EU countries agree on supply chain law: companies must ensure human rights and environmental standards along their supply chains. EU Supply Chain Act supplements and tightens national regulations: Sanctions and civil liability for breaches of due diligence are strengthened. With Synesgy, CRIF offers a technological solution for the evaluation of global supply chains and compliance with legal requirements.
After long and intensive negotiations, the EU countries agreed on a European supply chain law on March 15, 2024.
Following the adoption of the Corporate Sustainability Due Diligence Directive (CSDDD), also known as the EU Supply Chain Act, only the European Parliament now needs to give its final approval.
European companies will now be obliged to guarantee human rights and environmental standards along their supply chains and with their suppliers. The law requires companies throughout the EU to prove that the products they import from third countries are free from child labor and environmental damage. Although the adopted draft law is less stringent than the one originally planned, it still has a significant scope.
Companies with more than 1,000 employees and an annual turnover of 450 million euros are affected by this law. A weakening of the civil liability options was also introduced.
Nevertheless, small and medium-sized enterprises are not excluded, as many of them act as suppliers to large companies and must therefore also submit reports on their compliance with the standards in order not to jeopardize their business relationships.
Member states now have two years to transpose the EU supply chain law into national law. The European Supply Chain Act will supplement and tighten the existing Supply Chain Duty of Care Act (LkSG) in Germany, as the European requirements of the EU Supply Chain Act provide for significantly stricter regulations in some areas. The current draft directive provides for turnover-related fines. It also introduces a new civil liability for breaches of due diligence in Germany.
The CRIF platform Synesgy is already successfully in use internationally with 450,000 users and also maps the global supply chains of 1,500 customers. With its Synesgy sustainability platform, CRIF can address the concerns that companies still have. "With our Synesgy platform, CRIF offers a technological solution for mapping and evaluating international supply chains. A sustainable success concept that has been used successfully worldwide since 2020," explains Dr. Frank Schlein, Managing Director of CRIF Germany.
The new law places an even greater obligation on companies to actively identify, assess, prevent, mitigate and remedy negative impacts on human rights and the environment that they and their supply chain have. This includes aspects such as child labor, slavery, labor exploitation, pollution, deforestation, excessive water consumption and damage to ecosystems.
Synesgy: The Global ESG Platform for Supply Chain Assessment and Certification
CRIF launched the ESG platform Synesgy in 2020. Synesgy already has an LkSG questionnaire in accordance with German law, and the platform evaluates supply chains and their sustainability and presents them transparently. Thanks to the automatic invitation management and the data provided by CRIF, the administrative effort involved in the supply chain evaluation is low. "Our platform is available globally, so that even complex supply chains can be mapped and evaluated. An internal rating agency certifies the sustainability level of a company or its supply chain. Using Synesgy is financially attractive for all companies. After all, costs and resources should not be an obstacle to the implementation of such an important law," explains Dr. Schlein.
You can find more information at www.synesgy.de
