Regulatory landscape is changing with more governments taking steps to drive corporate responsibility and sustainability, and EU is leading the way.
Recently in Germany the parliament passed “Act on Corporate Due Diligence in Supply Chains” which will enter into force in 2023.
In Norway the Norwegian parliament adopted the Transparency Act- mandating large and mid-size companies to conduct human rights and decent work due diligence in their supply chain and throughout all business relationships in their value chain.
At the EU Level a proposal for CSRD (Corporate Sustainability Reporting Disclosure) seeks to mandate sustainability reporting and assurance through the amendment of existing EU laws, including the Transparency Directive, the Accounting Directive, and the Audit Directive. This proposal goes beyond what the EU Non-Financial Reporting Directive currently provides.
The “Act on Corporate Due Diligence in Supply Chains” will enter into force in 2023 and will initially cover companies with 3,000 or more employees, and from 2024 onwards companies with 1,000 or more employees. These companies must identify risks of human rights violations and environmental destruction at direct suppliers and, if necessary, also at indirect suppliers.