Far reaching regulations to impact Asia's supply chains
Who should read this? If you work in Compliance, ESG and Procurement for companies operating in Asia and exporting goods or services to the EU Market.
In the last few weeks, we’ve seen two important developments in the European Union (EU) which will have substantial implications on global supply chains.
Firstly, on 5 March 2024 the EU Parliament and Council reached provisional agreement on rules that ban products made with forced labour from the EU market. The proposed regulations will impose requirements on companies importing into, or exporting to, the EU from in-scope sectors:
- in cases where it is suspected that forced labour has been used in a companies’ supply chains, the national authority or EU Commission can open an investigation into the company; and
- if proven, products will be withdrawn from the market.
Then on 15 March 2024, the EU Member States agreed the terms of the Corporate Sustainability Due Diligence Directive (CSDDD) which will now go to EU Parliament for approval in April 2024. Notwithstanding a reduced scope compared with the proposal set out in late 2023, the CSDDD aims to bring transparency and accountability for global supply chains by, among other things:
- mandating in-scope companies to identify and prevent, mitigate or end human rights and negative environmental impacts in their operations, subsidiaries and chain of activities;
- tightening companies’ due diligence across their upstream supply chain activities including the design, extraction, manufacture, transport, storage and sale of its goods or provision of services; and
- providing penalty mechanisms such as fines, compliance orders and damages from failure to comply.
These agreements are complemented by other EU Directives, such as Deforestation-free Products Directive which aims to ensure no products sold in the EU are made from recently deforested land, and the Green Claims Directive which requires that companies be able to substantiate environmental claims of their products.
How can givvable help?
If you operate in markets affected by tightening supply chain due diligence requirements, be prepared to demonstrate – with evidence – how your organization manages human rights and environmental impacts in its own operations and throughout its value chain.
givvable is a multi award-winning platform automating supplier sustainability & ESG diligence for corporate and government clients. Find out how givvable can support your organization to instantly validate supplier performance and practices using powerful AI & Data models to meet ESG requirements, globally.