The German Supply Chain Due Diligence Act SCDDA is a significant piece of legislation that aims to promote corporate responsibility and ensure human rights and environmental standards in global supply chains.
Enacted on Jan. Its overarching goal is to prevent and address human rights abuses, enhance sustainability, and create a level playing field for responsible businesses.
By introducing mandatory due diligence measures, the law will enhance supply chain transparency, mitigate risks, and help ensure corporate accountability. While compliance may present challenges, it also opens opportunities for companies to embrace sustainability, protect their brands, and contribute to a more sustainable and ethical business environment.
This year , the law applies to companies with 3, or more employees in Germany; in , it will apply to companies with at least 1, employees in Germany. It applies to the actions of companies, their contractual partners, and other suppliers. Practically, this means a company is responsible for everything that happens along its entire supply chain.
Key requirements include the following:. Regulated companies will need to invest in developing robust due diligence systems, which may require additional resources and expertise. Compliance costs will likely vary depending on how large a company is, the complexity of its supply chain, and its existing practices and procedures. Benefits of compliance include improved brand reputation, trust among partners and stakeholders, and reduced risk of legal and reputational damage resulting from human rights violations.
