Brief introduction to the German Supply Chain Act

These regulations come into force along the supply chain with the new German Supply Chain Act (Lieferkettengesetz) — Enterprise Identity as a possible solution approach

Components of the Supply Chain Act

The German government has announced the Supply Chain Act for the current legislative period. While the Supply Chain Act will initially apply to Germany, it is designed to be implemented across the EU thereafter. Other European countries are also currently passing local supply chain acts, as for example the already effective supply chain act in France.

The first draft of the new act was published in February 2021. Key points of the supply chain law are:

• The government wants to issue binding regulations to respect and ensure human rights and climate standards along the complete supply chain.
• The law is likely to apply to companies with more than 3000* (1000 from 2024 onwards) employees and to make all activities and business relationships along the supply chain transparent.
• Companies should disclose whether value creation steps along the supply chain violate human rights, for example through child labor, or damage the environment, for example through the disposal of toxic substances in bodies of water.
• Companies should install appropriate risk…