SCDDA and CSDDD module in Check Your Value Chain

With the Supply Chain Due Diligence Act, the German government aims to fulfil the United Nations Guiding Principles on Business and Human Rights. The reason for this is the result of the action plan adopted in Germany in 2016, which aims to prevent the violation of human rights in the value chain. This is because too many companies do not adequately protect human rights in their global supply chains. 

The Supply Chain Due Diligence Act was passed in 2021 to ensure that respect for human rights and the protection of the environment is implemented in a binding manner throughout every company's supply chain. 

The CSDDD significantly tightens the requirements of the SCDDA. For Germany, this means that the content of the SCDDAmust be adapted by the legislator in line with the directive. The CSDDD provides for a strict framework of sanctions in the event of violations. The national legislator has been given a period of two years to implement this. Companies that are already implementing the SCDDA today will also be able to implement the CSDDD easily with our module.   

Important to know: Companies with more than 1,000 employees or a total annual turnover of at least 1,500 million euros will be obliged by the CSDDD in future.    

In contrast to the SCDDA, which only requires the monitoring of direct suppliers and, in the event of positive knowledge of risks or violations, indirect suppliers, the due diligence obligations under the CSDDD cover the entire supply chain.      

In addition to traditional human and labour rights, environmental protection and an ambitious climate target plan based on the goals of the Paris Agreement are also required.       

The most important differences and information on the SCDDA and CSDDD are provided here in a summarised, free overview. 

While companies with 1,000 or 5,000 employees or more are initially obliged to implement the SCDDA or CSDDD, small and medium-sized enterprises may be indirectly affected - especially if they are part of the supply chain of larger companies that are subject to due diligence obligations. To ensure that their entire supply chain complies with the requirements, companies affected by the supply chain guidelines could require their suppliers to also fulfil due diligence obligations in accordance with the SCDDA or CSDDD. To summarise: Large companies extend their due diligence obligations down the supply chain.

The environmental risks covered by the new law include the non-environmentally sound handling, collection, storage and disposal of waste (POPs Convention), the production and use of persistent organic pollutants (POPs Convention), the manufacture of products with added mercury the use of mercury and mercury compounds, the export and import of hazardous waste (Basel Convention), the harmful pollution of soil/water/air, harmful noise emissions, excessive water consumption and the unlawful clearance and abstraction of land, forests and waters.