In this article, we delve into who the SCDDA affects, what organizations must do to comply, and how they can prepare for due diligence obligations.
As a result, the SCDDA requires organizations to comply with international agreements focusing on environmental risks-such as the Minamata and Basel Conventions-to limit harm caused by pollutants, toxic chemicals and the handling and disposal of hazardous waste.
This is a defining moment in environmental, social and governance (ESG) accountability as this is the first time that German organizations will be held legally responsible for respecting human rights in their global supply chains.Īlthough the Act focuses heavily on the ‘S’ in ESG, it does consider that environmental risks and their negative impact on human health within supply chains are deeply intertwined. In 2021, Germany passed the Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten, LkSG or the German Supply Chain Due Diligence Act (SCDDA). This preface to the German Supply Chain Due Diligence Act (SCDDA) on the German Federal Government’s website captures why governments are stepping in to place emphasis on the human aspect of the supply chain, beyond environmental impacts like supply chain emissions.
“Garments come from Asia, cocoa and fruit from Africa, and coffee from South America-the new Supply Chain Act (Lieferkettengesetz) aims to protect the rights of people who produce goods for the German market.”
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