electronics, clothing, textiles, agriculture, food, extractive industries, automotive, and transportation.
How to address it?
Companies must collaborate across workstreams like procurement, supply chain management, compliance, and sustainability. They need to identify and mitigate risks related to human rights abuses and environmental harm. Establishing a strong due diligence system with regular risk assessments, preventive measures, and monitoring is crucial. Transparent public reporting of due diligence efforts is also required to demonstrate commitment and progress in addressing these concerns.
German Supply Chain Act made easy with CommonShare
|Supply Chain Act Requirements
|Features in CommonShare
|Supply Chain Due Diligence
|Risk Mitigation Measures
Enhance supply chain visibility with CommonShare's platform
- Compliance officers effortlessly collect and share traceability data with business partners and regulators
Collaborative fill in data gaps with suppliers across the supply chain.
- Bridge Sourcing Gaps with Efficient Sourcing Requests
Combat non-compliance by easily identifying new sourcing partners.
- Track All Performance for ESG Compliance within One Easy to Use Platform
Track all sourcing, verification, traceability, and other updates within one dashboard.