In light of the upcoming European Corporate Sustainability Due Diligence Directive, Germany debates a two-year hiatus on its national supply chain due diligence law to alleviate corporate strain.
Easing Corporate Strain
The German government is contemplating a two-year suspension of the national supply chain due diligence law, as stated by Economy Minister Robert Habeck. This pause is intended to reduce the regulatory load on businesses until the European directive is implemented. The law, which took effect in January 2023, requires large companies to establish procedures ensuring their suppliers adhere to human rights and environmental standards.
Alignment with EU Directives
The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), passed in April 2024, is set to be enacted in 2026. This will necessitate Germany to revise its own legislation to be in sync with the EU’s framework. Habeck, addressing family business leaders, suggested that halting the national law could offer much-needed relief for companies. A definitive resolution on this proposal is anticipated within the next few weeks.
