European supply chain law adopted

The EU member states adopted the long-discussed European Supply Chain Act (as an EU directive) in Brussels on May 24, 2024. Last Friday, the new European regulations were approved under the Belgian EU Council Presidency, which are intended to strengthen human rights worldwide. One of the aims is for large companies to have to answer to European courts in future if human rights violations, such as child or forced labor in particular, occur in their supply chains.

Although the European rules were recently weakened again during the negotiation process, they will nevertheless entail additional requirements for companies. The new EU Supply Chain Directive also obliges European companies to draw up climate plans. This is intended to ensure that companies' business models not only comply with human rights, but are also compatible with the goal of limiting global warming to 1.5 degrees compared to pre-industrial times.

Following the adoption of the EU directive, the individual member states now have a good two years to transpose the new rules into national law. The new requirements will then initially only apply to companies with more than 5,000 employees and a turnover of 1.5 billion euros. One year later, companies with 4,000 employees and a turnover of 900 million euros will be covered and five years later, companies with more than 1,000 employees and a turnover of 450 million euros will be covered.

According to initial statements at government level, the German and European Supply Chain Act should not result in a material or bureaucratic double burden. Whether this will succeed will have to be critically observed.

If you have any questions about the content and the consequences of the supply chain regulations under commercial and labor law, please contact the team at PBC legal. Business law. Labor Law. with pleasure.