The Supply Chain Act poses new challenges to suppliers when conducting business with new or existing German-based customers.

Key Points:

..The Supply Chain Act obliges in-scope companies to identify, address, and report on human rights-related and environmental risks in their supply and value chains.

..Suppliers to German businesses should familiarize themselves with this legislation and anticipate that their German customers will require ESG-related information and related contractual safeguards.

..Suppliers should update their compliance management systems, allocate internal responsibility to communicate with customers falling within the scope of this Act, consider undertaking a (voluntary) risk assessment, and update their own supplier code of conduct.