SUSTAINABILITY
GERMANY Supply Chain Due Diligence Act Applies to : Companies with more than 3,000 employees based in Germany or German-registered branches of international companies . From 2024 , it will also apply to companies with more than 1,000 employees based in Germany or German-registered branches of foreign companies . What it says : Requires companies to identify , prevent or minimise the risks of human rights violations and environmental damage in their supply chains . Penalty : Fines of at least € 175,000 , or up to 2 % of the annual turnover , with a periodic penalty of up to € 50,000 .
FRANCE Duty of Vigilance Law Applies to : Companies WITH at least 5,000 employees in France or 10,000 worldwide , either directly or in their subsidiaries . What it says : Companies must have a due diligence plan in place that safeguards human rights and environmental impact from its supply chain operations . Penalty : Service of formal notice that may result in the issuance of a commercial court order and the imposition of a daily fine . also expanded the scope of company programmes , by placing greater emphasis upstream on raw materials .
“ He adds : “ It ’ s also brought a number of new stakeholders into the conversation , such as law firms . This has been both positive , but is also challenging , as these new stakeholders figure out scalable roles and responsibilities in a growing ecosystem .”
Then in Europe , there is the German Supply Chain Act ( GSCA ) and the EU ’ s Corporate Sustainability Due Diligence Directive ( CSDDD ).
These , say Franklin , will sharpen a company ’ s focus on their human rights and environmental due diligence , because they require a formal enterprise risk management process that forces companies to manage and report risks , and what they are doing about those risks .
“ This is all about walking the walk and not making empty platitudes ,” says Franklin . “ They must instead demonstrate tangible action , independently verify statements and reports , and work towards a new level of trust and transparency with stakeholders .”
He adds that the EU ’ s new directive is also one of the few to cover both human rights and environmental impact from value chains .
“ It takes a step further than previous reporting requirements by mandating companies demonstrate their risk mitigation strategies ,” he says . “ We ’ re in a new era of risk , with a completely new standard of due diligence expected by investors and stakeholders , so it ’ s time to meet the challenge .” supplychaindigital . com 89