Policy Briefing — Germany Supply Chain Due Diligence Act
Germany’s Supply Chain Due Diligence Act cleared the Bundestag, compelling large companies to operate human rights and environmental risk management systems ahead of its 2023 effective date.
Executive briefing: Germany’s Bundestag passed the Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz) on June 11, 2021. From January 1, 2023, companies with at least 3,000 employees (1,000 from 2024) must implement proportionate risk management, preventive measures, and remediation plans covering human rights and selected environmental obligations across their supply chains.
Immediate compliance priorities
- Risk analysis framework. Build annual and ad-hoc risk assessments covering own operations and direct suppliers, documenting methodology, data sources, and prioritisation criteria (Sections 5–6).
- Policy statement. Issue a corporate policy setting due diligence principles, expectations for procurement, and responsibility assignments under Section 6.
- Complaints procedure. Stand up accessible grievance channels for internal and external stakeholders with impartial case handling and retaliation protections (Section 8).
Control alignment
- Preventive measures. Embed environmental and human rights clauses in supplier contracts, conduct training, and integrate sustainability KPIs into procurement scorecards.
- Corrective actions. Document escalation ladders, remediation timelines, and disengagement criteria when serious violations are detected.
- Reporting and documentation. Prepare annual due diligence reports for publication within four months of fiscal year-end and retain records for at least seven years to satisfy Section 10.
Enablement moves
- Map overlaps with EU Corporate Sustainability Due Diligence Directive proposals to future-proof data collection and remediation evidence.
- Deploy supplier assessment platforms capturing human rights, climate, and environmental performance metrics with audit trails.
- Align internal audit plans to review due diligence governance, risk analysis quality, and remediation outcomes annually.
Sources
- BMAS press release on the Supply Chain Due Diligence Act
- Federal Law Gazette: Lieferkettensorgfaltspflichtengesetz (BGBl. I 2021 S. 2959)
Zeph Tech delivers due diligence risk taxonomies, supplier engagement scripts, and reporting templates aligned with Germany’s BAFA supervisory expectations.