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How SupplyShift Can Help You With the German Supply Chain Act

by | Jan 26, 2023 | Blog, Labor & Human Rights, Legislative

SupplyShift has recently updated and relaunched our Human Rights Compliance Assessment to ensure alignment with the German Supply Chain Due Diligence Act. Companies can use this assessment to analyze their suppliers` risk profiles. A risk analysis under the German Supply Chain Act may require, and in some prioritized cases does require, further steps like stakeholder engagement or audits, but our Human Rights Compliance Assessment is a necessary step in the process because a detailed on-site assessment of every supplier is not required under the law and is furthermore impossible.

The assessment covers questions on all human rights & environmental risks (Sect. 2 (2) and (3) of the Act) that companies are obligated to analyze under Sect. 5 of the Act. The assessment results include a full set of information, documentation, and a risk score that make it easy for a company to understand supplier performance and risk.

To ensure proper alignment of the questions and scoring methodology, the assessment was reviewed by external human rights legal counsel based in Germany. Daniel Schönfelder, German Human Rights Lawyer, not only confirmed the SupplyShift assessment’s comprehensive content and scoring but also pointed out a specifically beneficial aspect of it: “SupplyShift’s questionnaire is especially useful because it focuses on the suppliers’ own human rights due diligence in their supply chain. This is very useful to help implement the indirect supplier-related obligations under Section 9 (3) of the German Supply Chain Due Diligence Act, which will even become more relevant under the European Corporate Sustainability Due Diligence Directive (CSDDD) and is required by the UN Guiding Principles (UNGP) and the OECD Due Diligence Guidance.”

While most companies start by assessing their existing suppliers, the assessment can also serve as a basis to evaluate potential new suppliers’ risk profiles in line with Sect. 6 (4) No. 1 of the Act. This is specifically meaningful as the government’s explanatory memorandum on this Section points out the need to assess a new supplier’s human rights & environmental risk profile before entering a new business relationship (BT-Drs. 19/28649, p. 47).

SupplyShift’s Human Rights Compliance Assessment can be used as a standalone assessment or as part of our Human Rights Compliance Package. This package includes embedded risk screen data from Verisk Maplecroft, grievance mechanism software with our partners at Ulula, and implementation support.

Want to learn more? Click here to read about SupplyShift’s Human Rights solutions.

Jamie Barsimantov

Jamie Barsimantov

Chief Strategy Officer, SupplyShift
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