According to www.clearygottlieb.com, new supply chain due diligence obligations are now in force or imminent across Germany, France, and the European Union — imposing binding legal requirements on companies regarding human rights and environmental impacts throughout their value chains.
Germany’s Supply Chain Act (LkSG)
The German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, or LkSG) entered into force on 1 January 2023. It applies to companies with at least 3,000 employees operating in Germany as of that date; from 1 January 2024, the threshold lowers to 1,000 employees. The law requires covered entities to implement risk management systems, conduct regular risk analyses, prevent or mitigate adverse impacts, and establish internal complaint procedures. Enforcement is carried out by the Federal Office for Economic Affairs and Export Control (BAFA), which may impose fines of up to 2% of global annual turnover.
France’s Duty of Vigilance Law
France’s Duty of Vigilance Law (Loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre), enacted in 2017, applies to French parent companies with at least 5,000 employees in France or 10,000 employees worldwide. It mandates the development and public publication of a ‘vigilance plan’ covering risk mapping, assessment, prevention measures, monitoring mechanisms, and grievance handling. Courts have affirmed the law’s extraterritorial reach, and non-compliance may result in civil liability for damages arising from failures to implement adequate vigilance.
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD)
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) was formally adopted in 2024 and will be transposed into national law by 26 July 2026. It applies to EU-based companies with more than 1,000 employees and €450 million in net worldwide turnover, and to non-EU companies generating more than €450 million in net turnover in the EU. The CSDDD expands obligations beyond human rights and environment to include climate transition plans aligned with the Paris Agreement. It also introduces director accountability for sustainability due diligence and enables victims to seek redress in EU courts for harms linked to inadequate due diligence.
Practical Implications for Global Supply Chain Professionals
These overlapping regimes require coordinated action: companies must now map Tier 1–N suppliers, assess risks across geographies and commodities, document mitigation efforts, train procurement and compliance staff, and integrate due diligence into contracting and supplier onboarding. According to the report, “the convergence of national laws and the CSDDD signals a decisive shift from voluntary ESG reporting to enforceable, operational accountability.” This means supply chain professionals must treat due diligence not as a standalone audit function but as embedded in sourcing strategy, contract management, and performance KPIs. As noted in the source, “compliance requires ongoing monitoring—not just point-in-time assessments.”
Source: www.clearygottlieb.com
Compiled from international media by the SCI.AI editorial team.
