EU Member States have Concerns about European Supply Chain Laws

The Next Step in EU Directive on Corporate Sustainability Due Diligence.

For now, there doesn’t appear to be a majority among EU member states in favor of a European Supply Chain Law.

Supply Chain for Environmental and Human Rights Protection

The Supply Chain Due Diligence Act (SCDDA) last year marked a significant step for environmental and human rights protection in the economy. Now, the EU is following suit with a Europe-wide Supply Chain Law. These laws aim to hold companies accountable for ensuring ethical practices throughout their supply chains, emphasizing transparency and responsibility from extraction to end-of-life phase. Compliance is crucial, with penalties for violations.

The EU Mandatory Due Diligence Regulation is a proposal by the European Commission aimed at strengthening the human rights and environmental due diligence of companies, particularly along their global supply chains. While the laws faced challenges and delays due to opposition from certain EU member states, the issue may still be revisited and addressed in the future. The path forward for the law could involve further negotiations and discussions among EU member states to address concerns and reach a consensus. It’s possible that amendments or compromises may be made to the proposed law to garner broader support.

Supply Chain Due Diligence Act (SCDDA) is currently in effect, and the Law may be enacted soon.

Are you ready for ESG?

The law would require companies to adhere to certain due diligence obligations concerning human rights, labor standards, environmental protection, and anti-corruption efforts throughout their supply chains and document their actions. This could include reviewing supplier practices, ESG data and sustainability information, conducting risk assessments, and implementing measures to sync tools and align processes and mitigate risks.

Urgent Call Prioritizing ESG Considerations in Global Supply Chains is Vital!

Now more than ever, putting emphasis on and preparing for addressing human rights and environmental, social and governmental concerns within global supply chains with increasing awareness of ESG in supply chain practices, it’s imperative for businesses to prioritize sustainability considerations.

By proactively addressing these issues, companies can uphold their commitment to social responsibility and sustainability. This involves implementing Supply Chain Due Diligence measures, establishing Key Performance Indicators (KPIs), implement interoperability of systems to suppliers and sub-suppliers to align KPI and compliance, and ensuring robust monitoring and reporting mechanisms are in place.

The stakes are high, as penalties for violations are becoming more stringent. Therefore, it’s critical for businesses to take proactive steps to mitigate risks and ensure compliance with ESG and ethical standards. Embracing transparency and accountability in supply chain practices not only protects against legal repercussions but also enhances reputation and builds trust with stakeholders.

In summary, preparing for Supply Chain Due Diligence, establishing KPIs, and implementing robust monitoring and reporting mechanisms are essential steps in navigating the evolving regulatory landscape and building a sustainable future for all.

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