The law additionally gives civil society organisations the ability to sue companies on behalf of workers over breaches of human rights in supply chains.
It had originally been planned to be introduced in 2020, but negotiations were required between the government's coalition partners, with the Social Democratic Party of Germany eventually backing down on including small companies in the law after opposition from the CDU/CSU.
With regulations such as sustainability reporting, the deforestation directive or the supply chain law, ‘even with good intentions, we have taken a completely wrong turn’, he said, emphasizing that competitiveness is under pressure in Germany and red tape should be cut.
[10] The European Union is expected to follow Germany in the coming years with a similarly sweeping piece of legislation.
Specifically, the proposed Corporate Sustainability Due Diligence Directive will cover the same measures as the German Supply Chain Act and is built to level the playing field for ESG initiatives and the people throughout the supply chain.