CURENTIS white paper on the Supply Chain Act and its impact in banks
On 1 January 2023, the "Act on Corporate Due Diligence in Supply Chains" (Supply Chain Act) will come into force in Germany. It defines standards regarding the environment and human rights.
Companies are thus obliged to monitor that the rights and standards of the German constitutional state also apply to their foreign suppliers. The discussion about this law usually focuses on industrial companies with global supply chains and correspondingly complicated logistics.
In fact, however, the Supply Chain Act also has extensive implications for credit institutions. CURENTIS has developed a white paper on this topic. If you are interested in this current CURENTIS publication, you can find access here
The white paper describes how credit institutions are affected by the law. In addition to the effects on their own procurement processes - e.g. when purchasing IT experts from Belarus or other countries with difficult human rights situations - the Supply Chain Act also affects lending. On the one hand, banks must pay attention to what is financed with lent money. On the other hand, as lenders they are part of the supply chain themselves.
The new law also changes the risk assessment in the investment policy.