Yven Heine is the Managing Director of StoneTurn. A risk professional with over 20 years of experience, he has worked as US CPA in all three lines of defense. He joins Tom Fox on this episode of the ESG Report to discuss a new German law on supply chain that has significant implications for ESG.
Germany’s New Supply Chain Law
Any company with over 3000 employees that is based in or has a branch in Germany is subject to the new Supply Chain Act, Yven tells Tom. The law defines supply chain as all steps required to manufacture products and provide services. As of January 1, 2023, companies and their suppliers will be legally obligated by law to observe human rights and environmental due diligence along the supply chain or be fined up to 2% of their annual revenue. This is why companies need to prepare for this law from now, he says.
ESG in the EU
Tom asks Yven what he thinks about the state of ESG in the EU. Yven responds that companies are slowly starting to establish ESG reporting and define risks for inclusion in their risk assessment process. It’s important to establish an ESG risk management system from now to safeguard your company and to ensure that you’re protecting human rights and the environment in your business operations, he emphasizes. This system should include your direct and indirect suppliers. He sees the new Supply Chain Act as a significant step towards human rights protection which has global impact. It effectively mandates that companies must ensure human rights and environmental protection wherever they do business, even in China or Bangladesh. He and Tom discuss ESG reporting by corporations in the EU. The financial services sector must now take ESG factors into account when making investment decisions.
Into The Future
Tom asks, “Do you see ESG evolving or changing in the EU?” Yven responds it is evolving and because of this new law, companies have to act sooner rather than later.
Yven Heine on LinkedIn