ROI Calculator
Across the world, countries are implementing ESG legislation to make supply chains more resilient and ethical. Learn about the upcoming dates for supply chain ESG compliance and how to be compliant in 2024.
This year, Resilinc CEO Bindiya Vakil, named ESG as one of the top five supply chain megatrends. As ESG considerations become a fundamental pillar shaping the supply chain landscape, businesses must stay up to date on the latest legislation. Embracing ESG principles isn’t merely a matter of compliance or reputation management; it’s a strategic imperative for companies seeking long-term resilience and anti-fragility.
In this blog, we look at pivotal ESG legislation set to shape supply chains in 2024. We discuss key dates for supply chain ESG compliance so your company and your supply chain can stay ahead of the curve.
April 30 — The German Supply Chain Due Diligence Act (LkSG)
The German Supply Chain Due Diligence Act (LkSG) requires large German companies to monitor and address human rights and environmental risks in their global supply chains, with penalties for non-compliance. Initiated on January 1, 2023, this act allows the German government to investigate the supply chain of any company based in Germany with more than 3,000 employees for human rights violations. Starting in 2024, more German companies will have to adapt to the SCCDA, as the employee threshold has changed from 3,000 to a mere 1,000 employees.
Every year, companies must submit their annual report to the German Federal Office for Economic Affairs and Export Control (BAFA) and publish it on their website no later than four months after the end of their fiscal year. For companies with a fiscal year-end of December 31, the annual report submission date is April 30, 2024.
May 31 — Canada’s Modern Slavery Act (MSA)
Canada’s Fighting Against Forced Labor and Child Labor in Supply Chains Act—also known as the Modern Slavery Act (MSA)—went into effect on January 1, 2024. The act applies to companies listed on a Canadian stock exchange and companies that do business in Canada with at least $20 million in assets, $40 million in revenue, and at least 250 employees.
Businesses subject to the act must file their first annual report by May 31, 2024. In this report, companies must cover the steps they took during the previous financial year to prevent and reduce the risk of forced and child labor in their supply chain. Key penalties for non-compliance include fines of up to $250,000 for the business and personal liability for the directors, officers, and agents involved.
July 6 — The EU Corporate Sustainability Reporting Directive (CSRD)
The EU Corporate Sustainability Reporting Directive (CSRD) is a new regulation initiated on January 1, 2024 that expands the scope of mandatory supply chain ESG compliance reporting requirements for large public companies in the EU. The CSRD aims to improve transparency and accountability around companies’ sustainability impacts to support the EU’s climate and environmental objectives under The European Green Deal.
The CSRD will replace the existing Non-Financial Reporting Directive (NFRD) and increase the number of companies required to report from 11,7000 to 49,000. Qualifying large businesses must disclose a CSRD report according to sustainability reporting standards for their 2024 financial year. All EU Member States must comply with the CSRD by July 6, 2024.
December 30 — The EU Deforestation Regulation (EUDR)
European Parliament adopted the EU Deforestation Regulation (EUDR) on June 29, 2023. This regulation aims to ensure that products made through deforestation are not sold to EU citizens. It targets seven specific commodities: soy, beef, palm oil, wood, coffee, and rubber. Several products made from these commodities are also targeted, including leather, chocolate, tires, and furniture.
The EUDR will take effect on December 30, 2024, for large companies, such as operators and traders. Smaller exporters will have until June 30, 2025.
Upcoming PFAS Regulations
PFAS (per and poly-fluoroalkyl substances) are becoming a major problem in supply chains. These chemicals are widely used in numerous products—such as makeup, fabrics, food packaging, cookware, and carpets—but are being phased out due to health and environmental concerns. Learn more: How are the new PFAS restrictions affecting your supply chain? Numerous regulations, lawsuits, and bans are currently underway for PFAS globally. Here is a look at some key upcoming dates for PFAS regulations:
- Toxic Substances Control Act (TSCA) – This PFAS regulation requires one-time reporting for companies that have manufactured or imported PFAS-containing chemicals, mixtures, or articles since 2011. The EPA Central Data Exchange (CDX) portal will open on November 12, 2024. Companies must submit the required data by May 8, 2025.
- State-Level PFAS Regulations – Many US states have implemented their own PFAS regulations. In Maine, manufacturers must report on their use of PFAS in products beginning January 1, 2025. The law also prohibits the sale of carpets, rugs, and fabric treatments containing PFAS, which went into effect on January 1, 2023. California regulations prohibiting food packaging containing PFAS will go into effect January 1, 2025. Learn more in this Resilinc Special Report: Adapting to PFAS Restrictions: Regulatory Changes and Supply Chain Compliance.
Ongoing Supply Chain ESG Compliance in 2024 and Beyond
Supply chain managers must embrace thorough supply chain ESG compliance to ensure transparency and accountability throughout operations. Understanding the origins of parts, products, and materials is not merely a supply chain ESG compliance issue but a demonstration of commitment to responsible business practices, fostering trust among stakeholders and contributing to a more sustainable and equitable future.
Want to learn more about how Resilinc helps companies with ESG risk management?
