Supply Chain Due Diligence and Reporting Regulations
Are you ready to navigate the evolving legal landscape of sustainability regulations?
We highlight the countries and jurisdictions where companies must apply due diligence in their operations and consequently make their supply chains transparent.
- Canada, North America | Effective: January 2024
Canada Modern Slavery Act (S-211)
Effective January 2024, the “Fighting Against Forced Labour and Child Labour in Supply Chains Act,” or the S-211 bill, introduces reporting obligations on some entities to describe the measures they have taken to prevent and reduce the risk that they or their suppliers are using forced labor or child labor. The first reports are due by the end of May 2024.
- U.S., North America | 2012
California Transparency Act (CTSCA)
The California Transparency Act requires businesses to disclose the effort they take to eradicate slavery and human trafficking from their direct supply chains by requiring companies of the specified size and scope to disclose their efforts to eradicate these practices.
- Australia, APAC | Effective: 2018
Australia Modern Slavery Act (Commonwealth Act)
Applicable to: Australian entities or companies carrying out business in Australia with a minimum AUD 100 million of consolidated yearly revenue.
- United Kingdom | Effective: 2015
UK Modern Slavery Act
Applicable to: companies that carry out business in the UK and its turnover (or the turnover of a parent company and its subsidiaries) reaches GBP 36 million or more.
- ExpectedEU | Effective: 2026EU Corporate Sustainability Due Diligence Directive (CSDDD)Mandatory Human Rights and Environmental Due Diligence
The CSDDD requires EU and non-EU companies to conduct due diligence and take responsibility for their human rights and environmental impacts throughout their supply chains. It is expected to come into force in 2024 and is set to take effect by 2026.
Applicable to: EU companies employing at least 500 persons with a turnover of over EUR 150 million, EU companies operating in sectors at high risk of human rights abuse employing at least 250 people with EUR 40 million turnover, Non-EU companies with a turnover of more than EUR 150 million in the EU, Non-EU companies from a high-risk sector with a turnover of at least EUR 40 million from their EU operations.
- EU | Effective: Level 1 from 2021, Level 2 as of 2023
Sustainable Finance Disclosure Regulation (SFDR)
Applicable to all asset and fund managers.
- EU
EU Taxonomy
The green taxonomy is primarily a classification system to clarify which economic activities can be considered environmentally sustainable. The EU Taxonomy provides a framework to define when a company operates in ways benefiting society and the environment, thus limiting greenwashing and creating a level playing field for sustainable investing.
- EU | Effective: From 2024 for the financial year 2023
Corporate Sustainability Reporting Directive
The Corporate Sustainability Reporting Directive (CSRD) is a pivotal regulatory reform initiated by the European Commission aimed at improving the landscape of non-financial reporting. It significantly extends the existing Non-Financial Reporting Directive (NFRD) by expanding its scope, tightening reporting requirements, and integrating sustainability into corporate governance.
- Germany, EU | Effective: 2023German Supply Chain Due Diligence Act (LkSG)German Supply Chain Due Diligence ActLieferkettengesetzes or LkSG mandates due diligence on human rights and environmental issues in supply chains. The German Act is an addition to a growing body of prescriptive legislation to ensure that companies take responsibility for their value chains. It requires specific due diligence actions and parameters in risk mapping, assessment and mitigation, as well as a higher threshold for supplier response.Applicable to companies operating in Germany with more than 3,000 employees (as of 2024, lowering the threshold to 1,000). Business that are part of the supply chains of those companies (directly or in tier 2 or more in some industries) will likely be required to respond to their ESG disclosure requests.
- France, EU | Effective: 2017
Duty of Care Law (Devoir de Vigilance)
Applicable to companies established in France, employing more than 5,000 people in France or 10,000 persons worldwide.
- The Netherlands, EU | Effective: 2022
Dutch Child Labor Due Diligence Act
Applicable to companies selling goods and services to Dutch end-users, including companies registered outside the Netherlands.
- Norway | Effective: 2022
Norway Transparency Act
Applicable to companies registered in Norway or companies paying taxes in Norway meeting at least two out of the following three criteria: 50 or more full-time employees; annual turnover of at least NOK 70 million; NOK 35 million balance sum.