German Supply Chain Due Diligence Act aims to promote more responsible supply chain management and protection of human rights in German supply chains. The Act requires companies to identify, prevent, and address human rights and environmental abuses in its own operations and across operations of direct suppliers. Companies must also provide a way for indirect suppliers to flag any human rights violations.

German companies who have a head office, place of business, or registered office in Germany with >3,000 employees, and non-German companies who have a branch or office in Germany with >3,000 employees are affected. In 2024, the act will extend to companies with head offices or branches in Germany with >1,000 employees.

German Supply Chain Due Diligence Act Standards and Compliance Timeline

The act is mandatory and entered into force on January 1, 2023.

Companies must establish a risk management system and perform regular risk analysis covering operations and direct suppliers; establish policies around human rights, supplier code and conduct, and approach to due diligence and create preventative measures for potential human rights violations.

All activities, including identifying risks and steps to address them, must be disclosed publicly in an annual report.

To whom and how to report:

Publicly in an annual report